Chapter 1

Introduction of Rural Marketing

 Introduction of Marketing

 Introduction of Rural Markets

 Introduction of Rural Marketing

 Introduction of Rural India

 Problem in the booming Rural Marketing

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 Chapter 1

Introduction of Rural Marketing

Marketing is the business activity that explores unfulfilled needs and
wants, defines and measures their magnitude, determines which
target market can be best and optimally served, decides on the basis
of appropriate products, pricing, promotion and distribution
programs to serve these markets with the aim of exploring new
opportunities and developing a market orientation. Marketing plays a
very important role by satisfying these needs and wants through
exchange processes and by serving the best quality goods with the
assurance of serving the customer in the best possible manner and
ends at building long term relationships. The process should be well
communicated by developing the value of a product or service
through positioning to customers.

Introduction to Marketing:

According to American Marketing Association (AMA) Board of

Directors, Marketing is the activity, set of institutions, and processes
for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large.

Philip Kotlar defines marketing as “the science and art of exploring,

creating, and delivering value to satisfy the needs of a target market
at a profit. Marketing identifies unfulfilled needs and desires. It
defines, measures and quantifies the size of the identified market and
the profit potential. It pinpoints which segments the company is
capable of serving best and it designs and promotes the appropriate
products and services.”

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Marketing is not only much broader than selling; it is not a
specialized activity at all. It encompasses the entire business. It is
the whole business seen from the point of view of the final result, that
is, from the customer’s point of view. Concern and responsibility for
marketing must therefore permeate all areas of the enterprise.” –
Peter Drucker

“Marketing is the process whereby society, to supply its consumption

needs, evolves distributive systems composed of participants, who,
interacting under constraints – technical (economic) and ethical
(social) – create the transactions or flows which resolve market
separations and result in exchange and consumption.” – Bartles

“Marketing is any contact that your business has with anyone who
isn’t a part of your business. Marketing is also the truth made
fascinating. Marketing is the art of getting people to change their
minds. Marketing is an opportunity for you to earn profits with your
business, a chance to cooperate with other businesses in your
community or your industry and a process of building lasting
relationships.” — Jay Conrad Levinson

Marketing is “The management process responsible for identifying,

anticipating and satisfying customer requirements profitably.” —
The Chartered Institute of Marketing

“Marketing is the process of anticipating, managing, and satisfying

the demand for products, services, and ideas.” — Wharton School,
University of Pennsylvania

"Marketing is a relationship -- with a customer, partner, or your

ecosystem. As the heart and soul of every business, marketing is a
game changer for competitive advantage by helping companies make

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better decisions, create and drive better strategies, and have better
execution. In today's world, in which CEOs are focused on growth and
profit, marketing can be one of the winning ingredients that help to
propel a company forward. As Peter Drucker once said, 'Business has
only two basic functions: marketing and innovation.' Marketing and
innovation produce results; the rest are support." --Sandy Carter

‘Marketing is a social and managerial process by which people and

groups obtain what they need and want through creating, offering
and exchanging products and value with others’ Kotler, Bowen and
Makens (2003)

Marketing can be explained as an organizational function and a set of

processes for creating, delivering and communicating value to
customers, and managing customer relationships in ways that benefit
the organization and its shareholders. Marketing is the science of
choosing target markets through market analysis and market
segmentation, as well as understanding consumer buying behavior
and providing superior customer value. (3)

Marketing Mix

The marketing mix consists of all the controllable variables the

company puts together to satisfy its target market. A well planned
and formulated market mix includes decisions regarding the product,
the price of the product, to formulate the strategy to promote and
position the product with the aim to target the right customer at the
right time and place.

All these variables are controllable elements in the marketing mix

and can be reduced to four basic ones, known as the Four Ps of
marketing:

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  Product
 Place
 Price
 Promotion

The four Ps are those factors which can be directly controlled and
affected by making changes in strategy, for example, you develop
your product, you decide how to get it to the customer, you
determine the price and you choose the promotion mix. The four Ps
are, as studied, with the selection of the target market are the basic
ingredients of the marketing strategy.

All four Ps are needed in the marketing mix and should therefore be
tied together. When a marketing mix is developed, all final decisions
about the Ps should be made. All four Ps should be in harmony and
aimed at satisfying the customer’s needs in an optimum way.
Marketer has control over the marketing mix and can vary it to suit
the needs of their customers and resources of the business.
Customers are continuously matching their needs with the products
offered by marketer and its competitors.

We should know the target market and the needs of the potential
customers. From analyzing the competitors, we can identify what
they offer the target customer through their marketing mixes. This
determines what their marketing mix and the competitive advantage
will be. All of the marketing mix element must reinforce the image of
the product or the service that the business portrays to the potential
customers.

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Discussion about four Ps in detail:

FOCUS ON THE PRODUCT: This area is concerned with developing

the right product for the target market. The whole concept of product
offering may involve a physical good, a service, or a blend of both. It
has to be remembered that a product is not limited to a physical
commodity. The important thing is that the product and/or service
should satisfy a specific customer need.

Branding means the use of a name, term, symbol, design, or a

combination of all, to identify a product. It includes the use of brand
names, trademarks and practically all other means of product
identification. A brand name is a word, letter, or a group of words or
letters. Trade mark is a legal term and includes only those words,
symbols, or marks that are legally registered for use by a single
company. (4)

Brand Promotion has advantages for sellers as well as for customers.

A good brand name speeds up shopping for the customer, if the
customer can recognize the product immediately and it will reduce
the seller’s selling time and effort. When customers repeatedly buy
the same brand, the seller is protected against competition from
other companies. Good brands can improve the company’s image,
and speed up acceptance of new products marked under the same
company name.

Packaging involves promoting and packaging the product. This can

be important for both sellers and customers. It can make a product
more suitable and appropriate to use or store. It can be very handful
to prevent the product from spoiling or damage. Good packaging
makes product easier to identify and promotes the brand at the point
of sale and even in use.
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In addition to branding and packaging if the formal product is a
physical object, the market may recognize it as having characteristics
like a quality feel, specific feature, as well as styling. If it is a service, it
may have some or all of these facets in an analogous manner. There
would be few more elements available in the specification of the total
product like free delivery, installation, warranties, services,
maintenance systems, customers advice, financing and other things
that customers perceived to be of value.

Product: The most basic marketing mix tool is product, which stands
for the firm’s tangible offer to the market including the product
quality, design, variety features, branding, packaging, services,
warranties etc. It refers to anything that is capable of or can be
offered to satisfy need or want. Product for rural market must be
built or modified to suit the lifestyle and needs of the rural
consumers, at the same time keeping in mind their paying capacity as
well as their willing to pay. Some particular product strategies for the
rural market are new and modified products altered for the rural
requirements. (1) (2)

Place : Place is concerned with all the decisions involved in getting

the right product to the target market’s environment. A product isn’t
of much use to a customer if it’s not available when it is required, or
needed at the right place. A product reaches its target market or set
of consumers through a channel of distribution with the web of
intermediaries including super-stockists, stockists, wholesalers and
retailers which completes the cycle which starts from producer and
ends on final user/consumer. Sometimes a channel system is quite
short. It may run directly run from a producer to a final user i.e
consumer. This is usually seen in business markets and experienced

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at the time of marketing of services. Often a channel system is more
complex and has levels, which involves different intermediaries and
chain of specialists. A zero-level channel consists of a producer
selling directly to a consumer an often called a direct marketing
channel. The choice of the level channel to use will be based on the
competitive advantage, offered by this level. A two- level channel, in
general, contains two middlemen. In consumer markets, they are
typically a wholesaler and a retailer. In industrial markets, we call
them as sales agents and wholesalers and in the service market, only
sales agents would be appropriately required.

Distribution channels could also be other then the above mentioned.

For example, the Internet is an excellent distribution channel for
selling information and viral marketing has recently become a very
important tool of spreading the information among masses. A
comedian can also distribute his services via the TV to his or her
target audience. Part of the place decision is also the layout of a store
or a shop. Layout is the arrangement and display of product and is a
very important part of promotional activities. A retailer success
depends on a well- designed and attractive display on the wall and on
the counter of the shop. The ultimate motive to pull customers into
the shop become very easy, helps in locating the merchandise price,
quality and features and ultimately buy.

Price

In setting up the price of the product, one must consider competition

in the target market, and the cost of the total marketing mix. One
must also estimate customer reaction to possible prices.
Furthermore, one also should know current competitors practices
such as markups, discounts and other terms of sale. One must be
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aware of legal restrictions on pricing. If customers wouldn’t accept
the price, all the planning efforts will be wasted. Consider what the
customers is willing to pay and what the customer is likely to expect
for that price. Marketer must set the price high enough to cover costs
and earn a reasonable profit, but low enough to attract the customers
and generate adequate sales volume. The right price today may be
completely inappropriate and may vary tomorrow. The reason for
this: Unstable market conditions. For many small business people
non-price competition- focusing on factors other than price- is a
more effective strategy than trying to beat larger competitors in a
price war. Non- price competition factors are: free trial offers, free
deliveries, lengthy warranties, money-back guarantees, allowing for
bargaining, highlighting durability or special features. The pricing
policy of a business also offers important information about its
overall image. High prices for some products frequently convey the
idea of quality, prestige, and uniqueness of the product to the
customers.

Competitors’ price can have a dramatic impact on the sale. It is very

much essential to study the activities, strategies and overall
marketing of the competitor which helps in monitoring competitors’
prices, especially on identical items of similar nature. The following
two factors are vital to study the effects of competition on the pricing
policies: location of competitors, and the nature of the competitive
products. Without the advantage of a unique business image- quality
of goods sold, number of services provided, convenient location,
favourable credit terms- marketers have to match local competitors’
prices or lose sales. He also has to recognize which products are
substitutes for those he sell and then strive to keep its prices in line
with them.
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Promotion: Promotion implies all the activities undertaken to make
the product or service popular and preferred amongst the user and
trade. Promotion aspect always possesses a challenge in rural
markets because of the fact that village have thin population density
and are widely spread over large remote areas and poor media
penetration. With fewer people having traditional media access and
even fewer getting influenced by it non traditional media vehicle like
hoardings and wall painting, van campaigns, events and musicals are
very influential for the rural masses. Poor penetration of media has to
be overcome by extensive use of local media, events, presence in high
congregation areas like haats and weekly bazaars, fairs etc. When
building a brand in rural India, word-of-mouth plays the role of a
huge motivator. Focused and well planned brand-building initiatives
like participation at community events such as melas, haats, street
theatre, van campaigns, and puppet shows generate awareness
among the rural masses and educates them through positive word-
of-mouth and hence ,it influence buying decisions. (1)

Effective techniques can be used when pricing a New Product

In the initial setting of a product’s price, one must try to achieve three
objectives:

 Getting the product accepted.

 Maintaining the growth and market share as competition
grows.
 Earning a profit.

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Two commonly adopted pricing strategies:

Penetration: The idea is to gain quick acceptance and extensive

distribution in the market. The marketer introduces the product at
low prices. The low profit margins may discourage other potential
competitors from entering the market with similar products.

Skimming: The idea is to set the price well above the total unit cost
and to promote the product heavily in order to appeal to the segment
of the market that isn’t sensitive to price. This technique often
generates the unique identity and prestigious image of a shop and
projects a quality picture of the product. High prices until
technological advancements enable the marketer to lower the costs.
The art is to reduce the product’s price sooner than its competitors.

Rural Markets:

According to Census of India (2001), ‘Rural’ is defined as any

habitation with a population density of less than four hundred per
sq.km., where at least seventy five percent male working population
is engaged in agriculture and there is no Municipality or Board.

Pradeep Kashyap and Siddharth Raut (2006) in the ir work

mentioned that many companies would consider any town as
‘Rural’ with a population below fifty thousand.

Prahalad (2006) philosophy is based on increasing the

purchasing power in the ‘rural’ areas. In his perennial work of
“The Fortune at the bottom of the Pyramid”, he says,” The poor
must become active, informed, and involved consumers. Poverty
reduction can result from co-creating a market around the
needs of the poor.

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The OECD (1996) classifies “predominantly” rural areas as
those where more than 50 percent of the population lives in
rural communities, and “significantly” rural areas as those where
between 15 and 50 percent live in rural communities. (4)

Marketing of any product is becoming more and more scientific in

these days of open competition and constrained resources. It
demands much more than merely the art of selling and buying. Most
of the sellers are resorting to a scientific approach to marketing
research and information on consumer behavior their needs,
purchasing power and many related aspects which affects buyer
decisions. India being largely on agriculture and rural based
economy, the need for assessing the potential for rural marketing is
imperative.

The rising income levels, especially agricultural income, further

aided by increasing literacy levels, modern communication
infrastructure systems, growing rural electrification, the various
rural development schemes and the priority and importance given
to rural development in the five year plans, all point towards a
significant growth in the rural market potential.

We can safely say that until some years ago, the rural market was
being ignored and given a step motherly treatment by many
corporate and advertising to rural consumers was usually a hit and
miss affair. More often than not the agenda being to take a short cut
route by pushing urban communication to the rural market by
merely copying the urban trend and transliterating the ad-copy.
Hence advertising that is designed specifically for rural masses
should be targeting the rural taste which could touch the hearts and
minds of the rural consumer. While this is definitely changing, the
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process is slow. The greatest challenge for advertisers and
marketers continues to be in finding the right mix that will have a
rural appeal across pan India. A few agencies that are trying to
create awareness about the rural market and its importance are
Anugrah, Madison, Sampark Marketing and advertising solutions
Pvt. Ltd., MART, Rural relations, O&M outreach, Linterland and
RC&M to name a few. Also the first four agencies mentioned above
have come together to form the Rural network. The main objective
of the network is to add more number of clients who are looking for
a national strategy in rural marketing and help them in covering the
vast boundaries of rural areas across different regions. Interestingly,
the rural market is growing at a far greater speed, than its urban
counterpart. “All the data provided by various agencies like NCAER,
Francis Kanoi etc. shows that rural markets are growing faster than
urban markets in certain product categories at least. The share of
FMCG products in rural markets is 53 percent, durables boasts of 59
percent share. Therefore one can claim that rural markets are
growing faster than urban markets” says Sampark Marketing and
Advertising solutions Pvt. Ltd. managing director RA Patankar. (4)

Indian Rural Market: Brief Overview

There’s no second thought about the fact that the Indian rural market
has become a focal point for most the corporate houses and
multinationals in India and simultaneously it is becoming the
economic powerhouse of the country. The hinterlands which were
ignored for many decades are now accounting for about 50 per cent
of India’s gross domestic product (GDP) and covering nearly 70 per
cent of the country’s population, are showing remarkable multiplier
effect and thereby excite policy makers and business leaders.

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Moreover, rural areas of India, where 12 per cent of the world
population is residing, are witnessing enormous growth in their
disposable income and crucial shift in consumer behavior and
ultimately broadening the rural mindset which has been considered
as price sensitive. Companies have realized this enormous
opportunity and are largely tuning their strategies to target the
untapped area with the aim to woo the rural masses through their
products and services.

Certain facts that strengthen the position of rural India as an

economic segment are enlisted hereafter-

 Rural India accounts for around 55 per cent of the

manufacturing GDP; rural areas were host to nearly 75 per cent
of new factories built in the last decade, and rural factories
account for 70 per cent of all new manufacturing jobs.

 Rural consumption per person has increased by 19 per cent

yearly between 2009 and 2012; two percentage points higher
than its urban peers. In incremental terms, spending in rural
India during this period, increased by US$ 69 billion,
significantly higher than US$ 55 billion by urban populations.
(1)

Features of Indian Rural Markets:

a) Large and Scattered market: The rural market of India is

huge in area and scattered in the sense that it consists of over
70 crore consumers from 6,27,000 villages spread throughout
the country. According to a study by Chennai based Francis
Kanoi Marketing Planning Services Pvt. Ltd., the rural market
for FMCG is worth Rs. 65000 crore, for durables Rs 5000 crore,

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 for tractors and agri inputs Rs. 45,000 crore and two and four
wheelers, Rs 8000 crore. In total, a whopping Rs 1,23,000
crore. The rural Indian population is large and its growth rate
is also high. Over 70% India’s one billion plus population lives
in around 6,27,000 villages in rural areas. This simply shows
the great potential for business houses to tap the virgin market
with ample opportunities. Rural India has to bring the much
needed volumes and help the FMCG companies to achieve
higher sales volume and help the FMCG companies to bank
upon the volume driven growth.
1.1) Percentage distribution of households and income
Area Households Population

Rural 72.6 74.6

Urban 27.4 25.4

All India 100 100

b) Major income from agriculture: Nearly 60% of the rural income

is generated from agriculture. In addition to the fact that income
levels are low, rural incomes also vary greatly depending on the
monsoons. When a monsoon hits, this directly affects the livelihood
of most rural consumers because they are dependent on agricultural
Income. Hence rural prosperity and growth in income is tied with
agricultural prosperity and development. EID Parry is a very example
of Indian firm that manufactures and markets fertilizer, among other
activities, and has been providing Kiosks to their sugar farmer
customers in Nellikuppam, in rural Tamil Nadu. These facilities help
EID Parry reach out to local growers, offering them technical
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assistance and information (currently in the form of an online
portal), developing new sales opportunities, and providing logistical
support and credit services.

c) Traditional Outlook: The rural consumer values and follows old

customs and tradition. They do not prefer changes and they are
bound to follow the traditional values set by the society and religious
bodies. In addition Indian consumers find themselves closely
connected to local producers and tend to feel more loyalty and trust
toward locally made products. The aforementioned Thumps Up and
Coca-Cola scenario also illustrates this fact. Though Thumbs Up is
considered as cola of lower quality than Coke, it is a locally made
Indian brand that rural consumers can relate with. Consequently,
Coca-Cola is the third behind Pepsi and Thumbs Up in the Indian soft
drinks market.

d) Diverse socio-economic backwardness: Rural consumers have

diverse socio-economic backwardness due to their traditional
approach. This differs with different regions and customs of the
country. Access of land is a major determinant of the livelihood
strategies and status of rural households in the society. The highly
uneven distribution of land is a major reason for rural poverty in
many countries of Asia and Latin America, while, according to a
paper published by the International Monetary Fund, in sub-Saharan
Africa , ‘the poor quality of land and the erosion of customary land
rights have become the major obstacles to agricultural growth and
alleviation of poverty’. In India , about 70% of rural households own
less than ha of land, 11% are left landless , and 24% do not operate
any land at all and they doesn’t produce anything on the available
land, sometimes even when they own it. The notion that all rural

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households are agricultural or that agriculture is the best way of
reducing income poverty for them all should be discarded as untrue
and unrealistic. The need to diversify rural employment and income
is increasingly important and government should focus on generating
other source of employment in all developing regions in the world.

e) Infrastructure facilities: The Infrastructure facilities like roads,

warehouses, communication system and financial facilities are
inadequate and improper in rural areas. Rural Infrastructure directly
and indirectly affects the livelihood strategies of rural households
and business activities of companies selling their products and
services in rural areas. In India, it has been shown that public
investment in roads has contributed majorly in alleviating poverty in
some of the less favoured agro-eco-regions. Hence physical
distribution becomes costly and difficult due to inadequate
Infrastructure facilities in rural regions.

The rural bazaar is booming beyond everyone's expectation. An

estimated investment of Rs 140 billion in the rural sector through the
government's rural development schemes in the Seventh Plan (1985-
89) and about Rs 300 billion in the Eighth Plan (1992-97) is also
believed to have significantly contributed to the rapid growth in
demand. The ninth five year plan (1997-2002) focused on increasing
agricultural and rural income and to improve the conditions of the
marginal farmer and landless labourers. The plan helped to achieve
average annual growth rate of 6.7%. (5)

Facts related with rural Indian economy:

 70% of India’s total population lives in 6,27,000 villages in

rural areas. As per the NCAER study, there are almost double as

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 number of ‘lower middle income’ households in rural areas as
compared to the urban areas.
 In context of high income-level group there are 2.3 million
urban households as compared to 1.6 million households in
rural areas.
 In urban India, the same is expected to rise from 46 million to
59 million. Thus, the absolute size of rural India is expected to
be double that of urban India. (7)

Rural India - Government initiatives:

The Indian Government acts as a catalyst in the growth story of rural

markets. It initiates and implements various schemes, policies and
eases regulations for companies and encourages them to look upto at
venturing into rural markets.

There is a huge demand for skilled labour among Indian industries,

and to fulfil the same, the Indian Government is targeting to train 500
million people by 2022 and is encouraging participation of
entrepreneurs and private organisations in the space. While the
Government is initiating several steps towards enhancing rural
education and taking serious steps to achieve the set target, the rural
India is also welcoming online learning in a big way. Several
corporate, Government, educational organizations and even Non-
Government organizations (NGO’s) are initiating numerous efforts to
educate, train, and generate skilled workers in rural and semi-urban
areas. Job oriented vocational courses are taught in the classes being
conducted by these government and non-government bodies and are
also being offered online that empowers a student with a particular
skill-set and a viable-degree in the specific area.
Similar initiative has been taken by the Shiv Nadar Foundation which
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has invested about Rs 500 crore (US$ 81.58 million) for establishing
world class schools called Vidya Gyan for poor rural children. Shiva
Nadar's philanthropic initiative, the founder of HCL Technologies,
has signed a Memorandum of Understanding (MoU) with the Uttar
Pradesh Government. The MoU would enable Vidya Gyan schools to
conduct entrance tests across all Government schools in rural Uttar
Pradesh to find talent, who would then be provided free education
from class 6 to 12 at par with the best private school in the country.
Vidya Gyan aims to transform the lives of meritorious but poor
students from rural parts of the state. This initiative has encouraged
many other corporate houses to serve for the upliftment of the
society.

Government initiatives to enhance rural income of rural India:

The Mahatma Gandhi National Rural Employment Guarantee

Act (MGNREGA) is an Indian law that aims to guarantee the 'right to
work' and ensure livelihood security in rural areas by providing at
least 100 days of guaranteed wage employment in a financial year to
every household whose adult members volunteer to do unskilled
manual work.

In accordance with the Article 23 of the Universal Declaration of

Human Rights that defines the right to work as a basic human right,
this law guarantees the right to work to the people of India and hence
is termed as a "People’s Act". Further conforming to the Article 21 of
the Constitution of India that guarantees the right to life with dignity
to every citizen of India, this act imparts dignity to the rural people
through an assurance of livelihood security. People of rural areas are
entitled to employment under the act, failing which the government
is liable to pay an unemployment allowance within the stipulated
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time of 15 days. For poverty alleviation and rural development, the
mission of MGNREGA is to provide job on demand in order to ensure
livelihood security and at the same time create durable assets to
augment basic resources available to the poor. (8)

The main achievement of the MNREGA scheme in FY 2012-13 is:

Household provided employment

It indicates that Rajasthan is the fifth most benefited state where

MNREGA scheme has provided benefit to the household of rural
Rajasthan.

Rural India in 2013:

 70% of India’s 1.2 billion population and 240 million

households represents Rural India.
 Provides a healthy platform for the FMCG sector and makes it
more competitive ‐ Nielsen predicts it could touch US$100
billion by 2025.
 The demand for consumer goods in rural has been increases
due to measures like higher Minimum Support Prices and
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 subsidiaries for agricultural produce, loan waivers, subsidised
rates on electricity and employment guarantee schemes like
MNREGAs.
 Rural consumption growth is surpassing the urban
consumption with following facts and figures:
 During the period 2009-2012, the percentage increase in
monthly per capita expenditure was much higher in rural
India.
 Incremental consumption expenditure in rural India is
far exceeding the figures of urban India.(9)

Rural Marketing

Today, rural India is attracting every corporate house in India and

around the world and has been considered as the most lucrative
market because companies across different sectors are wooing them
to support their momentum of business growth. Rural markets are
full of opportunities, which are in abundance and relatively
untapped.

According to Velayudhan (2002), rural marketing includes all those

activities of assessing, stimulating and converting the rural
purchasing power into an effective demand for specific products and
with the aim of raising the standard of living. It is a two way
marketing process of flow of goods and services from rural to urban
areas and vice-versa (George & Mueller,1955). Rural marketing is
any marketing activity in which one dominant participant is from
rural area (Kotler, et al., 2009). (10)

Rural Marketing can be defined as a marketing activity in which

products are sold in rural areas and the one dominant participant

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from buyer or seller is from a rural area. This implies that rural
marketing is all about marketing of inputs (products or services) to
the rural masses as well as marketing of outputs from the rural
markets to other geographical areas.

Marketing is the process used to determine the interest as well as

need of the customers and the strategy to implement in sales,
communications and business development. It helps in generating
the strategy that formulates sales techniques, affects business
communication, and ensures business development. It is an
integrated process which builds strong customer-producer
relationship and creates value for the customers as well as for the
producers. It is a function which manages all the activities involved in
evaluating, impacting and converting the purchasing power or
willingness to buy into effective demand for a particular product and
service. This makes them to target the rural areas to create
satisfaction and uplift the standard of living.

Rural areas of the country or upcountry are areas that are not
urbanized, though when large areas are referred as country towns
and smaller cities will be included. They have very less density of
population, and typically larger area of the land is devoted to
agriculture.

Marketing strategies that worked for urban markets do not

necessarily work for the rural ones. There are 7 differentiators
identified in Why the rural market is different, JWT, 2009

1. Intra community influences are relatively more important than

inter-community ones. Word-of-mouth in close knit communities is
more powerful.

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2. Scarcity of media bandwidth. Rural individual's access to media
channels is limited and in the case of broadband the comparable
upload and download speed may be slower. Online shopping is seen
as a solution by many but will be dependent on broadband speed.

3. Slow to adopt brands. Slow to give them up. Rural consumers will
be slower to pick up trends or brands but will remain loyal when
accepted.

4. Expenses are year long; income is seasonal. Many rural areas rely
on seasonal tourism peaks when income will be high and to a lesser
extent agricultural incomes from seasonal crops. This means there
will be more disposable income at certain times with rural
businesses and employees.

5. Information hungry; but entertainment starved. Isolation from

entertainment centres has led to companies trying edutainment to
get their message across.

6. Higher receptivity to experience advertising. Retail outlets in rural

areas have many demonstration areas along with markets for tasting.

7. Commercially profitable; and socially acceptable. Brands with

demonstrable local, rural, environmental and/or social credibility
stand a better chance. (11)

Rural Marketing meant different in 3 different periods.

Part1 (before 1960): It was a completely an unorganized market,

where “baniyas and mahajans” dominated the market. Rural
marketing was another word for agricultural marketing because
agricultural produces like food grains and industrial like food grains
and industrial like cotton, oil seeds, sugarcane etc occupied primary

23
attention and the supply chain activities of firm supplying
agricultural inputs and of artisans in the rural areas received
secondary attention.

Part2 (1960 to 1990):The greatest thing which happened in this

period was green revolution which led to farming involving scientific
and technological methods and many poor villages became
prosperous business centers. With advanced equipments for the
irrigation, facilities of soil testing, use of high yield and imported
variety seeds, fertilizers, pesticides and deployment of
technologically advanced machineries like power tillers, harvesters,
threshers etc, and the output increased especially wheat and paddies.
Due to this marketing of agricultural inputs was also now there a new
potential market. Now rural marketing meant “marketing of
agricultural inputs” and “marketing of agricultural outputs in urban
areas”. Agencies for example Khadi and Village Industries
Commission, Girijan Cooperatie Societies APCO Fabrics, IFFCO,
KRIBHCO Company bloomed and government paid special attention
to promote these products. Sale of handicrafts, handloom textiles,
soaps , safety matches and crackers increased on large scale in urban
areas.

Part3 (after mid 1990): Since 1990, Industrial sector in India had
gained the momentum and experienced rapid growth in the
international trade, freer economy, technological improvements due
to tremendous growth and advancement in information technology
showed the positive effects from 1994. The post reform years
showed quick and efficient recovery from the acute macroeconomic
crisis of 1991. There was metamorphosis of agricultural society to
industrial era. Central and state governments, Non-governmemt

24
organizations and socially responsible corporate houses like
Piramals, Tatas, Birla, Goenkas and others had initiated various
developmental programmes which helped the rural areas progressed
socially and economically.

The economic reforms further increased competition in the market,

the rural market became very lucrative for the companies
manufacturing household consumables and durables. Hindustan
Unilever (HUL) initiated successful rural marketing projects with the
aim to target the smaller areas and villages like “Project Shakti” and
“Operation Bharat” in India. Hindustan Unilever began the first
operation which was designed specifically for rural areas and
initiated with the aim to cover every home for selling personal
products in 1998 which was known as “Operation Bharat”. By 1999
“Bharat Operation” became very effective and had covered 13 million
rural households. During the course of operation, there were HUL
vans which visited villages across the country distributing sample
packs comprising a low unit price pack each of shampoo, talcum
powder, toothpaste and skin cream priced at 15rs.This was to create
awareness of the company’s product categories and of the
affordability of the product. Coca Cola also explored the market by
introducing bottles at rs.5, backed with Aamir Khan advertisement.
Amul is another case in point of aggressive rural marketing. In 2000,
ITC tried developing direct contact with farmers in remote villages in
Madhya Pradesh. ITC E-choupal was a result of this initiative.

The concept of Rural Marketing in Indian Economy has always played

an influential role in the lives of people. In India, besides few
metropolitan cities, all the districts and industrial townships are well
connected with rural markets. The concept of rural marketing in

25
India has been mistaken by many people who think rural marketing
is all about agricultural marketing i.e marketing of agricultural
inputs. However, rural marketing is related with the marketing of
various products manufactured by the non-agricultural workers from
rural to urban areas and carrying out business activities and bringing
the flow of goods from urban area to rural region of the country. In
short, Rural Marketing in Indian economy can be understood with
following facts:
 Selling of agricultural items in the urban areas.
 Selling of manufactured products in the rural regions.
(12)

“Rural Marketing is real Marketing”. The rural market has lured many
domestic as well as multinationals and is now booming beyond
everyone expectation. The rural market in India shares bigger
revenues in the country’s total income, as the rural regions comprise
of the maximum consumers in this country. The rural economy
shares more than 50% of the country’s total annual income. Rural
Marketing in context to Indian economy can be classified under two
broad categories as under:

 The market for consumer goods that comprise of both durable

and non-durable goods.
 The market for agricultural inputs that include fertilizers,
pesticides, seeds, and so on. (13)

Few important features or characteristics of Rural Marketing

are discussed in the following ways:

 Various rural development programmes have been initiated to

upsurge employment opportunities for the rural poor. Biggest
26
 reason behind the steady growth and very slow momentum of
rural market is that it is not touched and also yet to be
exploited and explored.
 The rural market in India is vast and scattered and
opportunities are available in plenty which are yet to be
explored. It covers the maximum population i.e 627 million and
regions i.e 6,27,000 villages and thereby, the maximum
number of consumers.
 The rural market in India is not a separate entity in itself and it
is highly influenced by the sociological and behavioural factors
operating in the country. The rural population in India covers
around 627 million masses, which is almost 74.3 percent of the
total population of India.
 The social status of the rural regions is totally uncertain as the
income level and literacy is extremely low along with the range
of traditional values and superstitious beliefs that have always
been a major block in the progression of this sector.
 Various steps have been initiated by the Government of India
to ensure proper irrigation facilities, infrastructural
developments, prevention of flood, grants for fertilizers, and
various schemes to cut down the poverty line have improved
the condition of the rural masses.

Problems in the Booming Rural Marketing

Although the rural market provides a big opportunity and it is

considered as a virgin market which offers vast untapped potential, it
is very much cleared that it is not that easy to do business in rural
market which possess several problems. Thus, rural marketing is
very time consuming and needs customized marketing. Rural

27
marketing requires considerable investments in terms of evolving
appropriate strategies with a view to tackle the problems.

The major problems faced are:

a) Less educated People and Under developed Markets:

The percentage of people who are affected due to poverty and
malnutrition have not decreased in numbers. Thus less
educated people and consequently underdeveloped market by
and large pictures the characteristics of rural markets.
b) Less Effective Media Network for Rural Communication:
During late 50’s and 60’s, radio was considered as the most
preferred medium of communication among various available
sources of mass media. Another communication medium is
television and cinemas. Statistics indicate that the proportion
of mobile theatres and number of villages are inappropriate.
The figures show hardly 2000 to 3500 mobile theatres in rural
areas, which is far less in comparison to the number of villages.
c) Many Languages and Dialects: In India, languages and
dialects vary widely from state to state, region to region and
even from district to district. The communication has to be
made in the local languages and dialects. The number of
recognized languages is restricted to the figure 16, the dialects
are estimated to be around 850.
d) Dispersed Market: Rural areas are dispersed and it is very
difficult to ensure the availability of a brand all over the
country with regular supply of the product. Seven Indian states
covers 76% of the total number of rural retail outlets in India,
the total number of which is placed at around 3.7 million.
Advertising cost remains very high when it is directed to target

28
 the highly heterogeneous rural market and it needs expertise
and knowledge to track the current trend in the market and
strategize accordingly.
e) Low Per Capita Income: The Per Capita Income and the
population in rural areas are not proportionate in numbers.
Even though about 33-35% of gross domestic product (GDP) is
generated in the rural areas it is shared by 74% of the
population and remaining 65-67% of GDP is shared by 26% of
the urban population. Hence the per capita incomes of urban
counterparts are much higher in comparison to rural masses.
f) Low Level of Literacy: The literacy rate is low in rural areas
as compared to urban areas. This again leads to various
problems of marketing in rural areas and problem related to
the communication for promotion purpose rises with this
factor. The effectiveness of print media is less in rural areas
and to an extent irrelevant since its reach is poor and so is the
level of literacy among the rural masses.

Key Investments/Developments:

 Indian rural markets possess great opportunity to the business

conglomerates and it has attracted even multinationals by the
immense growth potential Indian rural markets possess. They
have devised innovative ways to attract customers by offering
customised products which suits rural consumers.
 With rural consumers expecting and demanding for better
products and high-quality services, fast-moving consumer
goods (FMCG) companies started giving pace to their efforts in
rural India in 2012-13. FMCG giants like Hindustan Unilever
(HUL) and Dabur India Ltd strategize their policies specifically

29
 for rural markets and consider their steps to be extremely
important for the growth of their businesses.
 HUL has initiated the project “Shakti” a decade ago and making
it more technologically advanced, they have distributed basic
Smartphone to about 40,000 Shakti Ammas in 2012. These
smart phones had inbuilt software that gives them facility to
take and bill orders, control inventory and getting updates
related to promotional schemes and facilities offered by the
company. This initiative has enhanced their productivity as
well as efficiency. However, the initiative delivers the
maximum share around 20 per cent of Unilever’s overall rural
sales.
While HUL empowered rural women as Shakti Ammas, Dabur
India Ltd. made their campaigning through distribution of free
samples in rural areas and made efforts to educate the benefits
of the product to the rural masses. The idea behind
campaigning was to spread the message of the company and
made them aware about the company’s products through the
word-of-mouth advertising.
 Havells India Ltd. has been very positive about the growth
prospects in rural areas and has projected that housing sector
is set to see a boom in coming years, particularly in rural areas.
Higher demand for houses will directly affect the demand for
lighting and other domestic electrical goods, companies
manufactures the fast moving electrical goods and power
distribution equipments target to tap rural Indian market with
its newly launched 'Rio' switches.
 Those companies whose target area is the upcountry territory
have adopted a multipronged approach to reach the deeply
30
 penetrated rural markets. Marketers apply various strategies
to attract the rural consumers and they apply various
permutations and combinations while they produce
customized products specifically for rural masses. However,
two-wheeler manufacturer Hero Motors has appointed few
authorised representative dealers for facilitating easy purchase
and after sales services of the bikes to the local consumer and it
has supported and reduced the burden from its existing hub-
and-spoke network This step supported the existing network
in a big way and added more than 5, 000 channel points to
Hero's distribution channels, and enabled to extend its reach to
20 per cent of India's 6,27, 000 villages. (14)

Few other Examples:

 One very fine example can be quoted of Escorts where they

focused on deeper penetration. They did not rely on T.V or
press advertisements rather concentrated on focused approach
depending on geographical and market parameters like fares,
melas etc. Looking at the ‘kuchha’ roads of village they
positioned their bike as tough vehicle. The advertisement
picturized with the punch line ‘Jandar Sawari, Shandar Sawari
and it was characterized by Dharmendra riding Escort Bike’.
Thus, they achieved whopping sales of 95000 vehicles
annually.
 HUL started ‘Operation Bharat’ to tap the opportunity to cover
rural markets. Under this operation, low–priced sample
packets of its toothpaste, fairness cream, Clinic plus shampoo,
and Ponds cream were distributed among the twenty million

31
 households with the objective to support the pockets of the
rural consumers.
 ITC has played a very important part in the area of agriculture
by setting up e-Choupals to offer all the information to the
farmers about products and services to enhance farm
productivity , make them more technologically advanced and
updated, making them price sensitive. Farmers can directly
access latest local and global information on weather, scientific
farming practices as well as market prices at the village itself
through this web portal - all in Hindi. It enables the supply of
high quality farm inputs and ensures the purchase and sell of
commodities at their doorstep.
 BPCL introduced Rural Marketing Vehicle (RMV) to cover up
the rural areas as a part of their strategy for rural marketing. It
covers deeply penetrated rural areas and moves from village to
village and they provide the facility of filling cylinders on the
spot for the rural customers. BPCL realized the potential of
rural markets and they considered low-income of rural
households and therefore introduced a smaller size cylinder to
reduce both the initial burden in the form of high deposit cost
as well as the recurring refill cost.

32
What should be kept in mind to get success in rural market?

The 4 A approach

The rural market looks very attractive and full of opportunities but it
has several problems: Per capita disposable incomes is very low
which is almost half the urban disposable income; large number of
daily wage earners, over dependence on the monsoon; linking
seasonal consumption with harvests, festivals and special occasions;
poor condition of the roads; Regular problem of inadequate power
supply; and inaccessibility to conventional and traditional
advertising media.

They offer tremendous prospects for growth for companies to target

their products and services in the rural markets. Companies across
varied industry verticals are trying to grab the hidden opportunity
by addressing the rural potential demand. The buying behaviour,
aspirations, buying capacity and demands of rural consumers are
very different from their urban counterparts who have a better and
modern life style. Companies are resorting new strategies to cater to
this market effectively and efficiently. Companies apply number of
strategies like repositioning of brands, customization and
repackaging of products and re-pricing them, specifically targeting
rural wallets. The rural marketing mixed framework revolves
around delivering the right product to the right customer, providing
value for price paid, using effective means of promotion, choosing
the best mode of transportation and distribution channel,
establishing long term relationship with the customer and develop a
sense of belongingness among the rural masses in order to sell their
products.

33
However, the rural consumer is different in comparison to his urban
counterpart in many ways. The more daring corporations are
meeting the consequent challenges and hardships of Availability,
Affordability, Acceptability, and Awareness in respect of rural
marketing. (The so-called 4 A’s).

Affordability: The first challenge is to ensure the supply of products

and services at affordable rates. Rural consumers have low
disposable incomes, and they expect the products to be available at
affordable prices, most of them are on daily wages. Some companies
have put efforts to address the affordability problem by introducing
small unit packs or sachets. Godrej recently introduced three brands
of Cinthol, Fair Glow and Godrej No.1 in 50-gm packs, priced at Rs 4-
5 targeting the so called BIMARU' States includes Madhya Pradesh,
Bihar and Uttar Pradesh. Hindustan Lever, among the first MNCs to
realise the huge potential and untapped opportunities of India's
rural market, has got the huge success by launching a variant of its
largest selling soap brand, Lifebuoy in 50 gm pack at Rs 2. The move
is majorly centered at the rural market. Coca-Cola has solved the
affordability issue by introducing the returnable 200-ml glass bottle
priced at Rs. 5 The initiative paid dividends: Eighty per cent of the
business is coming up from the rural markets. Coca-Cola has also
launched Sunfill, a powdered soft-drink concentrate. The instant and
ready-to-mix Sunfill is available in a 25 gm sachet priced at Rs 2 and
200 gm sachet at Rs 15.

The rural markets are continuously posing different types of

challenges and threats, including understanding of the nature of
rural markets and strategize to ensure the safety of the consumers
and proper supply of the product to the consumers. The consumers

34
in rural areas have different psyche and they are value-conscious
and money savvy. They are ready to spend more for a product if it is
worth in terms of value for money. Affordability is thus critical to
success in rural markets. As ‘nano’ paradigm is becoming more
popular in the rural market; small stock keeping units (SKU), low
priced products are making the different categories of products a lot
more affordable to the rural consumers,. In fact, FMCG companies
have adopted the strategies i.e. lower prices (affordable pricing) and
small SKUs to penetrate rural markets. The smaller SKUs are
considered as one of the highly successful strategy which helps in
increasing the product penetration. Smaller packs are more
affordable and don’t affect the wallet of the rural consumer to great
extent, so they offer a change to rural masses to try out products
before moving to a larger pack. Most FMCG companies have adopted
the low-pricing strategy to boost consumption and reduced SKU of
soaps, shampoos, detergents, food items to increase affordability for
rural consumers.

For Dabur, demand in rural areas is growing at a fast pace and

initiative like small unit packs of Chyawanprash and Dabur Amla
Hair oil, and new entrants in the hair oil category such as Amla
Flower Magic hair-oil have pushed this growth momentum.

Chennai based consumer products company CavinKare, which

manufactures Nyle and Chik shampoos and Fairever Fairness Cream,
believed that government’s scheme like NREGA has filled pockets of
the rural consumer, which is quite motivating for the companies
eyeing the rural markets. CavinKare generates the highest revenue
by selling Rs 1 sachets of Nyle and Chik Shampoos and they have
become the Company’s strongest volume drivers.

35
Keeping in mind the rural wallet, the telecom giants, Bharti Airtel
had re-strategize its product policy and reduced its tickets sizes.
Instead of Rs.30 recharging coupon which has a validity for a month.
It launched a Rs.10 coupon which would be remained valid for 10
days for the rural markets. On the other hand, Idea Cellular, had
launched rural calling card specifically targeting the youths of the
rural areas, only 50 paisa per minute was charged for a local call.

Coca-Cola put efforts to address the problem of inadequate power

supply in rural areas, they provided low-cost ice-boxes to the
retailers as they don’t have to depend on a refrigerator. Eveready
Industries India Ltd. has developed product for rural markets in the
form of Homelite, newly LED technology based lighting solution,
which is cost effective, risk-free and long lasting.

AVAILABILITY: The second challenge is to ensure availability of the

product or service at the right time for the right customer at the
right place.

India's geographic area is scattered into 627,000 villages which are

spread in the area of 3.2 million sq km; 70% of the total Indian
population i.e 700 million lives in rural areas, covering them is not
easy at all. A marketer, who seriously makes efforts to reach at least
13,113 villages with a population of more than 5,000, keeps this
figure as the target. Over the years, largest MNC in India, Hindustan
Unilever, a subsidiary of Unilever, has developed a strong
distribution network, which ensures the availability of their
products in the interiors of the rural market.

Companies are taking various initiatives for making the products

available to consumers; companies adopt various methods to ensure
the availability of the products in the interiors of the rural areas.
36
Methods such as direct selling, appointing DSA’ and SHG, using
delivery vans, putting temporary stalls in rural melas or haats,
participation in the events etc.

In the rural areas with places far flung and poorly-connected with
proper roads, poses a challenge of distribution of the product to the
rural consumers. Hence, the overall cost of the distribution gets
increased which affects the price of the product and make it more
costly. Companies have accepted this challenge of making the whole
distribution cheaper and are trying to be creative to face this
situation. To cover remote village and interior of the rural areas,
stockiest use auto-rickshaws, cycle-rickshaws, tempos, bullock-carts
and even boats in the backwaters of Kerala. Coca-Cola, which
generates their maximum revenue from rural markets has
considered rural India as a major driver for future growth, has
developed a unique i.e hub and spoke distribution model to cover
the villages. LG Electronics has a different view to categorize the
rural market and they considered all cities and towns other than the
seven metropolitan cities as rural and semi-urban market. Various
studies on buying behaviour of rural consumers and psychology of
rural consumers indicates that the rural retailers play an important
role in the decision making of the rural consumers and they get
influenced 35% of occasions they purchase the products. Therefore
product availability can influence decision of brand selection, sales
volume and market share. Few FMCG giants like HUL initiated
project streamline to significantly increase the control on the rural
supply chain by developing a network of sub-stockiest in the area,
who are localites and based in the villages only. Other programme
which HUL started to make the rural distribution network even
more stronger was Project “SHAKTHI” in collaboration with Self
37
Help groups (SHGs) of rural women. Direct Sales to consumers have
been found to be successful for the corporates such as HUL, ITC,
Dabur, Godrej Consumer etc. Rural markets or mandis are being
targeted by the companies for direct sales. The company, BPCL
initiated a unique drive ‘Rural Marketing Vehicle’ for the rural
masses which moved from one village to another for filling cylinders
on spot.

On the other hand, soft drink companies are still sticking to the
traditional wholesale retail model. Product are firstly transported to
the major spots where products are stored and later, they are
transported to various parts by using traditional modes of
transportation like cycle, tempo, hand-cart, cycle-rickshaw, camel-
cart etc. while Airtel and Samsung have made the collaboration up
with IFFCO, Indian farmer’s cooperative of fertilizers, to develop a
customer base and ultimately to push the sales of their mobile and
services, other telecom companies and DTH providers are targeting
STD-PCOs as a channel of distribution for their product selling. Such
collaborations helped the companies in making positive impact on
the society and guided to earn few points on the social services front
and yet make significant efforts to increase their sales numbers. ITC
has developed a supply chain infrastructure called e-choupal system.

In the same way, Hindustan Unilever’s project ‘Shakti’ empowers

women’s self-help groups. The project ‘Shakti’ started with a social
objective of providing the employment opportunities to the rural
women and initiated for a noble cause of upliftment of rural women
by giving income-generating opportunities and was implemented to
strengthen the rural distribution network . HUL’s Shakti project
associates various Self Help Groups (SHGs) with business

38
opportunities ensuring health income generation. SHG’s channel was
promoted for developing a better network in rural areas for
increasing its sales. The SHGs plays very important role in
developing and promoting business and they work as company’s
local small-scale distributor in the rural areas. These groups
comprise around 15 to 20 people. They purchase small units of
items like soap, detergents, digestives, face creams or shampoos and
sell them directly to consumers in their homes and cover every door
of the village or taluka. This innovative distribution model has
become very successful for the company as well as the village SHGs.
In the recent past ,India’s telecom major, Bharti Airtel has
established hundred of rural centres, branded ‘Iserve’ to activate,
reactive and recharge mobile connections, sell and exchange SIM
cards, availability of data services and activation of value added
services like ring tones and hello tunes across the country. Telecom
Company, Idea Cellular covered the rural areas of Maharashtra. 50%
of the total new subscription comes from rural areas as growth in
the number of urban subscriber has been reduced. At the same time
company marketed rural calling card. As a new development in its
after-sales service, it introduced the concept of ‘Care Vans’, which go
from villages every month following a fixed route to cover a cluster
of villages in one complete trip.

The growth potential of rural India is also attracting various FMCG

companies. FMCG companies have given pace to their growth
prospects by initiating various rural schemes such as small size &
attractive packaging, low pricing strategy, putting up temporary
stalls in the events like Haats/fairs and deep distribution channels.
Godrej Consumer Products Limited (GCPL) witnessed sharp growth
in its rural segment and the sales figure grow at 40 percent in the
39
last few months, which was much higher in comparison to urban
areas. The company has initiated project ‘Dharti’ for covering rural
India and touched nearly figure of 17,000 villages. Emami Group has
also made efforts to enhance penetration in rural areas by
implementing new level of distribution. The Group has implemented
new channel of distribution of super-stockist networks for covering
rural areas. The company has started using vans for covering
interiors of rural areas which enable the products to every rural
consumer. Rural markets shares about 20 percent of the country’s
drug retail business. Several pharmaceutical companies are eyeing
towards Indian countryside for business expansion and in the search
of higher sales volume. Pharma MNCs operating in India are
formulating aggressive marketing strategies to influence customer
and to achieve the ultimate objective to tap the rural markets.
Aventis Pharma , the Indian arm of the French drug major Sanofi-
aventis has established a totally new division with 10 products and a
sales team of 300 people to cover rural market as it is targeting to
grab the bigger opportunity of the fast growing Indian rural market.
Another Pharma company, Novartis is achieving good success in
villages of 7 states by promoting priced products consistently in a
variety of package sizes. This model covered 16000 pharmacies and
the company’s stockists in district and towns supplied medicines to
village pharmacies. Similarly, Pharma giant, Roche Diagnostic
(India) has made a partnership with Delhi based Mankind pharma to
market and sell its new diabetes monitoring devices in the rural
market. The number of persons suffering from diabetes in rural
regions is high and Mankind’s rural network is very wide and deeply
spreaded, which helped Roche Diagnostic to cover interiors of rural
areas and hence, it significantly increased its sales in rural markets.

40
ACCEPTABILITY: The third challenge is to gain acceptability for the
product or service. Companies promote number of products but it is
very important that it should be well accepted by the society.
Otherwise, it becomes costly affair for the companies to run the
business successfully. Therefore, companies should offer those
products that suit the rural market or that satisfy the need of the
rural consumer. One company, which took the maximum advantage
by doing so, is LG Electronics. In 1998, it designed a customized TV
specifically for the rural market and marketed it with the name
Sampoorna. The problem of inadequate supply of electricity and
shortage of refrigerators are quite common in the rural areas, to
counter it Coca-Cola took a initiative to provide low-cost ice-boxes -
a tin box for new outlets and thermocol box for seasonal outlets.

It is needed to offer products and services that satisfy the need of the
rural consumers in order to obtain their acceptability. Few
researches proves that rural consumer gets highly satisfied when
they get value for their money, but it is mandatory to provide value
add-on services or facilities that attracts attention of the rural
people and help in gaining their acceptability for the products.
Therefore, imaginative ideas, innovative thinking, customized
products and dedicated efforts of different business houses are fast
transforming the rural hinterland into big consumer markets. Mobile
device companies are customizing their products according to the
needs of the rural consumers and day by day, companies are getting
more consumer friendly. For instance, Nokia had introduced its
basic handset with the facilities of a torch and an alarm clock. In
December 2008, the company introduced Nokia Life Tools, which
covers range of agriculture, education and entertainment services
delineated especially for consumers in rural areas and small
41
villages/towns of emerging markets. The product is designed with
the aim to provide relevant information on timely basis related to
user’s location and personal preference directly on their mobile
services.

Samsung introduce stabilizer-free operations in its direct-cool

refrigerators to take care of voltage fluctuations and silver-nano
features in semiautomatic washing machines to solve the problem in
the area where water quality is not good. Two Telecom majors-
Bharti Airtel and Idea Cellular are going customer friendly by
providing services message in the local languages of the region and
also providing daily alerts on commodity prices at the nearest
wholesale market or mandi and even English language tutorials. The
highly accepted value-add services is music, especially in the local
dialect of the subscriber. Tata Chemicals introduced water purifier
with the brand name as Swach, in the rural areas specifically
targeting the lower-income group and aims to resolve the biggest
problem plaguing India i.e irregular supply of clean drinking water
which kills thousands of people in rural India every year. Tata
chemicals introduced Swach as fast-moving-consumer-goods
(FMCG) studies reveal that 75 percent of the rural population does
not have access to pure drinking water leading to high incidence of
water borne diseases and Tata Group is going to solve this major
problem through Tata Swach, which is based on nano technology.
Companies like Nestle and GlaxoSmithKline consumer Healthcare
(GSK) too have launched products especially for rural markets.
Swiss Foods Company; Nestle also announced the launched of a low-
priced variant of Maggi noodles under its flagship Maggi Instant
Noodles, aimed to serve as a meal for the rural consumers. The new
Maggi variants was introduced mainly for the rural and semi-urban
42
markets comprising towns and villages in with the sole aim to
provide low-cost energized meal for bottom of the pyramid
consumers.

AWARENESS: Mass media has not been able to cover the whole
rural population ,it is still limited to 57% of the total rural
population. Companies utilize unconventional, non-traditional
media for creating awareness among the bottom of the pyramid
consumers in rural areas. For generating awareness about the
specific brand among the rural masses, events like fairs and
festivals, Haats, etc., are used for brand communication and brand
positioning. Cinema, Company vans, Display in the shop interior,
wall painting and Advertisements in the local published newspapers
are other modes of media that have been used to develop brand and
make it popular among masses. Innovative methods were used to
promote personal wash brands like Lux and Lifebuoy and fabric
wash items like Rin and Wheel in the market. The purpose was to
advertise not only at the point of purchase but also at the time of
consumption. With large parts of rural India inaccessible to
conventional advertising media - only 41 per cent rural households
have access to TV - building awareness is another challenge.
However, the rural consumer expressions differ from his urban
counterpart. Outing for the former is confined to local fairs and
festivals and TV viewing is confined to the state-owned channels.
Consumption of branded products is treated as a special treat or
indulgence.

Coca-Cola uses a combination of TV, cinema and radio to reach 53.6

per cent of rural households. Since price is a key issue in the rural
areas, Coca-Cola advertising stressed its `magical' price point of Rs 5

43
per bottle in all media. LG Electronics uses vans and road shows to
reach rural customers. The company uses local language advertising.
The key dilemma for MNCs eager to tap the large and fast-growing
rural market is whether they can do so without hurting the
company's profit margins. In case of nestle, company's product
portfolio is essentially designed for urban consumers which
cautions companies from plunging headlong into the rural market as
capturing rural consumers can be expensive.

The FMCG companies are also venturing into the rural markets with
their innovative strategies to create & Gamble, Colgate, Godrej and
Maricos are gearing up for bigger advertisement and sales
promotion campaigns targeted at rural markets to create brand
awareness. Automobile sector is also giving extra attention to rural
marketers as a considerable chunk of their product line such as
commercial vehicles; tractors, motorcycle etc. are catering
specifically to the demand. (15)

44
 References

(1) Deepti Srivastava “Marketing To Rural India: A Changing

Paradigm” APJRBM Volume 1, Issue 3 (December, 2010)

(2) Basic principles of marketing and management Author: Dr.

M.R.P. Singh Course Code: Paper-V

(3) www.wikipedia.org/wiki/Marketing

(4) Problems and Prospects for Marketing of Rural Products: An

Empirical Study of Tribal Region of Rajasthan (India) Dr. Kartik
Dave, Associate Professor (Marketing Area), BIMTECH, Greater
Noida, NCR, India & Prof. Karunesh Saxena, Professor and
Director, Faculty of Management Studies, Mohan Lal Sukhadia
University, Udaipur, India. 2010 Oxford Business & Economics
Conference Program.

(5) Kothari,C.R.,(2010),Research Methodology Methods And

Techniques,Delhi, New Age International(I) Ltd..,Publishers, Pg
1& 65

(6) Amita Kohli and Amrita Jadhav, (2012), Retailing the rising
sector in Rural India, Shri Baba Saheb Gawde and the Journal of
Maratha Mandir, Pg 131

(7) Dr. Singh, Pratap and Dr. Sharma, Anshul, Oct 7,2012 , “The
changing face of rural Marketing in Indian economy”,
Arth Prabhand: A Journal of Economics and Management
Vol.1 Issue 7

45
(8) http://en.wikipedia.org/wiki/Mahatma_Gandhi_National_Rura
l_Employment_Guarantee_Act

(9) http://www.dabur.com/en/Investors1/DIL-Inv-Presentation-
Edelweiss%20India-Conf-Feb-14.pdf

(10) Sulekha & Dr. Mor, Kiran , 2013, “An Investigation of Consumer
Buying Behavior for FMCG: An Empirical Study of Rural
Haryana”, Global Journal of Management and Business
Research Marketing Volume 13 Issue 3

(11) http://micheal-marketing.blogspot.in/2012/05

(12) http://shodhganga.inflibnet.ac.in/bitstream/10603/2485/11/
11chapter%203.pdf

(13) Suchi Patel, July7,2013, “The challenges and strategies of

Marketing in Rural India” Asia Pacific Journal of Marketing &
Management Review Vol.2

(14) http://www.4aims.com/indian_rural.php

(15) Shah Chintan and Desai Rency, Jan1 2013, “The ‘4 As’ of Rural
Marketing Mix” International Journal of Management and
Social Sciences Research (IJMSSR) Volume 2, No. 1

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