1.

Ans:

Summary

The rural markets are of diverse nature. There are people from diverse cultural, linguistic and
religious background. The incomes of rural customers are also increasing. Rising literacy has
generated a demand of life style products. The reach has increased and marketers are in a position
to promote their products much more easily. The marketers are meeting the consequent challenges
of availability, affordability, acceptability and awareness in rural market. Most of the companies
treat rural market as a dumping ground for the lower end products designed for an urban audience.
But, this scenario is slowly changing and importance is given to the need of the rural consumer. In
rural markets, brands are almost non-existent. They identify FMCG by three things: Color, Visuals of
animals and birds and Numbers. Hence it is very important for us to understand that a lot needs to
be done in terms of communications, media, marketing and branding. There are a number of cases
which suggest that to sell brands in the rural market, it is necessary to simultaneously educate the
consumers. If you have to create brand communication, marketing efforts must be supported by
education. A rural customer is price sensitive and shops for value. This is mainly because of his lower
income levels than his urban counterparts. Hence the marketer has to find ways of making the
product affordable to the rural consumer. Distribution of products is one of the biggest challenges of
rural marketing. There are CWC (Central Warehousing Corporation) and SWCS (State Warehousing
Corporations) set up in rural areas to store and distribute products. All these tiers provide
warehousing facilities only to their own members. Hence it is a big problem for a company to store
its goods in rural areas. Rural communication can be through Conventional media or through a non-
conventional media. The most common conventional media include: Print, Cinema, Television and
Print. The Non-conventional media include: Theatre, Posters, Haats and Melas.

SOLOTAXONOMY Approach
• Pre-structural
– Urban markets are already crowded & saturated.

• Uni-structural
– Agriculture’s share in overall GDP is going down, but, India still lives in her villages.

• Multi-structural
– Rural Marketing is a different ball game.

• Relational Level
– The understanding of “rural” is diffused and sometimes confusing. PESTEL factors affecting rural
market is entirely different compared to urban marketing.

• OOB Thinking
– FMCG & consumer durables companies need to come up with innovative ideas on products,
pricing, promotions & places (4 Ps) to penetrate into the rural markets & make a fortune. Need a
real rethink of marketing mix for rural markets. Organizations have to work with local govt bodies &
NGOs to create necessary awareness among the rural customers.
2.Will the strategy of FMCG companies to go rural work? Justify your answer in the context of
factors affecting the Business in Rural markets.

Ans: Yes, if they have a right rural specific product & marketing strategy. There are lots of favorable
conditions & factors existing, which can positively impact the business in rural areas.

– Large population base

– 72% of total population.

– Rising rural prosperity due to modern faming practices, contract farming & migration to urban
areas, govt funds etc.

– Growth in consumption. Average per capita household expenditure increased.

– Change in life style. Urbanization of rural areas, improved education & literacy rates. Social
mobility & constant interaction with urban population.

– Life cycle change. Products that have attain the maturity stage in urban market is still in growth
stage in rural market

– Inexpensive rural marketing.

3.What are the social changes that might be brought about by the proliferation of MNCs in the rural
markets?

Ans:

• Access to information like weather details, market prce (eChoupal)

• Access to capital (Micro finance)

• Entrepreneurial ability

• Tastes & preferences got changed due to technological advancements like TV, Telephones.

• Social mobility got changed due to transportation advancements & road connectivity.

• Focus beyond agricultural income - alternate revenue channels from horticulture, poultry, fisheries
and other activities which are less rain-dependant flourished.

• Farmers got exposure to new crops & farming technology. (micro sprinkler irrigation systems,
vegetable farming etc.).

• Awareness level & literacy got improved.

• Rural isolation got reduced.

• Basic amenities like education, drinking water, sanitary etc. got improved.

• Empower of women through self help groups.

4.