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We take this opportunity to express our sincerest gratitude to our Project Guide, Prof.Shrivani, who lived up to her Designation and was a constant source of guiding light for us at each and every stage of the execution of this project. Lastly we would like to thank our well-wishers and our colleagues who were a constant source of inspiration and in some cases also motivation as it ultimately has led to the completion of this project. Finally we would also like to give due credit to people, who knowingly or unknowingly have guided, supported and helped us in the completion of this project as without their support this project would have never seen daylight.
Rural Marketing I. Introduction to Rural Market
The emergence of an active cash economy is bound to create is bound to create a strong rural demand and promote rural consumption. The traditional growth and dominance of urban industrial centers is undergoing rapid changes. A more equitable distribution in rural areas would also help in slowing down the rapidly increasing influx of people from rural to urban areas. There are two sections of rural population: A large portion has a low income and low consumption levels; The rest are rural rich.
The rural population forms a major portion of the Indian population as seen below:
Division of Population in India
About 75% of the Indian people reside in rural areas. In other words, for every consumer in the urban area, there are three of them in the rural areas. Though the proportion of rural population is showing a slight decrease over the years, but in absolute numbers, the rural population is growing at a higher rate than the urban population. This large population will require a wide range of consumable and durable goods and services. At the same time the need of
the rural areas does not automatically guarantee a market, unless it is backed by income and the resultant purchasing power. For a vast majority of the rural population, the main occupation is agriculture and allied activities. The graph below gives the distribution of rural population as per their occupation pattern.
Occupation Pattern of Rural India
2% 9% 10% 50%
Agricultural Labour Business Non-agricultural Labour Salary Earners Notgainfully employed
About half of the rural population own or lease land to cultivate it for their livelihood. Another 27% are dependent on these cultivators for their jobs as agricultural labourers. Thus, a total of 77% of rural population depend on land only for their living and land is their source of living. There are others, constituting small proportions, who are engaged in business like petty shopkeepers or merchants and salary earners like teachers, health workers and village level officials. The implication of this is that the income generation in rural areas entirely depends on how the land is used, what crops are cultivated, how much is marketed, how much is consumed and the marketing arrangements for the production. If rainfall is adequate, weather conditions are favourable and appropriate technology is available, the rural
the concentration of population is more when compared to states with low irrigation facilities and lack of arable land. Nearly 48% of the villages have a population of less than 500 persons or about 100 households. 4 . Thus the location and size of population of villages throw a challenge to marketers. 75% of income generation in rural areas is from agriculture and agriculture-related activities. This may be acceptable since the proportion of population covered by these 48% of villages account for only 12% of the total population. The villages are also not uniform in size. This also indicates that major part of income generated is a source of agriculture.Rural Marketing areas prosper as it has happened in the states of Punjab. It is much easier to cater to the needs of the urban population because of their concentration. which is probably of no consequence to marketers. Haryana and Western Uttar Pradesh. In states with high irrigation and fertile lands. This phenomenon is not true for the whole country and there are wide variations among the different states. Yet it should be borne in mind that the people of these villages also have land and cultivate and generate some income. One of the deterrents for marketers to exploit the rural market potential has been the vastness of the rural market in terms of areas covered and the location of the rural population. but it is very difficult in the case of rural population because of their widespread nature. So the disposable income in the hands of the rural people is very much conditioned by the status of agriculture and other allied activities.
Rural Marketing Literacy Levels in India ILLITERATE LITERATE 100 80 60 40 20 0 Rural Urban Given the distribution of rural and urban population. which is only 23%. television has proved to be an effective medium for communication with the rural masses. It appears to prove that communication should not prove to be such a big hurdle. Thus. since it is the main occupation in rural areas. It is an interesting got note that has been a considerable increase in the number of literate persons in rural areas since the last two decades. The market for agricultural inputs – fertilizers. This has its implications in communicating with the rural population. irrigation equipment and seeds – has been expanding over the years in rural 5 . it can be seen that the number of literates in rural areas are more than in urban areas. television reaches a larger segment of the rural population than any other form of mass media. pesticides. tractors. Though radio is also very popular. Assuming that the entire urban population is covered by the television but the television. insecticides. The telecasting network in the country today covers about 93% of the population. The above factors point that the potential for marketing of goods and services depends heavily on agriculture. then nearly 67% of the rural population will be covered by television. people like to see to believe. Today.
Rural Marketing areas as the Indian farming is fast becoming market-oriented. there is a need to first understand the rural market in terms of the characteristics mentioned above. Brooke Bond. Lipton. and P & G – have been trapping the potential of the rural market for a long time. The Features of Indian Rural Markets 6 . I. To successfully exploit the potential offered by the rural market. But the rural market has remained a dark area for those manufacturing and marketing consumables and consumer durables. Only a few established companies – HLL. TOMCO.
social backwardness. close to 70 per cent of the population is agrarian and contributes to about one-third of India’s GNP.Rural Marketing 1) Large and Scattered Market: . 7 . 5) Diverse Socio-Economic Backwardness: . This is different in different parts of the country. low savings.Nearly 60 % of the rural income is from agriculture. Roughly speaking.The consumers in the village area do have a low standard of living because of low literacy. 70. a location is defined as “rural”. if 75 per cent of the population is engaged in agriculture related activity.000 villages spread throughout the country. They do not prefer changes.Rural consumers have diverse socio-economic backwardness. low per capita income. etc. 4) Traditional Outlook: .The rural market of India is large and scattered in the sense that it consists of over 63 crore consumers from 5. Hence rural prosperity is tied with agricultural prosperity. 2) Major Income from Agriculture: . 3) Low Standard of Living: .The rural consumer values old customs and tradition. In India.
90 cr 82 Urban Population 10.1 cr 23.38.62 cr 65.5 cr 100 102.20 cr 15. About 55% of the villages have population in the range of 500 people or less. in several states like Uttar Pradesh.81 cr 100 Total 1990 50. Madhya Pradesh and Kerala. rural demand is scattered over a large area.82 cr % Total 2000 76.3 64.4 cr % Total 2010 76 74. 1990. 38. Rajasthan. Size of the Rural Consumer: The size of the rural consumer group can be understood from the following details provided in the table: Population of India Rural v/s Urban: 1980. 3. unlike the urban demand. Location Pattern of Rural Consumer: The urban population of India is concentrated in 3200 cities and towns and the rural population is scattered over 6. 2000 and 2010 Population Total % 1980 Rural Population 43.2 cr 24 28. 2. The influence is clear.7 cr % 72.Rural Marketing Profile of the rural consumer: 1. If we consider the state level picture. the rural population constitutes more than 80% of the total population. Literacy Level: 8 .3 27.91 cr 20 Total Population 54.365 villages. which is highly concentrated.8 100 Rural population forms a major portion of the Indian population as seen in the table.7 20. Statistics shows that out of the 6.3645 villages have populations of more than 5000 persons each. In states like Bihar and Orissa 90% of the population is in rural areas.3 cr 100 84.
6. The literacy rate has its implication in communication with the rural population. Today nearly 70% of the rural households are saving a part of their income. Rural Savings: The rural consumers have been drawn into the saving habit in a big way. low per capita income. The rural literacy in the rural area is on an increase. The commercial banks and the co-operative have been marketing the saving habit in the rural areas for quite some years. The pre-dominance of agriculture in the income pattern has one more significance-rural demand is more seasonal. Among the rural population Kerala tops with 77%. Rural prosperity and the discretionary income with rural consumers are directly tied up with agricultural prosperity. 9 . provided appropriate means are chosen. 4. The habit is particularly widespread among salary earners and selfemployed non-farmers. low standard of living. 5. low literacy level and overall low social and economic positions are the traits of the rural consumers. Significant Aspects: It can be seen in general sense low purchasing power. Rural Income: An analysis of the rural income pattern reveals that nearly 60% of the rural income is from agriculture.Rural Marketing It is estimated that there are 23% literate in rural India as compared with 365 of whole country. It appears that communication should not prove a hurdle.
fans. culture and even superstition strongly influence their consumption habits. baby care products and consumer durables are now getting good support in the rural market. engine oil. New product like toiletries. 10 . Changing Profile of Rural Marketing The position in the rural market was totally different some twenty years ago. etc.. V. etc. medicines. radio. Hindustan Lever sells its products like soaps. the rural consumers of India are a tradition bound community. readymade garments. detergents. is a leading marketer in agricultural implements.Rural Marketing By and large. Parle Agro is marketing 80% of its sale in the rural areas. Kirloskar and Crompton are leading rural marketers in diesel engines and agricultural machinery. Ltd. face cream. shampoos. in all rural markets on a large scale. At present there is a demand for certain articles like T. Batliboi and Co. religion.
Factors contributing to the growth of rural market: 1. 3. the revolution of ‘rising expectation’ of the rural people influenced the marketing environment of rural India. high support prices 11 . rural India generates 185 million tones of food grains per year and substantial output of various other agricultural products. new income and new purchasing power. 4. Green Revolution: A technological break through has taken place in Indian agriculture. 2. the government has been making concerted efforts towards rural development. Today.Rural Marketing In the service sector the Central Bank and Canara Bank are the largest banks in rural India. It enlarged the desires as well as the awareness of the rural people. Self employment policy with the assistance from the bank has become a great success in the rural areas. Expectation Revolution among Rural Masses: More than the green revolution. New Employment Opportunities: The income from new employment and rural development efforts launched in the rural areas has increased the purchasing power among the rural people. Favorable Government Policies: As a part of the process of planned economic development. Rural India derived considerable benefit from green revolution. In the recent years as a part of new farm policy. More and more manufacturers are turning towards rural markets because the urban are getting saturated. The massive investment in the rural India has generated new employment. The Indian rural markets have turned out to be gold mine for the marketers in the nineties. It brought about a powerful change in the environmental dynamics.
This brings about a social and cultural change in the buying behaviour of the rural consumer. Growth in Income: The rise in the income resulting from the new farming strategy is adding meaning and substance to the growing aspirations of the rural people. 8. literacy drive in rural areas has brought rapid growth of rural markets. subsidy. 5. 6.Rural Marketing are offered for farm products. 12 . HLL. Attraction for Higher Standard of Living : The rural consumers have been motivated to change their consumptions habits enjoy a higher standard of living by the growing awareness about better living and easy availability of information about the goods. Remittances from Indians working abroad have also made a sizeable contribution to the growing rural income and purchasing power. incentives. Various measures like tax exemption in backward areas. etc. 7. have started penetrating the rural market realizing the rising expectations and the demand revolution in the rural India. concessions. Literacy Growth: The literacy rate is on the increase in the rural areas.. They are exposed to mass media which create new demand for goods and services. Marketing Efforts: Firms like Bajaj. assistances.
shoes and chappals can be considered suited ideally 13 . E.Rural Marketing TECHNIQUES USED IN RURAL MARKETS 1. The strategies of the 4 P’s of the marketing mix would be an ideal one for the rural market. etc have tested this method. biscuits. 2.V. Small Unit Packing: This method stands a good chance of acceptance in rural markets. Rural Market Strategies (DEVELOPMENT STRATEGIES FOR RURAL MARKETING IN INDIA) An appropriate segmentation of highly heterogeneous rural market and identification of the needs and wants of different segments will form the very basis for rural marketing strategies. pickles. The advantage is that the price is low and is easily affordable by the rural consumer. Products like shampoos.g. P.C. a. keeping in view the rural life style. New Product Designs: The manufacturer and the marketing men can think in terms of new product designs. PRODUCT STRATEGIES: The following are the product strategies for the rural market and rural consumers: 1.
For the rural consumers. Sturdy Products: Sturdiness of the product either in terms of weight or appearance is an important criterion for rural consumers. PRICING STRATEGIES: Pricing strategies are linked to product strategies. developed and introduced BAHADUR (a low cost medium wave receiver) during the early seventies. A brand name or logo is very important for a rural consumer for identification purposes. Low Cost/Cheap Products: This is a common strategy widely adopted by manufacturing and marketing concerns wherein the price can be 14 .C. 5. Phillips India Ltd. items is also low and affordable. Utility Oriented Products: Rural consumers are more concerned with the utility of the product and its appearance.Rural Marketing for rural consumers due to adverse working conditions. Initially the sales were good but declined subsequently. 4. 1. Brand Name: The rural consumers do give their own brand name on the name of an item. e. b. The price of P. heavier weight means that the product is more durable.g. The product packaging and presentation also keeps the price low to suit the rural consumer. the experience of torch light dry battery cell manufacturers supports this because rural consumers preferred dry battery cells which are heavier than the lighter ones. on investigation it was found that the rural consumers chose to purchase radios for entertainment purposes. not only for news & information. 3.V.
E. Milk protein is expensive whereas Soya protein is cheaper. 3. 2. 15 . Soya protein is being used instead of milk protein. Refill Packs/Reusable Packaging: Health drinks available in the urban areas. By doing so the percentage of villages covered comes to only 10% of all the villages but the rural population covered will be substantial.whether it is consumable or durable. 1. Application of Value Engineering: In the food industry. The nutrition content of both being the same. shampoo sachets. Coverage of Villages with 2000 & Above Population : Coverage of villages with up to 2000 and above population could be the break even point for a distribution setup. tea. thus expanding its market. coffee & many other consumer goods re available in refill or reusable packages. Use of Co-operative Societies: Co-operatives have an arrangement for centralized procurement and distribution through their respective state level federation. c. the life of the product and other factors have to be kept in mind. etc. The containers can be put to multipurpose uses. 2. Such state level federations can be motivated to procure & distribute consumable items and low value items to the members of the society for selling to the rural consumers. the characteristics of the product .Rural Marketing kept low by low unit packing like paisa pack of tea.g. which can have a significant impact in the rural market. The basic aim being to reduce the value of the product so it becomes affordable to a larger segment. PHYSICAL DISTRIBUTION STRATEGIES: While it is necessary to formulate specific strategies for distribution in rural areas.
whose effective utilization should be explored by the manufacturing and marketing men. as per the essential commodities Act. 5. Shandies/Haats/Jathras/Melas: These are the places where the consumers congregate as a rule. Its purpose is to make available essential commodities like food grains. seeds. normally timed with religious festivals. In addition to petrol. Shandies/Haats are held on a particular day every week. can be stocked at these outlets. There are about 2 lakh fertilizer dealers in the country both in co-operative & private sector. sugar. Varana-Nagar in Maharashtra. Agricultural Input Dealers: Fertilizers should be made available to the farmers within the range of about four to five km. co-operatives etc. from their residence. 7. fertilizers. Distribution upto Feeder Markets/Mandi Towns: Keeping in view the hierarchy of markets for the rural consumers. etc. Who have an arrangement for centralized for procurement and distribution? 4. diesel etc. kerosene etc. the feeder markets and the mandi towns offer excellent scope for distribution. to the consumers at a reasonable price. 6. E. Fair price shops are run by the state civil supplies corporation. From the feeder towns and the mandi towns the stockist or the wholesaler can arrange for distribution to the village shops in the interior places.g. Utilization of Public Distributor System: The PDS in the country is fairly well organized. Utilisation of Multipurpose Distribution Centres by Petroleum/Oil Companies: Petroleum/oil companies have evolved a concept of multipurpose distribution centres in rural areas. Jathras and Melas are held once or twice a year for longer durations. where sugar & milk co-operatives have 16 .Rural Marketing 3. These outlets can be profitably used for selling consumable & durable items.
This is the reason why opinion leaders are thriving among rural consumers. Word of Mouth holds a lot of validity in the rural areas.Rural Marketing totally changed the life styles of people. banners. 3. 2. Tractors owners meet (tonee) conducted by MRF. PROMOTION STRATEGIES: The promotion measure should be cost effective. A highly motivated sales person can achieve this. Word of mouth is an important message carrier in the rural areas and ‘opinion leader’ play a significant role in influencing the prospective rural consumers about accepting or rejecting a product or a brand. Mass Media: Mass media is a powerful medium of communication. Special Campaigns: These should be undertaken during harvest & marketing seasons in rural areas. Cinema c. Print Media: handbills. Personal Selling and Opinion Leaders: In personal selling it is required that the potential users are identified and awareness is created among them. E. The supermarket in VaranaNagar caters to exclusively to rural consumers. Television b. d. Other attributes are explained as under: 1. Radio d. The mass media generally used are: a. posters.g. 17 . etc. booklets.
easy household working. Rural Product Categories The NCAER has categorized the consumer goods into three categories. fans etc. Products are physical and tangible. The main consideration in individual product/service offer is developing of product at three levels. health care.g.Products are of immediate use to the family.Here products are a combination of means to supplement income.mixer grinder. E. etc.Products are a combination of entertainment products and products that ease household work strain.Rural Marketing I. Category II..g. motorcycle. etc. motorcycle. Services are intangible and people based. E. E.bicycles. Category III. and source of entertainment.g. Category I. cassette player etc.washing machine. . – footwear.g. E. 18 .Product Item Decisions: The product or service offered by the marketer has the ability to satisfy the needs & wants of the customer. etc. E.g. . 2. 3.
Durability. the need for brushing teeth. Features c.g. For an e. Every product has five characteristics: a. Capability. 2. Products are transient. Tangible Product Development: The product concept becomes visible and operational when the psychological needs are specified in physical terms. but the basic needs of the consumer group remain the same. A product that provides the important form utility and ensures performance of the basic function is the core product. Packaging e.old products were neem sticks. charcoal. 19 . Branding Quality: Success in the market depends on offering products to the market segments that will be profitable. Core Product Development: Core product refers to the advantages that are specified by consumer needs. Style/design d. etc. Economy. tooth powder is used. Quality signifies the ability of the product to meet the following expectationsReliability. whereas now toothpaste. still the need for brushing the teeth remains the same. Business is to be viewed as a customer satisfying process & not as a goods producing processing process. Quality b. Core product developer has to focus on the needs of the consumer.Rural Marketing Namely1.
They are improvements provided for more comfort and convenience. beliefs & notions about the quality of products. e. form. which are of value to the buyers. bottles. ease of service of service. 20 . convenience of operation. since consumers develop their own norms. All products need shipping package. Rational. shape & style. The features.g. corrugated boxes. etc. which capture the attention of the buyer. They are of two types i.g. repair & costs. e. Shipping package.To carry the secondary package from one place to another e. Features: Features are extras to a product. iii. cardboard boxes. Packaging: It is providing a container/wrapper for a product for the purpose of handling & protection.g. colour. aesthetics. Primary package. so as to bring out an artistic unit with functionality.To hold the product. etc. are less functional and fancier in nature. problem solving ii. Secondary package. which are acquired through design. fancy The consumer is willing to pay for the solutions to the problems he has in using the product. Emotional.Rural Marketing Efficiency The product designers should interact with the marketers to know how the consumers evaluate the quality of products. ii.To hold the primary package. Design and style: Design means the arrangements of parts. Good design adds to the product attractiveness and usefulness. The three levels arei. The three components of personalities are structure.
The rural markets were kept in mind & this type of package was developed keeping in mind the convenience of storage after use. The brand names should be easily understood & recognized by the rural consumer. symbol. Branding: Brand is the term.Battery with the cat as a symbol. sign. -‘Billi waali cell’ . PRICING FOR QUALITY CONSCIOUS CUSTOMERS: These customers are basically concerned with functional benefits and value-for-money. which helps to identify the seller products & identify them from competitor products.g. Augmentation requires fortifying the product strategy with extra force drawn from other P’s due to which the product offers make buying a pleasant and exciting experience. The rural brands are recognized through symbols. name. design or a combination of them. 5.Eveready. If a marketer wants to develop an effective pricing strategy for these customers he must know whether the price quality relationship holds good for the market. 3. Unfamiliar & absurd brand names cause hesitation in the minds of the consumer. They are neither sachets nor bottles & works on the principle of capillary action. logos and colours. Augmented Product Development: The marketer should have a vision to look at the specific needs of the consumers and their related requirements. Its primary purpose is creating an identity of the product. E.Rural Marketing HLL has made ‘bubble pack’ shampoos. He needs a broader view to have the whole picture of consumption of the consumer. 21 . Price in Marketing Mix for Rural Market 1.
Social Consciousness: Shoes and shirts that are publicly consumed products have a strong price quality relationship than privately consumed products like tooth powder and underwear. Therefore companies create a hierarchy of products establishing price quality relationship. stronger the price quality relationship. Quality Differences: Larger the perceived difference quality of brands in a category. e. Place Availability: Price quality relationship is stronger for the brands sold to the premium market within the same product category. c. the price quality relationship is stronger. b. a.g. 6. E. Need Compulsion: Certain products that fulfill certain needs will have a strong price quality relationship. home appliances. Price Consciousness: Higher the price consciousness of the consumer and more price variations within a particular category of product. For e. d. a reputed doctor or lawyer would charge premium rates for their services because their services are viewed essential. f. Pricing Methods 22 .g. the price quality relationship is stronger. Quality Uncertainty: Greater the uncertainty involved in judging the quality of product.Rural Marketing Six propositions emerge which are applicable to rural market as well as urban market.
. For each feature which enhances attractiveness. reliability. Location Pricing: Same product is priced differently at different locations. Chota Pepsi – Rs. etc. E. 23 .g. cars. Discriminatory Pricing: This is employed to charge different customer groups differently projecting differences of quality of offer. Psychological Pricing: Psychological pricing may be in the form of reference pricing or image pricing. This pricing is effective in case of ego sensitive products like cameras.g. 5 ii. In reference pricing the marketers position and sell products at higher prices by endorsement of products by celebrities or placing products with classy products. The differences discriminatory pricing are i.g. the marketer charges an extra price. During summer. Product Form Pricing: Different versions of the product are priced differently. Residential places in city are costly. hill resorts charge higher rates. iii. durability convenience. Time Pricing: Prices varies by days or seasons.Rural Marketing Marketer can employ the following methods when price-quality relationships are associated. Since price acts as a signal of quality people prefer to buy expensive ones. E. etc. Another form of psychological pricing is image pricing. Perceived Value Pricing: In order to enhance the customers perceived value companies add features to their products. sunglasses. E.
This technique does not sacrifice the technical efficiency of a product but lowers the product price. which are in demand by the farmers. Most fertilizers companies pack fertilizers in LDPE or HDPE sacks which can be washed & reused. We now find costly materials being replaced by cheaper reinforced plastic. Such measures can have significant impact too. since the price can be reduced to the advantage of rural consumers.Rural Marketing 7. General Pricing in Rural Markets a) Low Cost/Cheap Products: The price can be kept low by low unit packing like paisa packs of shampoo sachets etc. 24 . This is a very common strategy which is being widely adopted by many marketers. c) Application of Value Engineering: The application of value engineering evolves cheaper products by substituting costly raw material with a cheaper one. In addition the packaging material used should be reusable in rural areas. b) Refills/Reusable Packaging: The refill packs benefits the consumers in terms of price.
Rural Marketing involves more intensive personal selling efforts than Urban Marketing. 3. Willingness to Get Located in Rural Areas: It is common knowledge that the rural areas lack modern amenities compared to urban areas. The rural salesman needs a strong background of the local language. In order to match the peculiar rural market conditions. Unique Traits on the Part of the Salesman for Rural Market Personal Selling is an essential element in rural marketing. It is only those who are genuinely happy in living and working in the villages can become good rural salesman.Rural Marketing 8. the rural salesman require certain additional traits & capabilities listed below1. Knowledge of Local Language: This is the basic requirement for a rural salesman that he should be well versed with the local language. Since the cultural patterns of the rural community differ from one another. The basic traits of Personal Selling are enthusiasm. Because of this factor salesmen are generally elected to work in rural centres. communication skill and knowledge of selling techniques which are required in equal measures by both urban & rural salesmen. Cultural Congruence: The salesman must have proper acquaintance with the cultural pattern of rural in the given rural territory. a 25 . 2.
They are compelled to handle a large variety of items and basically become a jack of all trades. Attitude Factor: The rural salesman must have a great deal of patience and perseverance as their customer is a traditional person. He may have to spend a lot of time with the customer and also make several visits to gain a several response from him. Managing Sales Force of Rural Market: The task of sales force management carries certain added dimensions in the rural context. The rural salesman usually does not generate economic value of business if they handle few products. 9.Rural Marketing cultural background i. 6. using consumption pioneers and opinion leaders. It will not be possible for the rural salesman to clinch the sales quickly. 4. The major concern in sales function 26 . The rural salesman must endeavor to introduce them in the rural market through creative selling. in giving the orientation. in motivating them and in developing them the sales manager has to adapt to the unique requirement of rural selling. 5.e. Capacity to Handle a Large Number of Product Lines: The rural salesmen are often required to handle a much large number of product lines as compared to their urban counterparts. In selecting the salesman. Greater Creativity: Often the product concerned may be very new in the rural context. in consolance with the culture of given rural community is a specific requisite of success for the rural salesman.
help improve trade sales. dealers etc. Effective use of Resources: Salesperson should not resort to dumping of stocks in order to achieve sales targets. Training and motivating the distributors. Organising campaigns with special emphasis on farmers’ contacts and demonstration will be important in order to increase demand for the product. He has to identify & develop distribution system and undertaking demand generation activities are necessary for the developing the market for the future. He should ensure that stocking of goods is proportional to expected sales. 27 . The services of NGO’s can be used e. dealers etc. Improve Company’s Image: A sales person is the link between the customers and the company. He is the company’s ambassador in the market. g. Colgate Palmolive used NGO’s to promote its toothpaste Colgate ‘Supershakti’. 2. Transactions are based on trust in the salesperson. call on more customers consisting of farmers.Rural Marketing is to constantly improve profitability of the territory. Increase Sales: The sales person has to identify his own and customers potential. it will help him in collecting dues as per the credit policy of the company. It is therefore important that he creates a good impression of the company in the eyes of the customers. 4. 3. Develop Future Market: The salesperson will have to keep in touch with the latest advancements in the market. The salesperson has to undertake the following activities in the field. 1.
28 . Structuring the sales force. 9. Self Improvement and Development: The salesman need comprehensive on the job training in selected village markets. They need to be educated about the rural marketing environment in addition to be trained in salesmanship. 10. Decide sales force size. Determination of personal selling objectives 2. recruitment and training. Managing sales force compensation. Fixing targets and quotas. Selection. Sales co-ordination and control. The possibilities are enlisted below: A) The Formal Organised Media: 1. MAIN TASKS INVOLVED IN SALES FORCE MANAGEMENT: 1. Formulation of sales policies 3. Selecting Proper Media Mix: The firm has to choose a combination of formal & non-formal media in the rural context. T. V. transmission & 27% of all rural people actually watch T.V. 11. motivation and supervision. 7. 6. and in selling techniques. 4. 77% of the villages in India receive T.: It has the potential to become the primary medium for rural communication. Sales communication and reporting. 8. V.Rural Marketing 5. 5.
Audio Visual Publicity Vans (AV Vans): The AV unit is very useful for rural communication. Radio: It is a well-established medium in rural areas. Advertisements. The van can be used for sales campaigns in addition to 29 . Most villages have cinema house. inexpensive and appealing medium.. 3. 3. documentaries combining knowledge and entertainment can be employed for rural communication. The firm can exhibit films. Outdoor: Many companies are using Hoardings. and House-to-House Campaigns: The promotion staff of the firm can effectively carry the product messages and demonstrations to the target audience at the group meetings. as part of their outdoor medium. B) Informal/Rural Specific Media: 1. The traditional art forms such as puppet shows. Harikatha. Demonstration. presentations. Promotion squads make house-to-house visits. 2. 4. slide shows etc. Group Meeting. Expansions in broadcasting facilities have taken place over the years. etc. which can be used in cinema houses etc.Rural Marketing 2. and Puppet Shows: Music cassettes/records are a very effective. Wall Paintings. harikathas render themselves for communication in rural society and can be used at melas. They carry along product samples and promotion literature along with them. Music Records. Cinema: 29% of rural people watch cinema as a part of their regular lifestyle. where people gather regularly.
understand the case it is important to first understand some rural facts: Facts on Ownership: 95. To 30 . They also bring market feedback to the firm. Advantages of interpersonal media are they are segment specific.9 percent of rural households (HHs) are self-owned 31 percent of rural HHs owns a radio and an equivalent number own a TV.5 percent of the HHs owns a two-wheeler. The biggest myth that exists in the minds of most marketers is that rural is all about traditional dhoti clad villagers living in huts. 4. Interpersonal Media: They have a special merit since they facilitate two-way interactions. They are quite popular with rural marketing firms.Rural Marketing promotions campaigns. The reality however is very different. market specific and score high when it comes to participation and involvement of the audience. This clearly depicts that it is now becoming difficult to differentiate between the rural and urban class. 8. 27 percent own wristwatches.
Facts on Living Standards: 45 percent of rural India has pucca houses. But these products are losing favor. The company claims to have persuaded about 300 million people into using oral hygiene products in the country for the last 25 years. Colgate. neem sticks.6 Crore HHs have telephone connections. 48 percent uses dental products (toothpowder/toothpaste). 31 . 76 percent uses detergent (powder/liquid). 3. salt and powder mixtures have been some of the traditional form of oral hygiene products used in rural India. 6.5 Crore individuals in rural India are covered by life insurance policies.Rural Marketing Facts on Consumption: 95 percent of rural India uses toilet soaps. The COLGATE Case Study Charcoal. husk. especially due to the efforts of many organizations and companies. foremost among them.
Colgate soon got popular in rural India as well. Maintaining a steady market share in the oral care product segment wasn’t tough job for Colgate. on its part. Infact the brand has become so generic with the product itself that it is not surprising to find rural consumers asking for Colgate when they buy toothpaste or tooth powder or tooth brush. the rest coming on urban sales.Rural Marketing TOOTHBRUSH MARKET SHARE OF KEY PLAYERS Smithkline Gilette Colgate Colgate HLL Gilette Smithkline HLL Known as one of the leading brands for oral care in and around the world. Colgate was heading for a total monopoly in the rural markets. and it was leaving no stone unturned for doing the same. but that’s exactly what it didn’t want. The company. 32 . says that the rural markets account for about one third of its total sales.
After conducting a small research in the rural areas Colgate concluded with five things that were common in all their rural consumers across India. 33 . Elderly person in the family have the decision authority. they were:Rural consumers are brand loyal.) Literacy level is on an increase. Colgate stepped up its rural promotion drives with IDA (Indian Dental Association) to add value. Bright Futures”. so lesser scope to spend.Rural Marketing TOOTHPASTE MARKET SHARE Balsara Colgate HLL Smithkline Smithkline Balsara Colgate HLL ‘Aggressive’ is the only word that could perfectly describe the advertising and sales promotion strategy of Colgate. They have disposal income (i. This has been the stepping stone to the high penetration in rural minds. schools dental education program. Bright Smiles. Since 1976.e. because their needs are limited. Colgate has been doing this through its rural promotion vans and “Young India.
e. Suggesting and implementing a rural promotional scheme was what Colgate called ‘Sampark’ for.000 villages of which 15. as they were specialist in rural advertising category. or a radio. from the usage of manjans and datoon to toothpaste and tooth powder. Colgate contacted 6 million people in 20.000 villages had not experienced the availability of toothpaste and toothpowder let alone toothbrushes. Colgate decided to do this by controlling various advertising and promotional activities. High quality products was always a plus point of Colgate all they had to do was to now tap the still unattended rural markets and change their habits i.V.Rural Marketing If a brand is turned down in a household in a village. In 1998. Going in for mass media would not prove to be costly but the reach would be limited as. TOOTHPOWDER MARKET SHARE HLL Colgate Dabur HLL Dabur Colgate 34 . the whole village sooner or later boycotts the brand. still only very few people own and possess a T. Sampark had limited budget to their disposal.
they were highly decorated so as to get more curious eyes and in the process educate the rural folk. these are usually 10-40 seconders which were educational and used to feature either actors. jargons and idioms. retailing etc. These vans also did a number of other activities at a time such as spot selling. These people would move about in the villages telling the people about the pros of using advanced oral care products and the cons involved in tradition oral care system. There are puppet shows done in the villages educating the villagers about the plus points of using modern hygiene products. The next best option that ‘Sampark’ choose after door to door selling was ‘publicity vans’ also called as A/V vans. local lenders.Rural Marketing Sampark wanted something that had far and wide reach that is why Sampark decided to their advertising by door to door selling. 60 percent of the towns were covered by Colgate with their own distribution strategy and the remaining 40 percent was covered by other distributors. This not only helped Colgate communicate easily with the consumer but was also effective in sending the right message across to the rural consumer. later on after the movie would end free samples were distributed to the 35 . These vans used to travel from village to village and depending upon the market day in that specific village. this was quite difficult as rural people always felt that natural was the best. Educational films were also shown in between movies in theatres. offer sampling at stalls setup near the van. for a farmer just like the ones viewing the documentary. The roving Colgate vans. Sampark hired people from a certain locality who knew the local language. sampling. Seventy promotion vans do the rounds of the country and educate rural folks on oral hygiene products such as toothpaste. the other plus point of this message was that the communication gap was reduced to a large extend. after screening a 22 minute film on oral hygiene that explains how to use the product. Colgate trained these salesmen to convince the rural population and make them try the free sample that Colgate was distributing free. The vans used to be parked in strategic locations. toothpowder and toothbrushes.
PROJECT ON TECHNIQUES USED IN RURAL MARKETS 36 . S. The thrust towards promotion through schools has done wonders in changing the awareness levels as well as a shift towards the new decision-makers in the rural families.T. COLLEGE OF ARTS AND COMMERCE ULHASNAGAR-4 SUBMITTED TO: PROF SHRIVANI.Rural Marketing audience.S. these tactics are also used in Haats and Melas thought the length and breadth of India.
The real challenge of building a sustainable market linkage starts here. 37 . This process should ensure the participation of rural people as consumers and producers in the globalization mechanism.Rural Marketing SUBMITTED BY: CONCLUSION The core of a scientific approach is to understand the market opportunities for rural products along with the country's development priorities and to chalk out a strategy where rural industries have an important role to play. with better livelihoods and global access to markets.
Rural Marketing Index 38 .
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