Introduction

The concept of Rural Marketing in India Economy has always played an influential role in the lives of
people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are
connected with rural markets.
The rural market in India is not a separate entity in itself and it is highly influenced by the
sociological and behavioral factors operating in the country. The rural population in India accounts
for around 627 million.

The Registrars of Companies in different states chiefly manage: The rural market in India brings in
bigger revenues in the country, as the rural regions comprise of the maximum consumers in this
country. The rural market in Indian economy generates almost more than half of the country's
income. Rural marketing in Indian economy can be classified under two broad categories. These are:
 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

The concept of rural marketing in India is often been found to form ambiguity in the minds of people
who think rural marketing is all about agricultural marketing. However, rural marketing determines
the carrying out of business activities bringing in the flow of goods from urban sectors to the rural
regions of the country as well as the marketing of various products manufactured by the non-
agricultural workers from rural to urban areas. To be precise, Rural Marketing in India Economy
covers two broad sections, namely:
 Selling of agricultural items in the urban areas
 Selling of manufactured products in the rural regions

Some of the important features or characteristics of Rural Marketing in India Economy are being
listed below:
 With the initiation of various rural development programmes there have been an upsurge of
employment opportunities for the rural poor. One of the biggest cause behind the steady
growth of rural market is that it is not exploited and also yet to be explored.
 The rural market in India is vast and scattered and offers a plethora of opportunities in
comparison to the urban sector. It covers the maximum population and regions and thereby,
the maximum number of consumers.
 The social status of the rural regions is precarious 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 impediment in the progression of this sector.
 The steps taken by the Government of India to initiate proper irrigation, 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.

Advertising

An Amul butter ad on Pakistan's Kargil War fiasco. The image shows the "Amul baby" in
between George Fernandez and Atal Behari Vajpayee.
In 1966, Amul hired Sylvester da Cunha, then managing director of the advertising agency AS to
design a new ad campaign for Amul Butter. daCunha designed an add campaign as series of
hoardings with topical ads, relating to day-to-day issues. The campaign was widely popular and
earned a Guiness world record for the longest running ad campaign in the world. Since the 1980s,
cartoon artist Bharat Dabholkar has been involved with sketching the Amul ads, who rejected the
trend of using celebrities in advertisement campaigns. Dabholkar credited chairman Varghese Kurien
with creating a free atmosphere that fostered the development of the ads.
Despite encountering political pressure on several occasions, daCunha's agency has made it a policy
of not backing down. Some of the more controversial Amul ads include one commenting on Naxalite
uprising in West Bengal, on the Indian Airlines employees strike, and the one depicting the Amul
butter girl wearing a Gandhi cap.
Amul ("priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya," (meaning
Precious) was suggested by a quality control expert in Anand.), formed in 1946, is
a dairy cooperative in India. It is a brand name managed by an apex cooperative organisation,
Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by
some 2.8 million milk producers in Gujarat, India.
Amul is based in Anand, Gujarat and has been an example of a co-operative organization's success in
the long term. "Anyone who has seen … the dairy cooperatives in the state of Gujarat, especially the
highly successful one known as AMUL, will naturally wonder what combination of influences and
incentives is needed to multiply such a model a thousand times over in developing regions
everywhere."

Branding

 The Amul Pattern has established itself as a uniquely appropriate model for rural development.
Amul has spurred the White Revolution of India, which has made India the largest producer of milk
and milk products in the world. It is also the world's biggest vegetarian cheese brand .
Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an annual
turnover of US $1700 million (2009-10) . Currently Unions making up GCMMF have 2.9 million
producer members with milk collection average of 9.10 million litres per day. Besides India, Amul has
entered overseas markets such
as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, HongKong and a few
South African countries. Its bid to enter Japanese market in 1994 did not succeed, but now it has
fresh plans entering the Japanese markets. Other potential markets being considered include Sri
Lanka.

Dr Verghese Kurien, former chairman of the GCMMF, is recognised as a key person behind the
success of Amul. On 10 Aug 2006 Parthi Bhatol, chairman of the Banaskantha Union, was elected
chairman of GCMMF.

Brand Building

GCMMF (AMUL) has the largest distribution network for any FMCG company. It has nearly 50 sales
offices spread all over the country, more than 3,000 wholesale dealers and more than 5,00,000
retailers.
AMUL is also the largest exporter of dairy products in the country. AMUL is available today in over
40 countries of the world. AMUL is exporting a wide variety of products which include Whole and
Skimmed Milk Powder, Cottage Cheese (Paneer), UHT Milk, Clarified Butter (Ghee) and Indigenous
Sweets. The major markets are USA, West Indies, and countries in Africa, the Gulf Region, and
[SAARC] SAARC neighbours, Singapore, The Philippines, Thailand, Japan and China.
In September 2007, Amul emerged as the leading Indian brand according to a survey by Synovate to
find out Asia's top 1000 Brands.
In 2011, Amul was named the Most Trusted brand in the Food and Beverages sector in The Brand
Trust Report, published by Trust Research Advisory.
Channel of distribution in Rural Market

On one side are the fast-moving consumer goods (FMCG) and the consumer durables companies. On
the other are consumers in rural India, potentially the largest segment of the market. Finally, the
two are coming together.

The fact that this has not happened in the past is not for want of trying. In Mumbai and New Delhi
corner offices, executives have long recognized that to build real sales volumes they will have to
reach outside the big cities. In several categories, rural India already accounts for the lion's share.
According to MART, a New Delhi-based research organization that offers rural solutions to the
corporate world, rural India buys 46% of all soft drinks sold, 49% of motorcycles and 59% of
cigarettes. This trend is not limited just to utilitarian products: 11% of rural women use lipstick.
Other numbers are equally revealing. According to the National Council of Applied Economic
Research (NCAER), an independent, non-profit research institution, rural households form 71.7% of
the total households in the country. Spending in this segment is growing rapidly and consumption
patterns are closing in on those of urban India. Jagmohan Singh Raju, a professor of marketing at
Wharton, says: "No consumer goods company today can afford to forget that the rural market is a
very big part of the Indian consumer market. You can't build a presence for a brand in India unless
you have a strategy for reaching the villages."

Several European multinational firms and a few U.S. firms have been making inroads into rural India
for years. Companies such as Unilever, Phillips and Nestle have long been known to India's
rustic dukaandaars, or merchants. Among U.S. firms, companies such as Colgate and Gillette have
made considerable headway. According to Raju, marketing to rural customers often involves building
categories by persuading them to try and adopt products they may not have used before. "A
company like Colgate has to build toothpaste as a category, which means convincing people to
change to toothpaste instead of using neem twigs to clean their teeth, which was the traditional
practice," he says. "This is difficult to do and requires patience and investment by companies. It's not
like getting someone to switch brands."

Companies that have figured this out are doing better in the villages than in the cities. Soft drinks
giant Coca-Cola is growing at 37% in rural markets, compared with 24% in urban areas. According to
Hansa Research, a market research firm that has published a Guide to Indian Markets 2006, the
penetration of consumer durables has risen sharply in India's villages between 2000 and 2005. In
color TVs, sales are up 200%; in motorcycles, 77%. In absolute numbers, however, the penetration is
still low. Coke, for instance, reaches barely 25% of the rural market. This means the upside potential
is huge for companies that develop effective rural marketing strategies.

According to NCAER, the low penetration rates can be attributed to three major factors: low income
levels, inadequate infrastructure facilities and different lifestyles. But income levels are going up,
infrastructure is improving and lifestyles are changing. Almost a third of the rural population now
uses shampoo compared with 13% in 2000, according to Hansa Research.

FMCG and consumer durables companies have in the past tried tinkering with all the four 'P's --
product, pricing, promotion and place-- of the marketing mix. Hindustan Lever -- which is in the
process of changing its name to Hindustan Unilever to reflect the fact that it is the Indian subsidiary
of the Dutch conglomerate -- is among India's largest FMCG companies. It has been highly successful
in marketing in rural India and has been a pioneer in reaching out to the smallest of villages with
innovative products such as single-use packets of shampoo that sell for a penny. (The rural consumer
uses shampoo on rare occasions; she does not want to invest in a bottle.)