STUDY ON RURAL MARKETING:-EMERGING TRENDS AND STRATEGIES

A Project Submitted to
University of Mumbai for partial completion of the degree
of Master in Commerce (Business Management)
Under the Faculty of Commerce

By

SONALI SUNIL DAPHALE

ROLL NO 13

Under the Guidance of

PROF. DR. SHRADHA B. SAKLECHA

K.P.B.HINDUJA COLLEGE OF COMMERCE

315, NEW CHARNI ROAD, MUMBAI 400004

DECEMBER, 2021
 CERTIFICATE

This is to certify that MS. SONALI SUNIL DAPHALE has worked and duly completed her Project Work

for the degree of Master in Commerce (Business Management) under the Faculty of Commerce in the subject

of PROJECT WORK and her project is entitled “STUDY ON RURAL MARKETING:- EMERGING

TRENDS AND STRATEGIES” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no part of it has

been submitted previously for any Degree or Diploma of any University.

It is her own work and facts reported by her personal findings and investigations.

Seal of _______________________________
the
PROF. DR. SHRADHA B. SAKLECHA
College

Date of Submission
 DECLARATION

I undersigned Ms. SONALI SUNIL DAPHALE hereby, declare that the work embodied in this project work

titled “STUDY ON RURAL MARKETING:- EMERGING TRENDS AND STRATEGIES”, forms my

own contribution to the research work carried out under the guidance of PROF. DR. SHRADHA B.

SAKLECHA is a result of my own research work has not been previously submitted to any other University

for any other Degree/ Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and

included in bibliography.

I, here by further declare that all the information of this document has been obtained and presented in

accordance with academic rules and ethical conduct.

_________________________

SONALI SUNIL DAPHALE

ROLL NO 13

CERTIFIED BY

______________________________

PROF. DR. SHRADHA SAKLECHA

 ACKNOWLEDGMENT

To list who all have helped me in difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the completion
of this project.

I take this opportunity to thanks the University of Mumbai for giving me chance to do this project.

I would like to thank my Principal, Dr. Minu Madlani for providing the necessary facilities required for
completion of this project.

I take this opportunity to thank our Asst. Prof. Dr. Iyer Seethalakshmi for the moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Prof. Dr. SHRADHA B.
SAKLECHA whose guidance and care made the project successful.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the completion of
the project especially my parents and peers who supported me throughout my project.
 Executive Summary

The project took place at K.P.B. Hinduja College of Commerce, entitled “Study on Rural Marketing :-
Emerging Trends And Strategy”. The main purpose of this study is to analyse the performance, Trends and
strategy used in Rural marketing.

Rural marketing involves the process of developing, pricing, promoting, distributing rural specific
product and a service leading to exchange between rural and urban market which satisfies consumer demand
and also achieves organizational objectives. In recent years, rural markets have acquired significance, as the
overall growth of the economy has resulted into substantial increase in the purchasing power of the rural
communities. These markets are extremely attractive with its vast potential but also provide challenges. It is a
classic case of risk return situation. The key to reducing the risk is to understand the market, the consumer
need and behaviours. The marketers in recent years are thus facing an extremely difficult and challenging tasks
of catering to the rural sector, which is now almost impossible to ignore because of its rising income,
population growth rate and government thrust on primary sector growth in its current five years plan. This
market was so far been left largely to the mercy of local, cheap and fake products apart from few large
companies. Organizations in order to succeed are now redefining their marketing mix strategies for the hugely
untapped or rather poorly serviced rural markets, which by its sheer population size is much bigger than the
combined population of many of the foreign nations.

The aim of this research is to study the current scenario of Rural Marketing in India, the rural
market presents with its various opportunities and challenges, given how diversely populated the rural
consumers in India are. The rural market consists of 83.3 crore people and this is what attracts marketers
to enter in this market. To market in the territory of rural marketing corporations must understand the
rural consumer and other environmental factor in rural market. There is a shift incoming from urban to the
rural marketing as the development and levels of literacy and awareness among the rural consumers is rising
and these consumers want value for their money. Marketers when catering to rural consumers need to
connect with them and also undertake demonstrations for the better understanding of the rural people.
Many innovations in the strategy to market into the rural markets have been undertaken in the past years.
 INDEX

CHAPTER NO. TITLE OF THE CHAPTER PAGE NO.

Executive Summary
1 Introduction to The Rural 1 -10
marketing
1.1 Introduction
1.2 Concept, Meaning &
Definition of Rural Marketing
1.3 Evolution in Rural Marketing
1.4 Needs of Rural Marketing
1.5 Characteristic, Importance
&Types of Rural marketing.

2 Research Methodology 11-12

2.1 Introduction
2.2 Problem Statement
2.3 Types of Research
Methodology
2.4 Sampling Design
2.5 Data Collection
2.6 Objective of the study
2.7 Limitation of the study

3 Review of Literature 13-14

3.1 Review Of Literature Related
To Rural marketing: Trends &
Strategies

4 Introduction to Rural India & 15-36

Marketing
4.1 Rural India, Important ,
opportunity
4.2 Challenges in Rural Marketing
4.3 4 A’s in Rural Marketing
4.4 Difference between Rural &
Urban Marketing
4.5 Rural Marketing Environment
& importance
5 5.1 Present Scenario in Rural 37-54
Marketing
5.2 Analysing trends of Rural
Marketing
5.3 Trends in Rural Marketing
5.4 Strategies for Marketing Mix in
Rural Markets
5.5 Solutions to the Problems of
Rural Marketing in India
5.5.1 Steps taken by government in
Developing rural Markets
5.5.2 Developments of Rural
Marketing In India
5.5.3 Government Initiative
6 6.1 Case Study 55-63
6.2 HUL PROJECT SHAKTI
7 7.1 Data Analysis And 64-80
Interpretation.
8 FINDINGS, SUGGESTIONS 81-82
AND CONCLUSION
8.1 Findings Of The Study
8.2 Suggestions Of The Study
8.3 Conclusion Of The Study

- BIBLIOGRAPHY 83
 LIST OF CHARTS

CHART NO. TITLE OF THE CHART PAGE NO.

7.1 Gender of Respondent 64
7.2 Age of Respondent 65
7.3 Occupation of Respondent 66
7.4 Dose the rural market form the 67
main and major part for
companies to target audience?
7.5 Do you think rural marketing is 68
more challenging than any other
type of marketing?
7.6 Which type of product are sold 69
more in rural market?
7.7 Which external environmental 70
factor affect company more at the
time of marketing strategy?
7.8 Which is the most effective 71
strategy for the promotion of the
product in rural marketing?
7.9 Major issue faced by company in 72
rural marketing?
7.10 Which company started Project 73
Shakti?
7.11 Main Motto of Project Shakti? 74
7.12 Competitor for HUL? 75
7.13 Green Revolution is related to 76
what?
7.14 Which marketing mix used in 77
rural marketing?
7.15 What influence more to customer 78
to buy a particular product in
rural Marketing?
7.16 Which media have a greater 79
effect than the impersonal ones in
the rural marketing context?
7.17 Did you find any product 80
difference which is sold in Rural
Area?
 CHAPTER 1
INTRODUCTION TO RURAL MARKETING
1.1 INTRODUCTION

Rural Marketing in India The concept of rural marketing in Indian 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 behavioural factors operating in the country. The rural
population in India accounts for around 627 million, which is exactly 74.3 percent of the total population. The
rural markets in India bring 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.

(a) the markets for consumer goods that comprise of both durable and non-durable goods, and

(b) the markets 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.

1.2 Concept of Rural Marketing:

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 generates bigger revenues in the country as the rural regions
comprise of the maximum consumers in this country. The rural market in Indian economy generates a lmost
more than half of the country’s income.

1.2.1 Meaning

The term ‘rural marketing’ used to be an umbrella term for the people who dealt with rural people in
one way or other. This term got a separate meaning and importance after the economic revaluati on in Indian
after 1990. So, before venturing into the other aspects of rural marketing let us discuss the development of this
area in different parts which is briefly explained here.

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1.2.2 Definition
Rural marketing can be defined as a function which manages all those activities in asserting,
stimulating and converting the purchasing power of rural people into an effective demand for specific products
and services and thereby achieving the goals of the organisation.

1.3 Evolution in Rural Marketing:

Phase I (Before the 1960s):

Rural marketing referred to marketing of rural products in rural and urban areas and agricultural inputs in rural
markets. It was considered synonymous with ‘agricultural marketing’. Agricultural produces like food grains
and industrial inputs like cotton, sugarcane etc. were the primary products marketed during this period.

The scope of farm mechanization equipment’s (tractors, pump-sets, threshers) and agriculture inputs like
fertilizers, seeds and pesticides was very limited, as the rural economy was in a primitive stage, with traditional
farming methods. The market was totally unorganized.

Phase II (1960s to 1990s)

The ‘green revolution’, during this phase, changed the face of rural India ushering in scientif ic farming
practices. Better irrigation facilities, use of fertilizers, pesticides, high- yield variety seeds, coupled with
application of implements like tractors, power tillers, harvesters, pump sets and sprinklers resulted in growth
of agricultural production, changing the very content of rural markets. During this phase, apart from
conventional ‘agricultural marketing’, a new area – ‘marketing of agricultural inputs’ emerged.

Phase III (1990s Onwards):

During this phase, India’s industrial sector gained in strength and maturity. A new service sector emerged,
signifying the transition of an agricultural society into an industrial one.

Meanwhile, the increased plan outlay of Central and State governments for rural development and
strengthening of local governance (through Panchayati raj institutions) witnessed socio-economic progress. In
addition, the economic reforms further accelerated the process by introducing competition into the markets.
All these factors resulted in the growth of rural markets.

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1.3.1 What is Rural Marketing?
The emergence of rural markets as highly untapped potential emphasizes the need to explore them.
Marketers over the past few decades, with innovative approaches, have attempted to understand and tap rural
markets. Some of their efforts paid off and many markets still an enigma. Rural marketing is an evolving
concept, and as a part of any economy, has untapped potential; marketers have realized the opportunity
recently. Improvement in infrastructure and reach, promise a bright future for those intending to go rural. Rural
consumers are keen on branded goods nowadays, so the market size for products and services seems to have
burgeoned.

The rural population has shown a trend of moving to a state of gradual urbanization in terms of
exposure, habits, lifestyles, and lastly, consumption patterns of goods and services. So, there are dangers on
concentrating more on the rural customers. Reducing the product features in order to lower prices is a
dangerous game to play. Rural buyers like to follow the urban pattern of living. Astonishingly, as per the
census report 2003-04, there are total 638365 villages in India in which nearly 70% of total population resides;
out of them 35 % villages have more than 1000 population.

Rural per capita consumption expenditure grew by 11.5 per cent while the urban expenditure grew by
9.6 per cent. There is a tremendous potential for consumer durables like two-wheelers, small cars, television
sets, refrigerators, air-conditioners and household appliances in rural India.

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Some critical factors in successful rural marketing are:
(1) Understanding rural buyers and sellers and their situations

(2) Reaching remote rural locations for products and services

(3) Communicating with vastly heterogeneous rural audiences spread over the country.

1.4 Needs of Rural Marketing

There are many reasons that have urged the Indian companies to enter the rural India. Some of them
are discussed below:

1. Rapid growth in service industries

2. Rise in demanding consumers: The purchasing power in rural India is on steady rise and it has resulted in
the growth of the rural market

3. Increase of rural literacy: Literacy level among the rural mass is increasing day by day. Rural consumer
can understand the message given by the producers in the advertisements.

4. Increase in rural population: Over the past few years rural India has witnessed an increase in the
population with much more pace than of urban population and as far as total population size in concern rural
population size is more than two times of urban population.

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1.5 Characteristics of Rural Marketing:-

1. More Prospective:
With the initiation of various rural development programmes, there has 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.

2. Size:
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.
Rural market is account for about 74% of total Indian population.

3. Nature:
The social status of the rural regions is precarious (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
impediment (obstacle) in the progression of this sector.

4. Response to Products:
Product-related features of rural segment are:
i. Rural markets (buyers) believe in product utility rather than status and prestige. However, they like novel
products with distinctive features.

ii. Most village customers consider tastes rather than usefulness in long run.

iii. They like simple and long-life products. They are interested in immediate results. Products must offer
immediate benefits.

iv. They respond to those products that suit their religious faith, and social norms and customs.

v. They ask for such products which can assists in their traditional occupations and life style.

vi. They have minimum urge for individuality. They prefer family-used products than personal- used products.

vii. They strongly prefer such products that can change and improve their life-style.

viii. They are less concerned with product services associated with products like after-sales services, guarantee
and warrantee, home delivery, and other similar services. Branding, packaging, and labelling have less
influence compared to urban segments.
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5. Response to Price:
Price-related features of rural segments include:
i. Rural customers are price-sensitive and highly influenced by level of pricing. Price is the strongest factor
that affects their buying decision.

ii. They buy those products which are low in price and medium in quality.

iii. They are easily attracted by price discounts and rebates.

iv. They prefer credit facility. They normally have strong desire to postpone payment for certain period.

v. Some middle class rural customers are attracted by instalment and loan facility.

6. Response to Promotion:
Promotion-related features of rural segment include:
i. Rural customers are highly attracted by local and regional promotional efforts.

ii. Their reference groups consist of educated and non-educated family members and relatives living in urban
areas and foreign countries as well.

iii. Personal selling seems more influential to convince rural mass.

iv. They are attracted by such sales promotional tools or articles which are useful in their routine life such as
knife, gas lighter, rings, key-chains, caps, photos of local actors, calendars and cards with religious impression,
etc.

v. They have a strong faith on local religious and spiritual leaders. Such leaders are among the most influential
reference groups.

vi. Publicity efforts related to local vocational and agricultural activities can im press them.

vii. They can be appealed by visual or pictorial advertisements published in local and regional languages.

7. Response to Distribution:
Distribution-related features of rural segment include:
i. Normally, they buy from familiar retailers and salesmen. They are hesitant to buy from big shopping malls
or departmental stores. However, situation is changing gradually.

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ii. Rural customers strongly favour relations. They continue buying from known and established retailers who
maintain close family relations with them.

iii. Mostly they buy from retail outlets situated in rural or sub-urban areas. However, some rural customers
like to buy products from nearby cities also.

iv. Normally they place frequent orders of small in size. They lack storage facilities.

v. They are not interested in home-delivery. They want immediate possession. They lack patience. They are
found eager to possess and use the products immediately.

vi. Caste, religion, political party, relations, etc., play important role in selecting the retailers.

vii. Online and direct marketing are not much popular in rural areas. Sometimes, a few of them are interested
in network marketing.

8. Predictability:
Unlike urban markets, the rural markets are difficult to predict, and possess special characteristics. The
featured population is predominantly illiterate, have low and irregular income, lack of monthly income, and
flow of income fluctuating with the monsoon winds. They don’t have a stable pattern of reacting due to income
factors.

9. Role of Government:
Demand of products depends on availability of basic facilities like electricity, transportation, schools,
hospitals, etc. 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. Rural market depends on government’s contribution to the
rural sector.

10. Rigidity:
Most rural customers are illiterate, backward, and orthodox. It is very difficult to convince them to buy the
products. They believe in the present and lack ambitions.

11. High Level of Heterogeneity:

We find different types of buyers in rural areas. Some are simple, while some are sophisticated; some are
extreme rich, while some are extreme poor; some are highly educated, while some are complete illiterate;
some are dynamic and modern, while some are very rigid and orthodox; some believe in quality and status,
while some believe in availability and price.
Page 7
Rural customers are gradually transforming into urban, metropolitan, and even cosmopolitan customers.
Improved education, rapid means of transportation, access to advance communication, raised living standards,
craze to follow modern (even ultramodern) life pattern, and many similar factors have drastically changed
rural consumer behaviour. The gap between urban and rural segments tends to be notably narrow. Sometimes,
rural and urban customers exhibit no difference at all.

1.5.1 Importance of Rural Marketing:-

1. Reduced Burden on Urban Population:

Rural marketing can contribute to rural infrastructure and prosperity. People can also live comfortably in
villages due to availability of all goods and services in villages, even comparatively at low price. People, due
to growth of marketing activities, can earn their livelihood in rural places. Population pressure on urban can
be reduced.

2. Rapid Economic Growth:

Naturally, marketing acts as catalyst agent for economic growth. There exists more attractive business
opportunities in rural than urban. Rural market is more potential for consumer durables and services. Rural
population largely depends on agriculture and it can contribute nearly 50% to total national income.
Agriculture enjoys significant portion in export business, too. Rural marketing improves agricultural sector
and improved agricultural sector can boost whole economy of the country.

3. Employment Generation:
At present, nearly 70% of total Indian population feeds on agricultural activities in rural areas. Rural marketing
can generate more attractive employment opportunities to rural and urban people. Growth of rural marketing
leads to increased business operations, professional activities, and services that can generate a lot of
employment opportunities.

4. Improved Living Standard:

Due to rural marketing system, rural buyers can easily access needed standard goods and services at fair prices.
In the same way, rural marketing improves rural infrastructure. Additionally, rural marketing can also improve
their income. These all aspects can directly improve living standard.

5. Development of Agro-based Industries:

Rural marketing leads to set up agro-based processing industries. Fruits, vegetables, cereals, pulses, etc., are
used as raw-materials. Such industries can improve farmers’ profit margin and employment opportunities.

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6. Optimum Utilization of Rural Untapped Resources:
There are unlimited businesses opportunities exist in rural areas. Untapped and underutilized resources can be
utilized at optimum level and that can further accelerate overall economic growth.

7. Easy Marketability of Agricultural Produces:

Growth of rural marketing improves whole marketing system. Multiple options are available to farmers and
local producers to market their products. Big domestic corporate houses and multinational companies prefer
to buy agricultural products directly from villages by their own or through agents and small firms. Rural
producers can sell their produces easily at satisfactory prices. Their improved income level can improve their
purchasing power that can further fuel to industrial demand.

8. Improved Rural Infrastructures:

Rural marketing and basic infrastructures go hand to hand. Growth of rural marketing leads to improved
transportation, insurance, banking, communication, entertainment, and other facilities. Due to availability of
basic infrastructural facilities, business units can easily reach the target rural buyers.

9. Price Stability:
Marketing results into better transportation, warehouses, and communication facilities. Agricultural products
can be systematically marketed throughout the year. Huge gap between demand and supply can be avoided
and, as a result, prices of most of commodities remain more or less stable.

10. Quality of Life and Reduced Crime:

Marketing can refine entire living style and system. Better quality products at reasonable pri ce, improved
income level, availability of facilities, etc., have direct positive impacts on quality of life. Quality of life
improves and level crime reduces.

11. Balanced Industrial Growth:

The gap between rural and urban development can be reduced gradually. Rural development improves rural
life and reduces pressure on urban life.

Page 9
1.5.2 Types of Rural Marketing

Following are the different types of rural marketing in India:-

• Periodic Markets
The periodic market is one of the important features of rural marketing in India. Despite
urbanization and the growth of retail outlets, periodic markets are also essential for rural people’s
rural economy and social life. Periodic marketing work is done by two institutions, fairs and
weekly markets.

• Mobile Traders
There is another important agency known as mobile traders to meet the limited needs of rural
consumers like vegetables, fruits, clothes, utensils, cosmetics, spices, toiletries etc. Mobile traders
move from one place to another, from one house to another, to sell items that the rural peoples
often need.

• Permanent Retail Shops

With the increase in the population of villages, improvement in their income, demand for goods,
and daily development of permanent retail outlets take place. Traditional fairs, weekly markets, or
peddlers could not satisfy the situation, which led to the rise and development of permanent
shops.

Page 10
 CHAPTER 2
RESEARCH METHODOLOGY

2.1 INTRODUCTION

Research methodology is the specific procedures or techniques used to identify, select, process, and analysed
information about a topic. In a research paper, the methodology section allows the reader to critically evaluate
a study’s overall validity and reliability. The methodology section answers two main questions: How was the
data collected or generated? How was it analysed ? The researchers used an exploratory research technique
based on past literature from respective journals, annual report, newspaper & magazine covering wide
collection of academic literature on RURAL MARKETING:- EMERGING TRENDS AND STRATEGIES
according to the objective of the study the research design is of the descriptive in nature. Available seconda ry
data was extensively used for the study.

2.2 PROBLEM STATEMENT

A STUDY ON RURAL MARKETING:- EMERGING TRENDS AND STRATEGIES.

2.3 TYPES OF RESEARCH METHODOLOGY

A. Descriptive - By the term descriptive research, we mean a type of conclusive research st udy which is
concerned with describing the characteristics of a particular individual or group. It includes research related
to specific predictions, features or functions of person or group, the narration of facts, etc. It concentrates on
formulating the research objective, designing methods for the collection of data, selection of the sample, data
collection, processing, and analysis, reporting the results.

B. Exploratory - Exploratory research means a research conducted for formulating a problem for more clear
investigation. It focuses on the discovery of ideas and thoughts. The exploratory research design is suitable
for studies which are flexible enough to provide an opportunity for considering all the aspects of the problem.

2.4 SAMPLING DESIGN

a) Sample area – It means the area in which the research is been conducted and the area for this research is
Western Mumbai.

b) Sample size – It is the total number of people targeted to collect data for research and the size of this study
is 89 respondents.
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c) Sample period– It is the total time required to conduct the study. The above research is been conducted in
duration of one months.

d) Sample technique – It is the technique used by the researcher to conduct research. This study is based on
non-probability technique and convenience technique.

2.5 DATA COLLECTION

The data for this study has been collected through both primary and secondary sources. The primary data has
been collected through a questionnaire with a sample size of 89 respondents using google forms. The
secondary data is information gathered from previously conducted study. The secondary data for this study
has been collected through different websites, books, newspapers and articles.

2.6 OBJECTIVES OF THE STUDY

The present study mainly attempts to examine the following issues:

1. To examine the current rural marketing scenario.

2. To identify rural marketing opportunities.

3. To examine the challenges facing the marketers.

4. To understand strategies implemented in rural marketing by selected cases.

5.To understand the innovation undertaken by marketers towards rural marketing.

2.7 LIMITATIONS OF THE STUDY

Following are the limitations of the study
a) The study is based on primary data. For the finding of this study it is assumed that respondents may have
given correct and unbiased data.

b) The study was conducted based on 100 respondents due to limited time.

c) The area of the is limited that is it covers South Mumbai only.

d) The study relies on the information gathered from questionnaire and observations, which may subject to
biasness.

Page 12
 REVIEW OF LITERATURE

Kumar,2011
The rural market is growing at 25 percent whereas urban market is growing only at 7 to 10 percent.

Bijapurkar,2007

Rural India has three times as many people as urban India – 810 million as compared to 280 million in urban
India. Therefore, the rural market is larger than the urban market, in many categories.

Gupta,2009

There is a substantial shift of the focus of the marketers from the urban markets to the rural ones. Nearly 70%
of the population of India lives in rural areas and rural assets accounts for more than 50% of t he tangible
wealth of the country providing a big scope to the firms to tap this market.

Pawan Kumar & Neha Dangi, 2013

India give an insight into the phases of rural marketing in the years before 1960s, 1960 to 1990 and after
mid1990s,including how rural marketing was known as agricultural marketing, then the green revolution took
place, and how eventually rural marketing was known differently from agricultural marketing. Rural market
as a whole in India’s going through changes in the current times, our population lives in its villages
and towns. We got to understand what is that the rural India buys is small units but of good quality.
Companies though unsure to tap into this potential of rural marketing have come to know that it is an area of
profitable growth as the consumption by the rural consumers is changing. The opportunity which rural India
provides to business platforms is because of the current where the rural consumer is aware because of the
increasing numbers of internet users. The challenges faced while trying to penetrate the rural market is
transporting the products to these remote areas, secondly about underdeveloped areas and thirdly because
the storage of production.

Vaswani, Aithal, & Pradhan, 2005

multinationals rushed into the rural market for tapping into these consumers their growth and efforts
did not bring the desired results. There is a huge gap between the rural and the urban economies and the
understanding of the term rural itself is conceptualised differently , and this lack of understanding needs to
developed such that the rural urban links are developed strategically , when it comes to India and its
rural produces, they need to be encouraged and expanded.

Page 13
Shrama, 2013
The research paper gives an insight into the reasons of the growth of rural markets and why we should actually
think of rural markets as a potential area of growth, these reasons are large number of consumers,
awareness among rural consumers, rising literacy levels, developing infrastructure. Marketers while catering
to rural markets should strategically plan their mode of communication which can be understood by
the consumer and in these regional languages play a significant role
Rani & Shrivastav, 2014
In the study the researchers it is found that when communicating with the consumers of the rural segment
we need to generate awareness and demonstrate to them for their better understanding. For resolving the
transportation distribution challenges companies need to make vans as a medium of transportation, and need
sales people willing to work in areas which are remote for better penetration.

Shah & Desai, 2013

The 4As of rural marketing are of significant importance to any corporation who wants to enter the
lives of a rural consumer and understanding these plays a vital role in that, HUL was amongst the first
MNCs to realise this potential. The products should be affordable such that the rural consumers with
their incomes can afford these and these products do not become highly expensive for them. The project
'Shakti' by HUL has been one of the most successful distribution models in rural marketing with the help
of Self Help Group. Acceptability of the product in rural market is important hence any organisation when
trying to sell its goods and services need to offer products which will be accepted by these consumers and they
are attracted to such as mobile companies customising products for rural consumers, LGs Sampoorna TV.
Awareness among the rural population is crucial for making the consumer aware about the products and
services they provide, Coca Cola uses the combination of Television and radio to reach a rural household.
Gulati & Swati, 2013
the rural community and its buying pattern has definitely changed from the time of the green revolution, the
rural market is huge and due to this scattered large available areas it brings along with it great number
of opportunities. In the rural consumers have developed their perspective on the products and services
provided to them and are highly aware because of the communication channel of television.

Talwar, Popli, & Gupta, 2014

The rural market in India is similar in behaviour and sociological factors of the nation we live in the status
of rural marketing has been changing as the population of rural consumers is shifting from low literacy
rates because of which they were less aware of brands , now the people are more aware of these brands
and expect value for their money, also the income of these households is expected to increase along with
developing infrastructure.

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4.1 Introduction to Rural India
Rural India

Rural India is home to 70% of the nation's population. The rural population resides mainly in villages
the 2011 census reports roughly 800 million people living in more than 600,000 villages.

In general, a rural area or a countryside is a geographic area that is located outside towns and cities.

All population, housing, and territory not included within an urban area. Whatever is not urban is
considered rural." Typical rural areas have a low population density and small settlements. Agricultural areas
and areas with forestry typically are described as rural. Different countries have varying definitions of rural for
statistical and administrative purposes. Rural areas, because of their unique economic and social dynami cs,
and relationship to land-based industry such as agriculture, forestry and resource extraction, the economics are
very different from cities and can be subject to boom and bust cycles and vulnerability to extreme weather or
natural disasters, such as droughts. These dynamics alongside larger economic forces encouraging
to urbanization have leads to significant demographic declines, called rural flight, where economic incentives
encourage younger populations to go to cities for education and access to jobs leaving older, less educated and
less wealthy populations in the rural areas. Slower economic development results in poorer services like
healthcare and education and rural infrastructure. This cycle of poverty in some rural areas, means that three
quarters of the global population in poverty live in rural areas according t o the Food and Agricultural
Organization.

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 Some communities have successfully encouraged economic development in rural areas, with some
policies such as giving increased access to electricity or internet, proving very successful on encouraging
economic activities in rural areas. Historically development policies have focused on larger extractive
industries, such as mining and forestry. However, recent approaches more focused on sustainable
development are more aware of economic diversification in these communities.

Rural areas are also known as the 'countryside' or a 'village' in India. It has a very low population
density. In rural areas, agriculture is the chief source of livelihood along with fishing, cottage
industries, pottery etc.

The quest to discover the real rural India still continues in great earnest. Almost every economic agency
today has a definition of rural India. Here are a few definitions: According to the Planning Commission, a
town with a maximum population of 15,000 is considered rural in nature. In these areas the panchayat makes
all the decisions. There are five people in the panchayat. The National Sample Survey Organization (NSSO)
defines ‘rural’ as follows:

• An area with a population density of up to 400 per square kilometer.

• Villages with clear surveyed boundaries but no municipal board,
• A minimum of 75% of male working population involved in agriculture and allied activities.

RBI defines rural areas as those areas with a population of less than 49,000.

It is generally said that the rural areas house up to 70% of India's population. Rural India contributes a
large chunk to India's GDP by way of agriculture, self-employment, services, construction etc. As per a strict
measure used by the National Sample Survey in its 63rd round, called monthly per capita expenditure, rural
expenditure accounts for 55% of total national monthly expenditure. The rural population currently accounts
for one-third of the total Indian FMCG sales.

4.1.1 Reasons for increase in the Importance of rural Market

1. Cut Throat Competition in Urban Markets:

Now-a-days people say that there is lot of competition in the market. Actually it is not only lot of competition
but cut throat competition, especially in the urban areas. Companies are playing on the basis of price. Every
big company is trying to swallow the small and new companies. Prices are going down steeply just because of
the tough competition.
Apart from the price factor, companies have started increasing product features and added value to their
products to compete in the market, without increasing the prices. The concept is increase the utility and value

Page 16
and decreases the prices. Irrespective of the above facts, there are certain products which have already achieved
the maturity level or have reached the saturation level. Demand is not increasing in these sectors so the best
strategy is to explore new markets for the products. So rural marketing is turning out to be a market for the
packaged products with a minimum or no competition. Firms can generate demand and increase profits.

2. Socioeconomic Changes:
Today a revolution has come in the rural areas which in turn have brought a change in the socio-economic
conditions. This is basically in terms of increase in the productivity of the agriculture. Most of the income of
people residing in rural areas comes from agriculture. Due to the adoption of the latest technology the yield
per acre or animal has increased considerably.
One of the major reasons behind these changes is the Government Policies to uplift the agriculture and remote
areas, and the opening of the cooperatives in some major belts of India. Because of adoption of latest
technology, production has increased which has resulted in the increase in income of farmers. Due to increase
in income the rural customer also wants to be in the same frame as the urban customer.
Urge for increasing income and better standard of living by the rural customers has motivated the companies
to go and spread their business activities in these areas. Some fertilizer companies have started adopting
villages for increase in their production. Some companies have taken it as a social cause for the upliftment of
remote areas. Integrated rural development programs encompass health, education, latest technology farming
products sales, development of industry etc.
Another reason for this change is the media which has reached in the rural areas. Specially Television has
brought a revolution in this area. Today we have so many regional channels. Customer can be made aware of
the latest products, their utility, new brands, etc. With the increased income and aspiration for standard of
living, with this kind of awareness provided by the media, the companies are motivated to go and take charge
of the rural areas.

3. Scope and Size of Rural Market:

Today the size and scope of rural market is increasing at a very fast pace. A major part of Indian population
lives in the rural areas which are now turning as a new market. Now the rural market is not limited to the sale
of fertilizers and pesticides but it is going beyond that with the increase in the income and the aspiration level.
Urge for good standard of living has opened the rural market as an opportunity for the companies to come and
grab the market. Now in rural areas also there is a demand for TV, Cars, Shampoo, packaged goods etc.

4. Occupation:
Most of the rural customers are engaged in farming, trading, poultry work, plumbing, electric works, dairy,
etc. We have different varieties of the occupation in the rural areas. In rural areas also big farmers usually
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possess almost everything like TV, fridge, furniture, and other home appliances etc. of the major brand. Small
farmers have scarcity of resources and funds etc. so there is no question of possessing almost any branded
products, specially costly products.

5. Reference Groups:
In rural areas there are totally different reference groups. Any person who is having a say in their area, a respect
in the society and a place in the hearts of the residents form a reference group. Higher the profile and
requirement of these people in the society, higher will be their influence on them. They are basically health
workers, doctors, teachers, panchayat members, local bodies, samiti members, bank managers etc.

6. Media Types:
Now-a-days televisions, presentations, display, radio etc. has taken the place of old traditional folk
programmes like ‘Nautanki’. Because of the literacy rate being so low, print media is not so effective.

4.1.2 Opportunities In Rural Marketing

1. Broad Base Of Customers:

Today, the rural market is a vast area with around 895 million people in over 664,000 villages. It
is estimated that this population will increase by 1.7% by 2022.

2. Internet & Mobile Phone Usage Increased –

Currently, about 227 million rural people use the Internet, compared to about 205 million people in
urban areas. However, this figure is projected to increase by a decent percentage in the coming few
years.

3. Employment Opportunities Are Increasing –

Rural development has led to financial development in rural areas due to government initiatives
over the years. It also has increased the employment opportunities for the rural residents, and thus
the income level has increased.

4. Improve Literacy Rate:

In this new generation, the rural peoples are more aware of education. They understand the
importance of education and try to encourage it. Because of them, older people are also mindful of
the importance of education.
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4.2 Challenges in rural marketing:-

The rural market offers a vast untapped potential; it should also be recognized that it is not that easy to operate
in rural market because of several problems. Today, the extreme challenge for the rural marketer is to reach
out to the most remote rural destinations and increase rural incomes. About 750 million Indians reside in about
6 lakhs villages and even the powerful marketers like HUL and ITC have recently been able to cover only
about 2 to 2.5 lakhs villages while about 1 to 1.5 lakhs villages have been connected through Project Shakti
and E-Chaupal initiatives. Rural marketing is thus a time consuming affair and requires considerable
investments in terms of evolving appropriate strategies with a view to tackle the problems. A lot need to be
done for expanding distribution coverage and the daunting task ahead is to overcome the following challenges

1. Poor infrastructure:

Most of the villages are suffering from the inadequate infrastructure facilities like warehousing,
transportation, pucca roads and financial facilities. Although on paper approximately 90 percent of the
villages appear electrified but in reality only one-third of the rural households have electricity connections.
Only 12 percent of villages are connected with railway network and only 33 percent villages have the pucca
road. Nearly 50 percent of the villages in the country do not have all weather roads. Physical communication
to these villages is highly expensive. Even today, most villages in eastern part of the country are inaccessible
during monsoon season. Planning physical distribution, managing distribution and controlling marketing
communication are major impediments for entering rural markets.

2. Underdeveloped people and markets:

The agricultural technology has tried to develop the people and market in rural areas. Unfortunately, the
impact of the technology is not felt uniformly throughout the country. Some districts in Punjab, Haryana
or Western Uttar Pradesh where rural consumer is somewhat comparable to his urban counterpart, there
are large areas and groups of people who have remained beyond the technological. breakthrough. In
addition, the farmers with small agricultural land holdings have also been unable to take advantage of the
new technology.

3. Non-availability of shops:

In India, approximately 30 percent villages have no regular shops; leave alone the proper distribution
setup. According to Indian Market Research Bureau (IMRB) approximately 60,000 villages do not have
even a single retail outlet. Even the outlet density is low in rural India compared to urban India. To make
matter worse, most of the villages don’t have the proper connectivity with roads due to harass terrain.
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4. Poor literacy level:

As per the census of 2001, rural literacy level is 59.4 percent as compare to the urban literacy rate which
is 80.3 percent. Low education level leads to lack of awareness and herd mental ity because of which
villagers are not able to find the difference between the products of good and bad quality. It is because of
this so many spurious brands are flourishing in the rural area with somewhat similar names and packaging
than that of branded companies. It is virtually impossible for a marketer to track all these spurious brands
and initiate any legal procedure. The only way for fighting against these evils is to increase the level of
education in the rural areas and by increasing the awareness about the benefits of good quality products.

5. Poor media penetration:

Only 57 percent of rural households have any type of mass media connections. Of these, 23 percent have
access to print media and 36 percent are the viewers of televisions. With about 2 lakhs haats (periodic
markets) in India, the greatest challenge before a marketer is the cost per contact. The cost of reaching to
the customers sitting or located in rural and remote areas requires a lot of investment especially in case of
unconventional modes. There is also limitation in establishing an exposure and point of purchase in rural
market.

6. Seasonal demand:

As agriculture happens to be the main occupation in rural India, demands for goods depend on the
monsoons heavily. Therefore, the buying capacity is not stable or regular as comparison to the urban
market.

7. Market organization & staff:

The size of the market organization and staff is very important, to manage market system effective control.
However, the existing organizational setup particularly at district and block level needs to be strengthened
in order to make the services on various aspects available to the farmers timely and also easily accessible
to them.

8. Many languages and dialects:

The number of languages and dialects vary from state to state and region to region. This type of distribution
of population warrants appropriate strategies to decide the extent of coverage of rural market

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 9. Dispersed population, customs and traditions: Population density in rural areas is much lower as
compared to that in urban areas. It is therefore becomes more challenging to reach out a large number of
people at an affordable cost. At the same time people do not adapt to new practices as life in rural areas is
based very strongly on tradition and customs.

10. Barter system: In the developing country like India, even today the barter system i.e., exchange of goods
for goods exists. This is a major obstacle in the way of development of rural marketing.

11. Other influencing factors:

Natural calamities, market conditions (demand, supply and price), pests and diseases, drought or too much
rains, primitive methods of cultivation, lack of proper storage facilities which exposes grain to rain and rats,
grading, transport, market intelligence (up to date market prices to villagers), long chain of middlemen (large
number of intermediaries between cultivator and consumer, wholesalers and retailers), fundamental practices
(market dealers and commission agents) get good part of sale of receipts.

12. Underdeveloped Banking Facilities:

Banking facilities and services in the rural areas are not up to the mark they are not meeting the requirement
of rural masses. Further, only public sector banks are extending their banking services in the rural ar eas,
because of this rural merchants are not getting adequate loans, mortgage, insurance and other services form
banking sector. Further, the rural marketers are not utilizing cash less transactions, electronic banking and e -
payment facilities. As a results, they are unable to transact with urban entrepreneurs and marketers.

13.Increased Logistics and Transportation Cost:

Indian rural markets are spared unevenly they are far away from semi urban and metropolitan cities. Buying
the goods from the rural markets and transporting it to urban markets will incurs much cost than its very
production. Majority of villages have kaccha roads and they are away from the national highways in this
scenario, the cost of the product will become double when it reaches the urban market.

14.Poor Planning and Market Research:

The concept of planning was almost absent in the rural markets, due to lack of marketing information
facilities. Rural producers fail to produce to the goods as per the demand because of the above reason.
Further, they will not search for markets, customers and consumers for their products and services. Due to
which in spite of the quality and low price of rural products they were not able to market them and initiate
marketing activities in the rural areas.
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4.3 4 A’s in Rural marketing:-

Whenever a company plans to enter the rural markets, it has to restructure its marketing strategies to suit the
needs and requirements of rural consumers. Since they are mostly illiterate and belong to a low-income
group.

Following are the various components of 4 A, described in the context of rural marketing:

1. Awareness:

Mass media is able to reach only to 57% of the rural population. Creating awareness then, means utilizing
targeted, unconventional media including ambient media. For generating awareness, events like fairs and
festivals, Hats, etc., are used as occasions for brand communication. Cinema vans, shop-fronts, walls and wells
are other media vehicles that have been utilized to increase brand and pack visibility.

Innovative media used by personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel .
Idea was to advertise not only at the point of purchase but also at the time of consumption. Hindustan Lever
relies heavily on its own company organized media. These are promotional events organized by stockiest.

Page 22
 Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio
to reachthe local people in their language. Creating brand awareness through appropriate media is very
important for the companies to gain acceptability among rural folks.

2.Affordability:-

Since rural consumers have low disposable incomes, products must be such that can be afforded by rural
consumers. The problem of affordability has been addressed by few companies though introduction of small
unit packs.

Hindustan Lever, among the first MNCs to realize the potential of India's rural market, has launched a
variant of its largest selling soap brand, Lifebuoy at Rs 10 for 50 gm. The move is mainly targeted at the rural
market. HUL’s initiated ‘operation Bharat’ to tap rural markets by bringing out low priced sample packets of
its toothpaste, Fairness cream, shampoo, other products.

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3.Availability:

For making the products available to consumers, companies adopt a variety of means such as direct selling,
using company delivery vans, syndicated distribution between non-competitive marketers, setting up of
temporary stalls in rural melas or health etc. In the rural areas with places far flung and well connected with
proper roads, delivering the product to the rural consumers can be a challenge. Companies have realized this
and are trying to be creative in this situation.

The company, BPCL initiated specially designed ‘Rural Marketing Vehicle’ which moved from
villages to villages for filling cylinders on spot. HUL started Project “SHAKTI” in partnership with Self Help
groups of rural women. The project ‘Shakti’ with a social aim of upliftment of rural women by providing
income-generating opportunities was intended to amplify the company’s rural distribution network. HUL’s
Shakti project connects Self Help Groups (SHGs) with business opportunities. The company promotes and
uses the SHGs network present in the villages for increasing its sales in the rural areas. The SHGs are presented
chance to become company’s local small-scale distributor in the rural areas. These groups typically comprise
of 15 to 20 people. They buy a small stock of items like soap, detergents or shampoos and sell directly to
consumers in their homes. This innovative distribution model is a win-win for the company and the village
SHGs.

Page 24
4.Acceptability:

Another challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products
that suit the rural market.

One company, which has reaped rich dividends by doing so, is LG Electronics. In 1998, it developed
a customized TV for the rural market and christened it “Sampoorna” Because of the lack of electricity and
refrigerators in the rural areas, Coca-Cola provides low-cost ice-boxes - a tin box for new outlets and thermocol
box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have
performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total
premium. The company tied up with nongovernmental organisations and offered reasonably priced policies in
the nature of group insurance covers. Mobile device companies are also tailoring their products to the rural
marketers. For instance, Nokia had earlier launched s basic handset with a torch and an alarm clock. In
December2008, the company launched Nokia Life Tools, which is a range of agriculture, education and
entertainment services designed especially for consumers in small towns and rural areas of emerging markets.
The product is meant to provide timely and relevant information customized to the user’s location and personal
preference directly on their mobile services.

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4.4 Difference between Rural marketing And Urban marketing

Aspects Rural Marketing Urban Marketing

1. Meaning 1. The rural markets are small 1. The urban markets are a large
contagious settlement units of contiguous settlement of towns or
villages far from cities. urban agglomerations.
2. Definition 2. The Rural Marketing refers to 2. Urban marketing would be any
the activities undertaken by the marketing strategy that best reaches
marketers to encourage the an urban population, such as those
people, living in rural areas to people who reside in large cities or
convert their purchasing power towns. The urban population is
into an effective demand for the typically more dense and
goods and services and making concentrated, with a lot of products
these available in the rural areas, and brands to choose from as well as
with the intention to improve their increased exposure to marketing
standard of living and achieving messages.
the company’s objective, as a
whole.
3. Marketing mix 3. 4’Ps of marketing mix is 3. 7’Ps of marketing mix is needed to
needed to meet the customers meet the customers current and
current and future expectation. future expectation.
4. Marketing segmentation 4. Demographic and geographic 4. psychographic (lifestyle,
basis are helpful. personality, culture, etc.) and usage
based basis
5. marketing Research 5. Need simple interactive method 5. Sophisticated marketing research
like; discussion, interview, methods, internet, television channel
observation, etc. are helpful. and mobile SMS etc. are being used.
6. Technology 6. primarily appropriate 6. latest technology to create
technologies for rural innovation luxurious products and services to
which overcome the rural problem simplify home and work life. Also
such as: shortage of transport, aiming at health, recreational,
poor dissembling water facility, entertainment services.
power failure etc.
7. Development strategy 7. partnering with government 7. Limited to corporate social
agencies, NGO’s and private responsibility centres (philanthropy
organisations. to cause marketing)

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4.5 Rural Marketing Environment

Rural marketing environment means all those factors like demographic – Physical, Economic, Social
etc. which affect the rural marketing. When marketing activities are done in the rural areas, it is necessary to
know the conditions of rural markets in terms of environment which is ever changing. Rural marketing requires
an understanding of the rural environment in which companies have to operate to deliver product and services.
The rural marketing environment is complex and is changing continuously. Rural marketing is affected by the
dynamism and uncertainty of the environment within which it functions.
Therefore, it is essential to understand the rural marketing environment elements in detail to meet out
the challenges and explore all the opportunities provided by the rural markets.
Definition According to E.J. Ross,

“Environment is an external force which influences us.”

The following are the features of rural marketing environment:

1. Affected by External Factors –
Main feature of rural marketing environment is that it is greatly affected by external factors like demographic,
Economical , political, socio culture etc. It is necessary to study these external factors from the point of view
of rural markets because these factors are different in rural markets as compared to urban markets.

2. Flexibility –
Rural marketing environment is not static or rigid. It is highly dynamic and keep changing as compared to last
few decades. Rural markets have shown a greater change now a days in terms of various factors like income,
birth rate, housing pattern etc.

Page 27
3. Complexity –

Another feature of rural marketing environment is complexity. There is not only one or two factor which affect
rural markets but there are various factors. So, it is not easy to study all factors and hence, it is complex in
nature.

4. Relativity –

Impact of rural marketing environment may differ from company to company or country to country. Some
environmental factors may affect some company a lot while these factors may have less effect on other
company.

5. Uncertainty –

It is very difficult to predict the changes of marketing environment. As environment is changing very f ast. For
example, rural markets have great change in term of IT, fashion revolution etc.

4.5.1 The importance of studying rural marketing environment is as follows:

1. To Study the Developments and Complexities of Rural Environment:

Complexities of environment refer to those factors which influence the business. These factors affect the
business in different ways. Marketing environment is studied for measuring these complexities because in
environment, changes occurs regularly like change in interest of consumers, income profile of rural consumers,
size, qualities, availability of goods, occupation etc.

2.To Make Company Policy:

In order to prepare the company policy, it is responsibility of marketing manager to change the company’s
policy along with change in environment. Company’s policy will be different in rural markets as compared to
urban markets. Moreover, he should make timely changes in these policies and strategies according to changes
occurring in the environment. Success of any business depend on the fact that how fast it can make changes
in the policies and strategies on the basis of change in environment.

3. Help in Taking Various Marketing Decision:

A marketing manager has to take various decisions regarding marketing at different times. Appropr iate
decisions can be taken only if marketing manager has integrated knowledge of marketing environment. On the
basis of these decisions, he can establish proper coordination among marketing departments.

Page 28
Understanding of rural marketing environment help in taking various marketing decisions like product
decision, price decision, demand estimate decision etc. Demographic, socio cultural, economic factors in rural
areas help in preparing marketing plan for the marketer.

4. To Recognize New Market Opportunities:

Opportunities are the favourable situations of the business. If a marketing manager has adequate strength, then
he can take benefit of these opportunities. Through environment analysis, timely knowledge of available
opportunities for business is received.

Thus, marketing manager can take benefit of these opportunities by making plans in suitable time period.
Marketing opportunity is an area of buyer need or potential interests in which a company can perform
profitably. Opportunities can be in many forms and marketers must have an ability of spotting them. For this,
it is necessary to study rural marketing environment to tap the potential of rural markets.

5. To Understand Rural Market Conditions:

A marketing manager has to sell his product in the market for which he should have knowledge about the
customers, competitive units, suppliers, etc. Information about market conditions like change in demand and
supply of goods, fashion, taste, competition, boom, recession in market, etc. is beneficial for the business. A
marketing manager gets all this information through the study of marketing environment.

6. Helpful in Providing Information Regarding Threats:

Threats refer to adverse situations which increase the risk of business. This risk can be due to technical
changes, increase in competition, change in fashion, economic changes and lack of material. Thus knowledge
of marketing environment is necessary for getting the timely information regarding problems, challenges and
possible threats of marketing

7. Helpful in Facing the Competition and to Get Information Regarding New Challenges and Problems:
Study of marketing environment is necessary for keeping the products of the organization in existence for long
period. For this, marketing manager has to regularly study the products of competitive units, their cost,
marketing strategies, promotion plans, etc. A marketer can get the information about new challenges and
problems with the help of marketing environment.

8. Importance in Studying Rural Consumer Behaviour:

Rural consumers are very different from urban consumers in terms of thinking, lifestyle, culture, behaviour
etc. Consumer decisions and actions of rural consumers can be properly comprehend only when the factors in
which they are operating is understood.

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9. To Protect Themselves from the Effect of External Factors:

External factors like, economic, demographic, socio-cultural etc., keeps changing. These factors are
uncontrollable and their effect is unbearable. These factors provide threat as well as opportunities. So, in order
to protect themselves and to exploit opportunities, it is important for the marketers to study these external
environment factors.

Environmental factor:- Internal and External Environment.

Organizational environment means the forces (commonly known as opportunities and threats) which can make
an impact on organizational activities. Organizations do not exist in isolation. It works with the overall
environment.

These environmental factors are majorly divided into two parts like internal and external:

(i) Internal Environment:

It refers to those elements which influence the internal activities of an organization such as – Money, Material,
Machine and Labour.
(ii) External Environment:
It refers to those elements which influence the outside activities of an organization like – Demographic,
Physical, Socio-Cultural, Technological, Political and Legal influences.
So, an organization has its own internal strength and weaknesses as well as common external opportunities
and threats. They have to play effectively to convert their hurdles into suitable aid which can be controlled by
organization’s activity.

Rural Marketing Environment means the opportunities and threats available in front of the marketers
while promoting their sales very particularly in the rural areas. If the marketers are concentrating both in rural
as well as urban markets, they can mutually tackle rural and urban environmental threats in a positive manner.
For example, while paying tax, Government is giving tax benefits or sometimes tax holidays (i.e., exempted
to pay tax) to the corporate that are starting their production unit in rural areas.
This is just because to improve rural employment opportunities, their income and overall rural
prosperity. If a manufacturer constructs or shifts their production place to rural area, he/she can avail the tax
benefit. In this way, one of the major environmental threats (i.e., liability to pay huge corporate tax) can be
overcome and will reflect in the reduced production cost. At the same time, rural environmental threat such as
– low literacy level, reach of media, etc., can be tackled by targeting urban consumers. In real situation, it is
very difficult to conduct Strength, Weaknesses, Opportunities and Threats (SWOT) analysis in this
environment because of the frequent occurrences of changes. Marketers, who are ready to take effective steps
to change their marketing plans and strategies, will prosper in this changing environment.
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Rural Marketing Environment Structures:-
Rural marketing structure includes the various types of environments which are very important and to be
understood by the marketers who want to sell their products in the rural areas.

Demographic Environment:
Growing population is not a sign for growing market unless they have considerable purchasing power.
Generally, people between the age group of 15-35 are the largest consumption group for many goods. More
particularly, consumers who falls in the age group of 20-35, accounts almost 25% of India’s total consumption.
If the corporate gear up their marketing policies to attract the people below the age group of 35, they can easily
tap nearly 70% of rural potential.

Education and Literacy Level of Rural Women and Youth:

Fortunately, here also, the change is taking place and the rural literacy rate is risen nearly 25% over
the last two decades. The improved literacy rate naturally leads to the growth of demand for education oriented
products like – pen, pencil, notebooks and electronic goods such as – digital diaries, calculators, etc. It also
increases the rural employment opportunities, disposable income and finally rural purchasing power for
several products in the sectors of consumer durables as well as FMCG. So, the growth in rural literacy level,
results in noticeable change for the improvement of rural people’s socio-economic status.
Although the Central and State Governments have implemented many schemes, severe punishments
etc., to stop childhood marriage, keep away from education to girls, killing female child at the stage of birth
itself, etc., unfortunately, these customs are still exist in many states of India such as – Bihar, Haryana,
Rajasthan, Tamil Nadu, Uttar Pradesh and so on. These are all just because of higher illiteracy level among
rural people and particularly lack of literacy level among rural women.
But the rural youth education and literacy level shows a good progress and prosperous rural India.
Here, the contribution given by both State and Central Governments to improve rural youth literacy rate is
noticeable one. This growth in youth literacy level increases the demand for modern, fashionable, current trend
products among the younger generation.
Also it increases the brand awareness of rural consumers for various products (national and
international level). Marketers can make serious efforts to capture these adults group (falls in the age group of
20-35), for their products such as perfumes, two- wheelers, western outfits, etc., which accounts nearly 25%
of India’s consumption.

Density of Population:
Although the rural population has come down over the years, there has been considerable increase in
real terms of total number of rural population. If we compare the rural proportion to total population in the
Page 31
past three decades, it is slightly decreasing. But still the total number of rural population is increasing in a
considerable manner.

Rural Housing:
One can easily assess the economic status and growth of any sector with the help of housing pattern
they have. Over the decades, there has been spectacular change in the trend of housing pattern. People are
showing interest to shift from less permanent (semi-pakka) type of houses to more permanent (pakka) type of
houses.

Rural Household Pattern:

Rural household pattern consists of family structure and housing pattern. In rural areas also, Indian tradition
joint family system is slowly goes down and the nuclear family culture is spreading alike in the urban areas.

Family Structure:
Different types of family structures are existing in the demographic India. These can broadly be classified
based on the number of households in a family under two groups namely; Joint family and Nuclear family.
Again following the same classification pattern, nuclear family can be divided into two types such as – nuclear
family with elders and without elders.

Joint Family:
Group of people (grand-parents, parents, their brothers and sisters, their children) living together and using
common property and dwelling house. Generally, the elder person is the head of the family and he is
responsible to make decisions in all issues.

Nuclear with Elders:

It is a shrieked form of big joint family. It consists of grand-parents, parents and their children alone (not living
with parent’s brothers and sisters’ family). Here, also final decision is taken by the senior person. This lack of
individual decision making capacity is one of the major marketing hurdles for the marketers while promoting
their products in villages.

Nuclear without Elders:

This is the exact nuclear family which is commonly seen in urban sector Father, mother and their children
(nowadays, not even children only with single child) is the total family members and they can take individual
decisions in all matters.

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Recently, one more different type of nuclear family system is emerging in India. In this system, all are living
in a big common house but, having separate kitchens, savings, assets/properties, etc.

Occupational Patterns:
Agricultural and allied activities are the main occupation for the rural people. An allied activity includes
Horticulture, Forestry, Fishery, Animal Husbandry (dairy, poultry, and goat), Floriculture etc., the everyday
needs of the villagers are also met by many other types of occupations. In rural sector, agri-based occupation
can be different types.

Socio-Cultural Environment:
It is very difficult to define a definite boundary for the identification of socio-cultural differences in a country.
Because every country has different society and polity and that too varies from region to region. It also varies
between sub-regions, different religious, caste and community groups. So, some common factors have been
grouped together to form socio-cultural regions.

The major factors which are used to construct different socio-cultural regions in an environment are:
i. Sociological factors – It cumulates the habits, tastes, lifestyle and preferences of different consumers. The
social constitution and changes in the constitutions influences these in a big way.
ii. Anthropological factors – Existence of regional cultures and sub-cultures plays a predominant role here.
iii. Psychological factors – It includes the consumer’s attitude, interest, personality and mind set. These
psychological factors influence more in the overall buying behaviour of consumers.
Sales promotional schemes, selling and distribution strategies, advertising are all influenced more by the above
mentioned factors. So, the marketers are using these socio-cultural regions as a yardstick for their market
segmentation and targeting purpose.
In a nutshell, we can conclude that the urban environment shows degrees of homogeneity across the socio-
cultural regions, whereas the rural environment entirely differs.

Values and Beliefs:

Values are nothing but genetic traits and simplicity is the main ingredient. It is customary to respect
elders and touch their feet as to seek their blessings. Occasions or festivals demand a lot of participation in
terms of rangoli drawing, diyas and an array of yummy treats made in the authentic variety as per the caste
and geography.

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 Hindu rituals are a lot about song and dance and each family has a natural way to adjust to these
formats. It is a ritual to pray to the Goddess of learning Maa Saraswathi to achieve success. Similarly, business
people always insist on drawing the Swastika which marks prosperity and worship the Goddess of wealth.
The values in India are about living life with an enthusiasm and observing the belief that there is one God
existing despite so many religions. Respecting elders, understanding cross culture traditions, free mingling to
accommodate tolerance, staying interested in rural welfare are the values of India. The historical object, cuisine
handicrafts, attire and lifestyle of the rural folks is still followed and preserved by Indians.
Even though India is a country of various religions and caste, our culture tells us just one thing ‘phir
bhi dil hai Hindustani’.

Existence of Sub-Cultures:
Before we understand about the sub-culture, let us know about the culture. Culture is defined as a
complex of values, ideas, attitudes and other meaningful symbols created by man to shape human behaviour
and the artifacts of that behaviour as they are transmitted from one generation to next.
We are all aware that India is the place for existence of a number of sub-cultures. It is easy to identify people
through their sub-culture, which is reflected by the race, religion, region, nationality, etc. It varies from state
to state and even district to district.
People are likely to behave in the same manner, follow same religious practices and even represent the
same race when they come from the same state or nation. For example – An Indian will behave like an Indian
whichever country she/he goes. Similarly, a Kannadiga or a Bihari will always present herself/ himself as
belonging to her/his state. Even he/she will be more comfortable in the company of people from his/her state.
Rural people follow their culture very rigidly. A marketer has to understand the culture very deeply before
launching the product in a particular region or state of India. The symbol or language used to give message
about the product and even people selected (brand Ambassadors) to communicate the message also have to be
selected carefully depending upon the region, religion, etc.

Caste System:
The Indian caste system is a system of social stratification and social restriction in India in which
communities are defined by thousands of hereditary groups called Jatis.
Indian society stands strongly on four pillars, such as, Brahmins, Kshatriyas, Vaishyas and Shudras. Other
sub-castes and cults are constructed on these pillars only.
The Brahmins got first priority and supremacy position among the others. They have separate colony
(popularly called as Agraharam) for themselves and others are prohibited even to enter in that colony.
The next priority was given to Kshatriyas (i.e., warriors), followed by Vaishyas who belongs to business or

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trade group. And finally, Shudras were given lowest priority among the four classes and were suffered by lot
of social and economic disadvantages such as restricted to enter into temple, use common well, roads, school,
hospitals and other facilities.
They were supposed to live in the prescribed boundaries only. For example, for the survival of those
people, separate area is allotted which is far away to reach in general. If they entered in the common place or
use any resources, severe punishment are given by the supreme community people. After some decades,
fortunately, these caste based priorities were wiped out, and all are treated in equal manner.
Basic human rights got supreme priority instead of all other things because of the continuous effort taken by
our Government and other social service volunteers.
Even though, the old Zamindari system and untouchability were removed, still some sort of social
imbalances exist in many remote villages of India. Some people in village who are in the decision making
capacity, are more sensitive towards the caste based feelings and too rigid to even approach.
Their values and beliefs should be honoured; otherwise, reach and survival will be more difficult to
the corporate. So, the marketers should be very conscious while drafting their promotional policies, advertising
schemes to spread messages about products.
Caste system is very strong in rural India. People cannot do things against their caste. Rural people
have to marry themselves or their children within their caste. If they don’t do so, they may have to pay heavy
penalty such as – out casting them from the village and community or even sometimes parents kill their own
daughters and sons if they try to marry outside their caste or within their caste (Honour Killing).

Rural Recreation:
Recreation is a vital part of rural social life. For retaining the physical and mental health the recreation
plays a major role. There are several centres available in the towns providing recreating facilities as this is one
of the ways to recreate people out of dull and monotonous life. The rural recreations are not polished, home
grown and less costly.
There are several characteristics of rural recreation that are given below:
i. Part of a rural life –
It has become a routine work for the villagers to recreate after a day of hectic work as a part of their social
life.

ii. Collective participation –

Musical shows and dramas are the best recreating activities that the villagers perform. These are practised and
performed in groups. The villagers contribute together and also offer several prizes in order to enjoy
collectively.

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iii. Family influence –
During some festivals or any other auspicious occasions the family members actively participate and arrange
several recreational programmes.

iv. Religious Recreation –

Religion is a part of socio-cultural and recreation of rural India. Various religious stories are narrated or
enacted in a particular fashion with music through dramas and puppet shows etc.

v. Simple –
Rural recreation activities are very simple in nature. There is no element of commercialization in it.

vi. Universal –
The biggest advantage in the rural recreation activities is that the whole village population takes part and
enjoys every bit of life with their kith and kin.
However, nowadays there is a slight change taking place in the rural recreational activities. The new
technologies involved in recreation in the urban areas have also influenced the rural recreation programmes
such as – now the rural programmes are for a shorter time as compared to earlier which was slow and time
consuming. Some evil elements of urban recreation such as – smoking and drinking have also damaged spirit
of rural traditional recreation enjoyment.

Administrative and Legal Structures:

Panchayat Raj is a south Asian political system mainly in India. In India, it has a four way administrative
structure namely; Gram Sabha, Gram Panchayat, Panchayat Samiti, and Zilla Parishad. Traditionally, it is an
assembly of villagers under the head of five respective elders to settle their disputes.

Technological Environment:
The major three revolutions, Green Revolution in the agriculture sector, White Revolution in the dairy sector,
Fibre Revolution in the textile sector and the role of Non-Government Organizations were geared up many
changes in the technological environment.

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5.1 PRESENT SCENARIO IN RURAL MARKETING

As we know Indian economy comprising of both urban sector as well as rural sector. And concept of
rural marketing in Indian 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
behavioural factors operating in the country. The Indian rural markets with its vast size and demand base offer
great opportunities to marketers. About 68.84% of the consumers live in rural areas and more than half of the
national income is generated from rural areas. Of the 121 crore Indians, 83.3 crore live in rural areas while
37.7 crore stay in urban areas, Our nation is distributed approximately in 6,30,000 villages which can be sorted
in different parameters such as literary levels, accessibility, income level, penetration, distance from nearest
town etc. It is only natural that rural India occupies an important position in the marketing strategies both in
the narrower and broader spectrum. Rural marketing in Indian economy can be classified under two broad
categories. These are

(a) the markets for consumer goods that comprise of both durable and non-durable goods, and

(b) the markets 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.

5.2 ANALYSING TREND OF RURAL MARKETING

Trend recently has changed, the focus of marketers in India was the urban consumer and by
large number specific efforts were made to reach the rural markets. But now it is felt that wi th the tempo of
development accelerating in rural India, coupled with increase in purchasing power, because of scientific
agriculture, the changing life style and consumption pattern of villagers with increase in education, social
mobility, improved means of transportations and communication and other penetrations of mass media such
as television and its various satellite channels have exposed rural India to the outside worl d and hence their
outlook to life has also changed. By seeing of all these factors, rural marketing in now attracting more and
more marketers and moving towards the digital India. Day by day technological advancement not only seen

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in urban areas even it made the drastic shift in rural scenario. Increase in competition, saturated urban markets,
more and move new products demanding urban customers, made the companies to think about new potential
markets. Thus, Indian rural markets have caught the attention of many companies, advertisers and
multinational companies. According to a recent survey conducted by the National Council for Applied
Economic Research (NCAER), the purchasing power of the rural people has increased due to increase in
productivity and better price commanded by the agricultural products. By and large this rise in purchasing
power remains unexploited and with the growing reach of the television, it is now quite easy for the marketers
to capture these markets. Rural marketing has become the latest mantra of most corporate. Companies like
Hindustan Unilever, P&G, Colgate Palmolive, Britannia and even Multinational Companies (MNCs) like
Pepsi, Coca Cola, L.G., Philips, are all eyeing rural markets to capture the large Indian market. Coming to the
frame work of Rural Marketing, Rural Marketing broadly involves reaching the rural customer, understanding
their needs and wants, supply of goods and services to meet their requirements, carrying out after sales se rvice
that leads to customer satisfaction and repeat purchase/sales. Earlier, the general i mpression was that the rural
markets have potential only for agricultural inputs like seed, fertilizers, pesticides, cattle feed and agricultural
machinery. There is a growing market for consumer goods as well. Rural marketing involves the process of
developing, pricing, promoting, distributing rural specific product and a service leading to exchange between
rural and urban market which satisfies consumer demand and also achieves organizational objectives.

It is a two-way marketing process wherein the transactions can be:

1. Urban to Rural: It involves the selling of products and services by urban marketers in rural areas. These
include: Pesticides, FMCG Products, Consumer durables, etc.

2. Rural to Urban: Here, a rural producer (involved in agriculture) sells his produce in urban market. This
may not be direct. There generally are middlemen, agencies, government cooperatives, etc who sell fruits,
vegetables, grains, pulses and others.

3. Rural to rural: These include selling of agricultural tools, cattle, carts and others to another village in its
proximity. “Rural marketing can be seen as a function which manages all those activities involved in assessing,

stimulating and converting the purchasing power into an effective demand for specific products and services,
and moving them to the people in rural area to create satisfaction and a standard of living for them and thereby
achieves the goals of the organization”.

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5.3 TRENDS IN RURAL MARKETING

The companies should start selling the concept of quality with proper communication. Their main
focus is to change the Indian customer outlook about quality. With their promotion, rural customer asks for
value for money.

1. Large population:

The Indian rural market with its vast size and demand offers great opportunity to marketers. Our national is
classified in around 450 districts & approx. 6, 30,000 villages. Indian rural market is huge in size because rural
population accounts for almost 70% of Indian population as the recent Census 2011, 833 million live in rural
India, 33% of rural population includes youth, number of households increased from 25 to 33 crore. The rural
market is currently worth approximately USD$ 10 billion in consumer spending in the FMCG market annually.
Food categories are currently driving the bulk of the additional USD$ 90 billion into the marketplace by 2025.

2. Green revolution:

The vision of Dr Swami Nathan, the father of the green revolution to achieve self-sufficiency in food grain
production in 1995, gave a major breakthrough in food grain production by the use of scientific methods in
agriculture. At present, Rural India generates 299 million tons annually. The substantial attention accorded to
agriculture during the successive five-year plans has helped in improving agricultural productivity. Adoption
of new agronomic practices, selected mechanisation, multiple cropping, inclusion of ca sh crops and
development of allied activities like dairy, fisheries and other commercial activities have helped in increasing
disposable income of rural consumers. By observing this scenario, India’s one of the biggest giant Hindustan
Lever Ltd. has entered into rural market for more penetration through the operation “Bharat”.

3. Smart phones penetrating into rural India:

320 million are rural mobile phone users i.e. roughly 38 per cent of the rural population, which includes
children and senior citizens. The actual benefit of technology positively impacting rural economy will be seen
when data communication is used effectively. Since the mobile phone and associated wireless technologies
can be used to tackle one of the problems, namely, literacy, it would certainly have a cascading effect on the
economic development. The telecom service providers concentrate on subscriber acquisition in the rural
market, primarily for voice services, which has become commoditised due to intense competition in the sector,
it is not the end. The low and ever-dwindling ARPU (Average Revenue per User, currently at around Rs 200
a month) can be offset by using mobile services not just for communication, but to more basic aspects of life
such as education and healthcare.

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4. Increased level of education and employability of rural youth:

Villagers realized their children education is the first priority. Most of the rural youth especially teenagers are
well aware of products due to their school education and media exposure. Significant progress on literacy
levels – 90% of the villages have a primary school within a 1 km walk. Private school enrolment in rural India
has enhanced by 5.5% points over past six years. The literacy rate has also gone up by 68.91% in rural India.
This enhanced the employability of rural youth they are not sitting idle in villages they are motivated to go to
nearby towns to find the jobs.

5. Increased purchasing power:

Rural purchasing power has grown faster than urban in the recent years. Rural Indian economy is highly
supported by increasing disposable income, Government initiatives and schemes and favourable
demographics. As a result, the rural segment of the Indian economy is growing at a pace of 8-10% per annum.
Government spending in rural India has tripled over the last four years and is now translating into higher
consumer spending. Therefore, rural consumers are consuming more premium and convenience oriented
categories that are typical of their urban counterparts. “Policy measures like the waiver of agricultural loans
around US$ 13.9 billion and the National Rural Employment Guarantee Scheme, which guarantees 100 days
of employment to one member of every rural household (NREGS), the Bharat Nirman program with an outlay
of US$ 34.84 billion for improving rural infrastructure etc helped the rural economy.

6. Government Incentives and policies:

The government’s stress on self-sufficiency resulted in various schemes like Operation Flood (White
Revolution), Blue Revolution, Yellow Revolution, etc. resulted in the production of 15 million tons of milk
per annum. The Indian Government launched a number of schemes like IRDP (Integrated Rural Development
Programme) and REP (Rural Electrification Programme) in the 1970‟s, which gave a boost to the agrarian
economy. This resulted in changes in people’s habits and social life. REP gave impetus to the development of
consumer durable industry.

7. Media:

Mass Media has created increased demand for goods and services in rural areas. Smart marketers are
employing the right mix of conventional and non-conventional media to create increased demand for products.
The role cable television has been noteworthy in bringing about the change in rural people’s mindset and
influencing their lifestyles.

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8. IT penetration in rural India:

Today's rural children and youth will grow up in an environment where they have 'information access' to
education opportunities, exam results, career counselling, job opportunities, government schemes and services,
health and legal advice and services, worldwide news and information, land records, mandi prices, weather

forecasts, bank loans, livelihood options. If television could change the language of brand communication in
rural India, affordable Web connectivity through various types of communication hubs will surely impact the
currency of information exchange. As the electronic ethos and IT culture moves into rural India, the
possibilities of change are becoming visible. Products developed for rural marketing are Philips develop a tv
“vardaan” and free power radio for rural markets, ICICI rural ATMS, “Bhumiheen” credit cards by bank of
India’s “E-choupal” by ITC.

9. Better credit facilities through banks:

With co-operative banks taking the lead in the rural areas, every village has access to short, medium, long-
term loans from these banks. The credit facilities extended by public sector banks through “Kisan” Credit
Cards help the farmers to but seeds, fertilizers and every consumer goods on instalments.

10. Brand conscious:

The rural market in India is not separate entity in itself and it is highly influenced by the sociological and
behavioural factors operating in the country. Spending on FMCG products especially in the rural areas is
showing an increasing tendency.

11. Migration of Rural youth:

Rural youth come to cities in search of better jobs. When they travel back home, they carry with them stories
of urban lifestyles. Awareness is thus created in the potential markets. Increased contact of rural people with
their urban counterparts due to development of transport and wide communication network has influence on
rural consumers’ life style. Transportation and telecommunication tools are seen as status symbol for the rural
youth.

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12. The change in consumption pattern:

The consumption pattern and life style among rural consumers is changing due to exposure to media. Media
particularly TV has been a great level. Even in small villages, people who have seen the urban lifestyle on
television seem to want similar goods and services. On the consumption front, 33% of rural consumers are
eating biscuits and bread for breakfast. Instant noodle sales are double in rural India compared to urban.
Seemingly ‘urbane’ brands in categories like deodorant and fabric softener are growing much faster in rural
India than urban and 17% of rural buyers of hair dye now use colours other than black to indulge in the trend
of externalized beauty that is picking up fast in rural areas. Companies have realized t his and are going all out
to tap this latent demand.

13. Easy way communication:

For promoting their products especially in rural market companies have realized the importance of proper
communication in local language. They have also started selling the concept of quality with proper
communication channels and also in easily understandable way of communication to entice customers.

14.Developing specific products:

Keeping in mind the requirements and due consideration of rural consumers many companies are designing
and developing rural specific products.

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5.4 Strategies for Marketing Mix in Rural Markets:-

Considering the lack of proper infrastructure in the rural areas, companies have huge potential to
design products specifically suited to the rural needs and wants. The marketing mix strategies need to be
redefined keeping into consideration the variations in different rural markets.
The rural market has changed drastically in the past one decade. Rural marketing today is much easier than it
was for the pioneers because there has been considerable improvement in the means of transport and
communication during the last decade. Markets are better connected by road and rail, and the number of trucks
and buses (public and private) has increased considerably. Banks in the villages or nearby help rural dealers
in cleaning their documents without much delay. Cinema, Television and Radio now make it easier to
communicate with the rural consumers.
Also a decade ago, the rural market was more unstructured and was not a prioritized target location for
corporate. Very few companies, mainly the agro based ones, were concentrating in those markets.
There were no innovative strategies and promotional campaigns exclusively for rural markets.

Definition:
“A marketing strategy is a process or model to allow a company or organization to focus limited resources
on the best opportunities to increase sales and thereby achieve a sustainable competitive advantage.”

1. Segmentation of Rural Market:

The first step to is to developed and implement any strategy for the rural market should include the appropriate

segmentation of the rural market. Earlier there was no attempt to segment the rural market. The entire rural
world was considered as the same and was planned (not planned, and left over) for in a similar manner. As a

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result there was total mismatch between the aspirations of rural consumers and what marketers were thrusting
on them in different regions.

50% of India’s villages are very small having a population of less than 500 with a limited purchasing power
and many of them do not have even a single shop. The next following categories with population of 501 to
2000 numbering 2.5 lakh villages have around five shops. These villages may not be good enough for a
favourable distributions cost benefit equation to begin with, but can be tapped later after successfully tapping
the villages with a population of more than 2,000.

Therefore, the role of segmentation becomes an extremely important in the rural market. Marketeer has to
implement market penetration efforts in phase step by step. The lower hanging fruits need to be picked up first
for revenue gains and for the learning that will come with it. These initial gains can form the basis for further
expansion deeper into rural market.

(A) Product Mix Strategies

The specific strategies, which can be employed to develop or modify the products to targets the rural
market, can be classified as follows:

1. Small unit packing:

Given the low per capita income & purchasing habits of the rural consumers, small unit packages
stand a good chance of acceptance in rural market. Single serve packets or sachets are enormously

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 popular in India. They allow consumers to buy only what they need, experiment with new products,
& conserve cash at the same time. This method has been tested by products life shampoos, pickles,
biscuits, vicks cough drops in single tablets, tooth paste, etc. Small packings stand a good chance of
acceptance in rural markets. The advantage is that the price is low and the rural consumer can easily
afford it. This is because it is very affordable for the lower income group with the deepest market
reach making easy access to the end user satisfying him. The small unit packings will definitely attract
a large number of rural consumers.

2. New product designs:

Keeping in view the rural life style the manufacturer and the marketing men can think in terms of
new product designs. The rural product usage environment is tough because of rough handling, rough
roads & frequent power fluctuations. Thus, all these environmental factors must be considered while
developing the products meant for rural audience. In order to attract the semi-urban or rural
consumers, now most of the mobile companies are introducing Hindi language in their
economically priced model to facilitate and expand their consumer base. This is in real terms, thinking
global & acting local.

3. Sturdy products:
Sturdiness of a product is an important factor for rural consumers. The product should be sturdy
enough to stand rough handling, transportation & storage. The experience of torch light dry battery
cell manufacturers supports this because the rural consumers preferred dry battery cells which are
heavier than the lighter ones. For them, heavier weight meant that it has more over and durability.
Sturdiness of a product either or appearance is an important for the rural consumers.

4. Utility oriented product:

The rural consumers are more concerned with utility of the product and its appearance. During the
early seventies Philips India Ltd. had developed and introduced a low cost medium wave receiver
named BAHADUR. Initially the sales were good but later declined subsequently. On investigation it
was found that the rural consumer bought radios not only for information and news but also for
entertainment.

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 5. Brand name:

For identification, the rural consumers do give their own brand name on the name of an item. The
fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only
on generic names. A brand name or a logo is very important for a rural consumer for it can be easily
remembered. For example, Coca-Cola targeted the whole Indian rural market with the positioning of
“Thanda Matlab Coca-Cola” advertisements because most of the villagers say when wanting a drink
as „Thanda‟, so Coca-Cola used that word.

(B) Pricing Mix Strategies

The rural buyer is price conscious and looks for value of the money spent. Since storage and
affordability is also an issue, the purchases are mostly done at the time of consumption only rather than
for the future use. They usually buy in smaller quantity and frequency of repeat purchase is low. They
are not impulsive and want to get the best deal. The high priced consumer durable or automobile is
generally purchased after a thorough market research and price comparison.

1. Low cost/cheap products:

This follows from the product strategy. The price can be kept low by low unit packaging like paisa
pack of tea, shampoo sachets, etc. This is a common strategy widely adopted by many manufacturing
and marketing concerns.

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2. Refill packs/reusable packaging:
In urban areas most of the health drinks are available. The containers can be put to multipurpose
uses. Such measures can a significant impact in the rural market. For example, the rural people can
efficiently reuse the plastic bottle of hair oil. Similarly, the packages of edible oil, tea, coffee, ghee
etc can be reused.

3. Application of value engineering:

In food industry, soya protein is being used instead of milk protein. Milk protein is expensive while
soya protein is cheaper, but the nutrition content of both is the same. The basic aim is to reduce 4.
Large volume-low margins: Marketers have to focus on generating large volumes & not big profit
margins on individual products. If they price their product at a level which can lead to good volumes,
then they can still generate good returns on the capital employed.

4. Overall efficiency & passing on benefits to consumers:

For rural products, the strategy should be to cut down the production, distribution & advertising
costs & passing on these benefits to the customers to further increase the turnover. Most often, it
has been observed that advertising has less to do with product sales in the rural areas. If an
organization gets the price point right, then it can work in rural market.

5. Low volume-low price strategy:

This strategy of reducing prices by reducing the package size in order to make it appear more
affordable, is delivering very good results for a large number of FMCG product categories, in the
rural markets of India. In categories where maintaining the price point is extremely critical, this
strategy is delivering very good results. 7. Ensuring price compliance: Rural retailers, most of the
times, charges more than the MRP. The manufacture has to ensure price compliance either through
promotional campaigns, or by ensuring the availability of products at the retail outlets directly.

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(C) Promotion Mix Strategies

Customized promotional media & messages need to be developed by the organizations to effectively
target the rural market. The following strategies can be considered while developing promotional
campaigns for the rural markets:

1. Conventional & non-conventional media mix:

It is very important for the marketer to achieve success in rural market to build an association with
the rural customers which can be done with the help of using the various rural folk media to reach
them in their own language and in large numbers. As we know that the conventional media is not
deep rooted in the rural India, so the appropriate mix of conventional and non-conventional media
which is bound to generate effective results in the rural market. Television, radio, audio-visual van,
cinema commercials, wall paintings, intensive door-to-door campaigns, live demonstration and
distribution of free samples can be used as an effective media to boost the sales.

2. Opinion leader’s influence:

As the rural market has limited exposure to mass media and has scattered consumer groups, Word-
of-Mouth communication can be used effectively to promote the brands and products. It is not only
cost-effective but also provides more credible and favourable information from a satisfied customer
or opinion leader who is recognized by the villagers.

3. Think global, act local:

Rural population is diverse, but the commonalities of their ethos & simple living habits need to be
understood for advertising to succeed. For that, the theme of the advertisement needs to revolve
among universal themes. But the context, storyline, language & idioms should be such that the rural
audience of different rural market segments can relate to.

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 4. Think in local idiom:
This is the need of the advertising professionals who can think like the rural people. There should be
the use of language writers who understands the rural & regional pulse better.

5. Simplicity & clarity:

All promotional messages targeted at rural audience need to be simple & clear, which can be easily
understood, and they should not include any confusing elements. It is preferable that it has only a few
propositions at a time. Bombarding rural consumers with too much, in less time can easily confuse
them & leave them bewildered. Promotional message should highlight only the functional values of
the product & explains how those values can make the consumer’s life even better & solve any of his
problems.

6. Choice of brand ambassador:

Brand Ambassador for the rural markets needs to be picked carefully as urban successes might not
get replicated in the rural markets. An organization might spend a lot of money in hiring a brand
ambassador only to find out later that it had little impact on the rural consumer.

(D) Distribution Mix Strategy

Many companies view the rural markets as great opportunity for expanding their sales but find distribution
as a major problem. Unfortunately, it is almost impossible to transplant strategies which work successfully
in urban markets onto rural markets, namely, extensive retailing and sustained pull generation through
mass media advertising.
The road blocks to reach the rural customers are:
➢ lack of adequate transport facilities.
➢ large distances between villages.
➢ lack of pucca roads connecting villages to nearest townships.
➢ lack of proper retail outlets,
➢ lack of mass media infrastructure, and so on.
The marketers were of the opinion that the villagers would come to nearby towns and buy the products
that they want. What has been found is that if we have to serve the rural consumer we will have to take
our products to him through the channels that he is using and some innovative ways of getting to him.
The following distribution strategies have been formulated for the rural category:

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1. Coverage of villages with 2,000 and above population:
Ideally, coverage of villages with up to 2,000 and above population could be the break-even point for
a distribution setup. By doing so the percentage of villages covered comes to only 10 percent of all the
villages, but the rural population covered will be substantial, to the extent of about 40 to 45 percent.
With a distribution network in about 55,000 villages, which have a population of 2,000 persons &
above each, one can cover about 25 crores rural consumers. This strategy is good to begin with & then
subsequently, villages with lesser populations can be added.

2. Segmentation:
The number of villages in India is huge & it is not viable to contact & serve all villages directly.
Therefore, companies or distributors can carefully examine the market potential of different villages
& target the villages that can be served in a financially viable manner through an organized distribution
effort.

3. Shandies/haats and melas:

The use of captive audience points like melas, haats and fairs has contributed significantly in order to
increase the sales of the products in rural areas. There are about 47,000 haats and about 25,000 melas
(90% are religious and only 10% have commercial values) which are targets as the distribution points
to increase the sales of products in these hinterlands.

4. Distribution up to feeder markets:

Keeping in view the hierarchy of the rural villages, feeder markets or mandi towns offer excellent
scope for distribution. The stockiest and distributors appointed in these areas are responsible to supply
the products to the far situated villages.

5. Use of co-operative societies:

There are over 3 lacks co-operative societies operating in rural areas for different purposes like
marketing cooperatives, farmer’s service cooperatives and other multipurpose cooperatives. These
cooperatives have an arrangement for centralized procurement and distribution through their respective
state level federation. Such state level federation can be motivated to procure and distribute
consumables items and low value durable items to the members to the society for serving to the rural
consumers. Many of the societies extend credit to the members for purchases.

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 6. Utilization of public distributor system:
The PDS in the country is fairly well organized. The revamped PDS places more emphasis on reaching
remote rural areas like the hills and tribal. The purpose of PDS is to make available essential
commodities like food grains, sugar, kerosene, edible oils and others to the consumers at a reasonable
price. The shops that distribute these commodities are called fair price shops. These shops are run by
the state civil supplies corporation, co-operatives as well as private entrepreneurs. Here again, there is
an arrangement for centralized procurement and distribution. The manufacturing and marketing men
should explore effective utilization of PDS.

7. Utilization of multipurpose distribution centres by petroleum/oil companies:

In order to cater to the rural areas the petroleum/oil companies have evolved a concept of multipurpose
distribution centre in rural areas. In addition to petrol/diesel, lubricants, these outlets also stock
consumables agricultural inputs like fertilizers, pesticides and seeds. It is estimated that there are about
450 such outlets in operation in the country.

5.5 Solutions to the Problems of Rural Marketing in India

1. The rural population should be developed in all aspects strategies must be designed by the central
government, respective state governments, local bodies and NGOs for the upliftment of the same.

2. Adequate infrastructural facilities like roads, bridges, ware houses, marketing yards, information centres
etc., must be provided by in association with public and private partnership.

3. Communication networks like postal, telegraph, telecommunication, television, cinema, etc., need to be
strengthened in the rural India. It can be done with the help of the technology and customized services designed
to satisfied the communication requirements of rural masses.

4. Banking and financial system need to be redesigned and reinforced as per the requirements of the rural
societies. Private banking system, co-operative credit societies and other financial institutions should extend
their operations to the rural areas and should provide all possible services.

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5. A program should be initiated to connect all rural areas with the highways, urban and semi urban centres
throughout the country. A broad understanding must be developed on cultural patterns, climatic and
geographical conditions pattern of living traditions, customs, values, and beliefs of the peoples with the help
of research centres in that respective areas.

6. Training Programs must be designed to impart the knowledge in vocational and non-agricultural sectors to
the rural people so that the dependency on agriculture can be reduced and the rural entrepreneurial activity and
industries can be strengthened. This measure will definitely increase the average and per capita income of the
rural house holds

7. Both central and state governments should provide a platform through which rural entrepreneurs can join
together in a given area to comeback the problems of low production this would include standardizing their
products, common marketing and sharing of revenues in proportion to the contribution by each member.

8.Interventions by government agencies are needed to do the market research and disseminate the findings to
the rural marketers at an earliest so that they can be benefited with the competitive advantage. Further accurate
market planning form the main ingredient in an effective marketing plan. Hence marketing planning must be
done on scientific and statistical basis.

5.5.1 Steps taken by government in developing rural markets

1. Regulated Markets:
The government came up with the concept of regulated market where the sale and purchase of the
products are monitored by the Market Committee. This Market Committee consists of farmers,
government agents and traders. This practice infuses greater transparency in the marketing system
through the use of proper scales and weights. Such committees ensure the farmers and the consumers
in receiving fair price in exchange of their products.

2. Infrastructure Development:
The present infrastructure is not sufficient to meet the growing demands of the farmers. Indian
government provided cold storages and warehouses that help the farmers to sell their product at the
time when the price is attractive. Also, railways offer subsidised transport facilities to the farmers . This
enables the farmers to bring their product to urban areas where they can earn huge profits.

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 3. Co-operative Agricultural Marketing Societies:
The government also started co-operative marketing under which the farmers get access to fair prices.
This is due to the better and enhanced bargaining power of the farmers via collective sale in the market.

4. MSP Policy:
Minimum Support Price is a minimum legislated price that a farmer may charge in exchange for his
products. This enables them to sell their products in the open market at a higher price. The MSP
insulates the farmers in case of price fall as this is the minimum price that they can r eceive. The need
of such assurance to the farmers is of immense importance as farming i n India is subject to many
uncertainties.

5.5.2 Developments of Rural Marketing In India

Following are some of the major investments and developments in the Indian rural sector

➢ India’s unemployment rate has declined to 4.8 per cent in February 2017 compared to 9.5 per cent in
August 2016, as a result of the Government’s increased focus towards rural jobs and the Mahatma
Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.
➢ The Ministry of Rural Development is expecting to achieve its annual targeted length of 48,812
kilometers of rural roads by March 31, 2017 under the Pradhan Mantri Gram National Conference on
Marketing and Sustainable Development Sadak Yojana (PMGSY), which has reached a completion
stage of 67.53 per cent (32,963 kms) as on January 27, 2017.
➢ The National Bank for Agriculture and Rural Development (NABARD) plans to provide around
200,000 point-of-sale (PoS) machines in 100,000 villages and distribute RuPay cards to over 34 million
farmers across India, to enable farmers to undertake cashless transactions.

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 5.5.3 Government Initiatives

The Government of India has planned various initiatives to provide and improve the infrastructure in rural
areas which can have a multiplier effect in increasing movements of goods, services and thereby improve
earnings potential of rural areas subsequently improving consumption.

➢ The Government of India has approved the proposal to construct 10 million houses for the rural
population, which will require an investment outlay of Rs 81,975 crore (US$ 12.7 billion) for the period
from 2016-17 to 2018-19.
➢ The Government of India aims to provide tap water regularly to every household by 2030 in line with
United Nations Sustainable Development Goals, requiring a funding of Rs 23,000 crore (US$ 3.57
billion) each year until the target is met.
➢ The Government has introduced various reforms in the Union Budget 2017-18 to uplift the rural
markets. Some of the key highlights of the Budget are:
i. Rs 187,223 crore (US$ 28.08 billion) has been allocated towards rural, agriculture and allied sectors.
National Conference on Marketing and Sustainable Development
ii. The Allocation for Pradhan Mantri Aawas Yojana-Gramin has been increased from Rs 15,000 crore (US$
2.25 billion) to Rs 23,000 crore (US$ 3.45 billion) in the year 2017-18 with a target to complete 10
million houses for the houseless by the year 2019.
iii. The pace of roads construction under Pradhan Mantri Gram Sadak Yojana (PMGSY) has been
accelerated to 133 kms per day as against an average of 73 kms per day during the years 2011-14.
iv. The allocation to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has
been Rs 48,000 crore (US$ 7.2 billion) in the year 2017-18, which is the highest ever allocated amount.
v. The Government of India is looking to install Wi-Fi hotspots at more than 1,000 gram panchayats across
India, under its ambitious project called Digital Village, in order to provide internet connectivity for mass
use, as well as to enable delivery of services like health and education in far-flung areas.
vi. In the Union Budget 2017-18, the Government of India mentioned that it is on course to achieve 100 per
cent village electrification by May 1, 2018.
vii. The Government of India has sought Parliament’s approval for an additional expenditure of Rs 59,978.29
crore (US$ 8.9 billion), which will be used to support the government’s rural jobs scheme, building rural
infrastructure, urban development and farm insurance.

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6.1 Case study

Hindustan Unilever Limited (HUL) is a consumer goods company headquartered in Mumbai,

India. It is a subsidiary of Unilever, a British company. Its products include foods, beverages, cleaning
agents, personal care products, water purifiers and other fast-moving consumer goods.

HUL was established in 1931 as Hindustan Vanaspati Manufacturing Co. and following a merger of
constituent groups in 1956, it was renamed Hindustan Lever Limited. The company was renamed in June 2007
as Hindustan Unilever Limited.

As of 2019, Hindustan Unilever's portfolio had 44 product brands in 14 categories. The company has 18,000
employees and clocked sales of ₹34,619 crores in FY2017–18.

Product category:-

HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as
soaps, tea, detergents ,shampoos, water purifier (pure-it) amongst others with over 700 million Indian
consumers using its products.

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6.2 HUL – Project Shakti

Project Shakti was born in December 2000 in the district of Nalgonda in The Southern Indian state of
Andhra Pradesh. Project Shakti is an initiative to financially empower rural women and create livelihood
opportunities for them. Through this project, the Company endeavours to enhance livelihoods of rural women.
Around 70% of Shakti Ammas are working in low Human Development Index districts. The company contact
and appoint rural women as Shakti Entrepreneurs (SE), commonly referred as 'Shakti Ammas'. SE are educated
and trained by the rural promoter about the Company products and their utility in day to day life in maintaining
health and hygiene. After being trained about the products she receives stocks from company rural distributor
at a discount below the price at which the products are sold in the normal course. The Shakti Entrepreneur
then sells these goods both directly to consumers (through home to home selling) and to retailers in the village.
The Company has trained thousands of Shakti Ammas across the villages in a bid to develop an entrepreneurial
mindset and make them financially independent and more empowered. A typical Shakti Amma earns around
Rs. 1000/- per month through selling our products. A Shakti Amma in her village gains a social status as she
is associated with the reputed company in addition to being financially empowered.

A team of Rural Sales Promoters (RSPs) coach these women Shakti entrepreneurs by familiarizing
them with HUL products in order to manage their businesses better. This includes basics and troubleshooting,
as well as enhancing their soft skills of negotiation and communication.

Mission:

Unilever’s mission is to add vitality to life. We meet everyday needs for nutrition, hygiene, and
personal care with brands that help people feelgood, look good and get more out of life.

Vision:

Shakti shall reach every home in every village, create sustainable livelihood opportunities, and
enhance the quality of life in rural India.

Social Impact and Role of Business

HUL should make a social impact on rural India. By involving in the improvement of rural living
conditions HUL can and will continue to enjoy the competitive advantages as the main company to participate
in social development. The connection between business and communities will develop lifetime customers for
HUL. This involvement may not be the typical role of business but as long as it is profitable to HUL without
compromising moral and legal issues it well be a good move for HUL to increase its reputation as a socially
responsible organization.

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Page 57
Key features of project Shakti are:
1. It is an effective channel to reach to rural market which is not easily possible with the usual measures.

2. It also carries social objective along with it as it helps empowers the women of the village so they can
support the family.

3. It has targeted the females which is a good proposition as males are busy in other wage earning activities
so they might not spare time for the activities of the project Shakti.

4.It provide a consistent competitive advantage to HLL over its competitors, as through this channel they are
able to reach directly to the consumer, and there is personal touch to consumers as Shakti entrepreneur is one
among the villagers only.

Objectives of Project Shakti:

• HUL argued that access to rural markets would be the big differentiator among FMCG companies.
• To reach smaller villages that are untapped.
• To Provide sustainable livelihood to under privileged rural women
• 50% of SE’s are from backward classes
• Age group of 25 to 45 (female) & 25 to 50 (Male)
• Female – Shaki Ammas; Male – Shakti maan

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Shakti Vani : The communicator

An initiative which helps support Project Shakti is the Shakti Vani programme. Under this programme ,trained
communicators visit schools and village congregations to drive messages on sanitation, good hygiene practices
and women empowerment. This serves as a rural communication vehicle and helps the SA in their sales.

Social communication anchored on brands

➢ health and hygiene

➢ women’s empowerment

Village women are recruited as Vanis and trained to communicate

Vani audience:

➢ key opinion leaders, schools, SHG meetings ,other village gatherings

Specially designed communication material

➢ easy-to-carry kit: flip-charts, leave-behind posters, banners

➢ content developed after in-depth understanding of local context

Thus the need across as the awareness and sale of soaps and toothpaste in rural markets is low, so by
improving the quality of life HLL helped itself in the long run.

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i – Shakti : The portal

➢ In 2004, we started “i-Shakti” an IT-enabled community portal across the state of Andhra Pradesh. i-
Shakti is designed to give rural people access to information via a network of village “kiosks”
containing internet linked computers run by entrepreneurs.
➢ Villagers can access free content, developed in their local language, or email questions on a wide range
of topics, including Unilever products, health and hygiene, agriculture, education, finance and
employment.
➢ The aim is to have 1 500 i-Shakti kiosks on stream by the end of 2005 covering 7500 villages and 10m
people.
➢ Rural community portal that creates access to information.
➢ Villagers can register as users and surf content areas: Agriculture, health, veterinary services,
education, employment opportunities, education, personal grooming, entertainment, games.
➢ All content backed by local language voice-over.
➢ On all content areas, users can pose queries.
➢ 1,000 kiosks in AP online, partly state-owned e-government portal.

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Hindustan Unilever's project SHAKTI - Marketing FMCG to the Rural Consumer

Facts of the Case:

➢ Intense competition from international as well as local players in 2000

➢ Necessary for HUL to penetrate the untapped rural with urban markets saturated
➢ Rural markets were scattered over large areas and per capita consumption was low.
➢ Shakti was promoted as a CSR activity.
➢ Project shakti was a unique sales channel due to the reason apart from its scale and deep rural reach
was that it reached the final consumer rather than an outlet which would then sell to consumers
➢ Shakti created a vast local, credible, one-to-one endorsers.

challenges

➢ To expand into rural market while continuing its CSR activity

➢ To reduce cost on training and HR related activities
➢ To expand the shakti program in more states
➢ To attract investments from the brand houses
➢ To increase confidence and motivation of the entrepreneurs

Competitor’s

➢ ITC
➢ COCA COLA
➢ DABUR

S.W.O.T. Analysis

Strengths

➢ Shakti is scalable and sustainable due to social beneficial aspects.

➢ Backing of huge brand house.
➢ Government and NGOs support.
➢ Difficult tool imitate model for competitors and especially in a short time.

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Weakness

➢ Rural market were scattered over large areas and per capita consumption rates were low.
➢ Unequal acceptance of the role of women entrepreneurs in a different states.
➢ Poor rich of electronic media and significantly lower literacy levels.

Opportunities

➢ Recognition of the role of women by society.

➢ Huge untapped rural market.
➢ Support from government.

Threats

➢ Scattered rural market.

➢ Competitors are tapping the strategy.
➢ High net for training of the entrepreneurs.

Evolution of the initiative

➢ HUL continue to empower Their Shakti entrepreneurs and have been able to raise the standard of living
for the local communities. HUL help impart training to Shakti entrepreneurs in sales, marketing and
accounting by recruiting and training sales agents from villages.

➢ With the integration of technology, incentives to Shakti entrepreneurs are now directly transferred to
their banks, helping them enter the formal banking segment.

➢ For the last one and half years, HUL have also partnered with an Indian adhesive company to sell their
products through our Shakti network. This, in turn, has helped generate increased revenue for their
Shakti entrepreneurs.

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Resilience during COVID-19

Project Shakti embraces HUL’s philosophy of ‘Doing Well by Doing Good’ – A philosophy that has
been extended even during the unprecedented times of COVID-19.
With travel restrictions interrupting the distribution and affecting the timelines of HUL operatio ns,
there key challenge was to service Shakti entrepreneurs in remote areas. To ensure uninterrupted supply of

stock to our Shakti entrepreneurs, the HUL regional sales team and distributors implemented innovative ways
of demand capture and fulfilment for the Shakti Channel. HUL immediately switched to taking orders via tele-
calling and ensured that rural demand for essential products was captured effectively.

Overall impact

At the end of 2020, HUL have nearly 1,36,000 Shakti entrepreneurs spread across 18 states. Project
Shakti has helped generate income by selling their products and has created a great impact on the livelihoods
of women. Thus, not only helping them improve their confidence and self-esteem by gaining selling skills and
enhancing their communication skills, but it has also helped build, as well as foster an entrepreneurial mindset
amongst the women Shakti entrepreneurs.
Adapting the Shakti model to explore new ideas, now HUL have launched similar programmes across
Sri Lanka, Pakistan, Ethiopia, Egypt and Columbia. As they enter 2021, Team Shakti continues its journey of
empowering more rural women and driving consistent growth.

Conclusion

Project shakti started to suffer from growing so big that the current structure needs to be adjuste d.
Restructuring the managing measures of RSP to entrepreneurs, focusing shakti in selected districts and
prioritizing efforts in existing entrepreneurs, Shakti will generate higher revenue with minimum increase in
cost. Shakti should continue as it is providing HUL a distinct competitive edge and increase HUL’s profits
and growth. Moreover, Shakti helps to position HUL as socially responsible organization

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 CHAPTER 7
DATA ANALYSIS AND INTERPRETATION
In order to know whether the People are aware of the Rural Marketing:- Trends and Strategies, a questionnaire
was given to them. After getting the appropriate data, the findings and analysis are as follows:

7.1 Gender of Respondent

Category %
Male 55.1
Female 44.9
Total 100

Source : Primary Data

INFERENCE

➢ Analysis should not be biased as here the ratio is quite equal .

➢ The responses are taken from both male and female So as to reach at a proper conclusion

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 7.2Age of Respondent
Category %
Below 20 13.5
21 to 35 73
35 to 60 12.4
60 & above 1.1
Total 100

Source : Primary Data

INFERENCE

➢ As am a college student The most of the responses collected by me are from the age group 21 to
35.
➢ Also keeping in mind to have a proper analysis I tried each age group to participate in my
Survey.

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 7.3 Occupation of Respondent
Category %
Student 51.7
Service 36
Business 1
Professional 7
Housewife 4.3
Total 100

Source : primary Data

INFERENCE

➢ As most of the responses are from the age group of 21 to 30 mostly people as students and
thus it has the majority
➢ But I had tried involve each and every age group to share their View on the survey

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 7.4 Does the rural market form the main and major part for companies to target
audience?

Category %
Yes 68.5
No 31.5
Total 100

Source : Primary Data

INFERENCE
➢ As more than 68.5pcnt of votes are for Yes i.e. they think rural market is not major part for companies
target audience.
➢ As the product to reach rural market needs extra efforts as there is less facilities to reach to people
lack of infrastructure , and lack of education to some extent.

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 7.5 Do you think rural marketing is more challenging than any other type of
marketing?
Category %
Yes 67.4
NO 32.6
Total 100

Source :- Primary Data

INFERENCE

➢ More than 67percnt votes to yes as they think rural marketing is more challenging .
➢ As the people in rural areas are not that dynamic or there is no ease for a change in their minds.
➢ As to attract them through marketing is challenging as to examine their needs and utility for the
product

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 7.6Which type of product are sold more in rural Indian market?
Category %
FMCG Product 49.4
Luxury Product 1.1
Agriculture Related Product 44.9
Automobile 4.5
Total 100

Source : Primary Data

INFERENCE

➢ Here the people votes a slight more for FMCG products as the FMCG is mainly related to food
➢ products ,the need which has to be completed.
➢ Second goes for the Agricultural product as rural areas have ample of agricultural lands and thus
to fulfil the agricultural needs it's products as sold more .
➢ People in rural areas live a simple life rather than luxurious so this products and automobile
products don't have any demand their

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 7.7Which External Environmental factor affect Company more at the time of
making strategy?
Category %
Demographic factor 20.2
Socio-culture factor 52.8
Political factor 6.7
Technological factor 20.2
Total 100

Source : Primary Data

INFERENCE
➢ Here the Demographic Political and technological factor are not that powerful to affect a company
Marketing strategies in rural areas.
➢ Here the people follow more to their culture and also shares interest in there society . So socio
culture factor affects the most in rural areas

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 7.8Which is the most effective strategy for the promotion of the product in rural
market?
Category %
Wall Painting 20.2
Van Campaigns 38.2
Television 69.7
Radio 5.6
Mela 34.8
Total 100

Source : Primary Data

INFERENCE
➢ Although rural people don't live a luxurious life but television is now a need and medium of awareness
And also the Van campaign are still effective in rural areas .
➢ Others such radio mela wall paintings are comparatively less effective to the promotion strategy

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 7.9Major issue faced by company in rural marketing?
Category %
Underdeveloped Market 44.9
Poor literacy rate 37.1
Transportation 37.1
Many language and dialects 42.7
Total 100

Source : Primary Data

INFERENCE

➢ Here the votes are somehow same for all the issues faced by company in rural marketing, as the
market there is not dynamic and is undeveloped ,
➢ Lack of education creates poor literacy rate ,
➢ Lack of infrastructure leads to less facilities of transportation ,
➢ The language and dialects changes from one rural area to another

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 7.10 which company started project shakti?
Category %
HUL 77.5
ITC 9
DABUR 3.4
TATA 10.1
Total 100

Source : Primary Data

INFERENCE

➢ HUL Started the Shakti Program Enhancing livelihoods through Project Shakti. Project Shakti enables
rural women in villages across India to nurture an entrepreneurial mindset and becom e financially
independent. And 77 percent of the people are aware about the program.
➢ Some people think that ITC & TATA started the project shakti.
➢ They are unaware about the project shakti.

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 7.11 Main motto of project shakti?
Category %
Increase Literacy rate 21.3
Financially Empower Rural Woman 62.9
Technology development in rural India 12.4
Increase transportation facility in rural India 3.4
Total 100

Source : Primary Data

INFERENCE

➢ As we see the people are known about the Shakti Program and who Started it
➢ But the actual awareness of the Shakti Program is known to 62 percent of the people as it's
running majorly in rural areas the awareness is quite low.
➢ Shakti Programme’s Main motto is to Empower Rural Woman Finacially.

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 7.12 Competitor For HUL?
Category %
ITC 77.5
COCA-COLA 25.8
DABUR 22.5
MARICO 1.1
Total 100

Source : Primary Data

INFERENCE

➢ ITC also deals in wide range of products and has a good Market share too, thus it makes the
competition to HUL
➢ But This competition is between only the market share and capital as both the companies are
having different products.

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 7.13 Green revolution is related to what ?
Category %
Agriculture 89.9
Fishing 2.2
Automobile 4.5
Dairy Product 3.4
Total 100

Source : Primary Data

INFERENCE

➢ As we know Our country's main occupation is agriculture And also the economy is based
on it
➢ The main and effective revolution which took place for agriculture is Green Revolution and
is known by 90percent on the people approximately.

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 7.14 Which marketing mix used in rural marketing?
Category %
4P 32.6
4A 61.8
7P 5.6
Total 100

Source : Primary Data

INFERENCE

➢ Acceptability, Affordability, Accessibility, and Awareness.

➢ As we know the rural areas are not dynamic as urban and awareness is low for the new
trends and products .
➢ Thus the 4As marketing mix work effectively for the rural areas

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 7.15 What influence more to Consumer to buy particular product in rural
marketing?
Category %
Advertisement 53.9
Word of Mouth 70.8
Attractive packaging 11.2
Wall painting 5.6
Family/Friends/Relatives 32.6
Total 100

Source : Primary Data

INFERENCE

➢ Of course advertisements plays a major role for marketing in urban as well as rural areas
➢ But here the rural people believe on the Word Of Mouth as they are uneasy towards a change
and needs a Voice of their representative to have a belief on product
➢ Thus the most votes are for word of mouth

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 7.16 Which media have a greater effect than the impersonal ones in the rural
marketing context?
Category %
Personal 67.4
Impersonal NIL
Direct 31.5
Indirect 1.1
Total 100

Source : Primary Data

INFERENCE

➢ As in rural areas one have to apply utmost force and hard-work for a Marketing of product
➢ But here the personal and direct ways as much effective as the rural people mostly don't
believe in the Indirect methods of marketing

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 6.17 Did You find any Product difference which is sold in rural market?
Category %
Yes 48.3
No 30.3
Maybe 21.3
Total 100

Source : Primary Data

INFERENCE

➢ Here the people feels the product difference between the product sold in urban areas as the product
sold in urban areas are according to their need and utility and keeping in mind all the factors which
affects the product

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 CHAPTER 8
FINDING & SUGGESTION

8.1 FINDING
➢ It is found that people are not taking rural marketing as an important part in Indian Economic
development.
➢ Government and other companies taking initiative to Improve rural market.
➢ The company like HUL help rural woman to improve there financial condition as well as help to
independent.
➢ In rural Marketing, the company have to think out of the box while making strategy to sell there
product in rural market.
➢ There is many trends in rural marketing already adapted. Also it create large no. of customer base
for FMCG product.
➢ It is found that people think that rural marketing is easy which is wrong to study rural marketing and
create a product for them it is very difficult task.
➢ The major challenge faced by company while making strategy is underdeveloped market and many
language and dialects & Transportation.

8.2 SUGGESTION

➢ Company need to understand the basic need of the rural consumer.

➢ Except Attractive packing company create a product which is reusable.
➢ Company have to follow new strategy to sell their product in rural marketing.
➢ company have to provide quality goods in rural market. Because the consumer are now quality
conscious.
➢ MNC work on the increase the literacy rate in rural Indian market.
➢ They have to came up with the innovative product idea.
➢ At the minimum price the company should provide best quality product to the rural consumer.
➢ Increase there distribution channel so the product is available at the right time and at the right
place whenever is needed
➢ Strong communication system lead to better relationship with the customer.
➢ In rural India, organisation need to follow Personal marketing to sell there product. Personal
marketing help them to reach maximum consumer in rural marketing & help to boost sale in rural
market.
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 8.3 Conclusion

India’s rural market could have been stronger than the present position, if Indian policy makers have
made adequate infrastructure for rural India. Rural markets, as part of any economy, have untapped potential.
Thus looking at the challenges and the strategies which rural markets offer to the marketers it can be said that
the future is very promising for those who can understand the dynamics of rural markets and exploit them to
their best advantage.

The study concludes that to achieve the objectives of the rural market development, the governments
and private agencies have to focus on the improvement of all the problematic areas of rural marketing and
should find proper scientific solutions to address the same. Efforts must be taken to rejuvenate the market ing
of rural products; it would definitely help the myriad of rural entrepreneurs across India. Product awareness
campaigns and advertising communications too need to be designed and executed keeping in tune with the
context. All the citizens must join hands together to promote the rural markets in India as India lives in rural
societies.

The innovation in Rural Marketing by HUL, Philips, Coca-Cola, LG Electronics, ICICI Bank,
Godrej, ITC and Asian Paints has shown us how corporations have customized the marketing mix
towards the rural consumers which is called the 4As of rural marketing. The rural market brings along
with it opportunities and challenges which are to be conquered and overcome respectively. The marketers
need to develop a connection with the rural consumers and then according to their needs and demands
develop and sell products. The rural youth is in the future is going to play a very significant role along with
the changing literacy rates among rural consumers. The innovations in rural marketing have impacted the
lives of these rural consumers and will do so in the near future. The development of rural markets is also a
step towards development of the nation. A crucial role is played by the government, and NGOs, and Self-
Help Groups. The rural market presents with it a great prospect in the future to the marketers and this
promises to deliver a better standard of life for the people living in these rural areas.

The rural markets hold a lot of potential and profit-making opportunities for the business organization.
All that is needed is a well- analysed and planned rural marketing strategy to penetrate these markets. The
most extensively adopted strategy is personal selling and retailing of the goods and services. Such practices
develop trust among rural consumers who are usually conservative and resistant for trying new products.

Rural marketing is a potential business opportunity for the organizations if they analysed these markets
thoroughly and plan accordingly.

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