SYMBIOSIS Unit 10 - Future Direction of Rural Marketing

Prof.
Dhirendra Apte
Symbiosis Centre for Management Studies
TY BBA : Sem 5 -
Fundamentals of Rural Marketing
Chapter / Unit - 10 :
Future Direction of Rural Marketing
Prof. Dhirendra Apte

Chapter / Unit - 10 : Future Direction of Rural Marketing
 Rural markets have gained significance which will lead

to sustainable development and growth of Indian economy in
upcoming years resulting in substantial increase in buying power
of rural consumers.
 Rural India in the near future is presumed to become one of the
largest markets on the globe and is also transforming quickly in
this dynamic world.
 Today India's rural population consists of 12% of the world
population representing huge untapped population.

 At a time when recession-hit multinationals are

looking at India to capitalise on growing urban
consumerism, the Tatas and many other Indian
conglorates are delving deeper into the
hinterland by increasing their focus on the
burgeoning rural Indian market.

Need :
 Companies will need to reinvent their business models
and their very approach of doing business. They stand a

greater chance of success and long-term survival in rural
areas.
 They will have to follow the design thinking pattern – a
solution-focused and action-oriented mindset towards

creating a preferred future.
 A paradigm shift of thinking with open-minded, no-holds-
barred approach will be required rather than the narrow,

technical view of innovation traditionally taught at many
business and engineering schools.

Inclusive Marketing
Businesses will need to go beyond selling to BoP segment.
They will have to see the potential in the poor population not just
as Consumers but as Producers / Suppliers.
This approach will add economic value to goods / services.
Example : ITC’s e- chaupal ensures that farmers as producers get
better value for their produce which in-turn raises their economic
status and removes poverty of rural population to some extent.

Need :
Embracing experimentation stand to win huge new markets
and profits. Investment in distribution and training of local
resources, developing innovative products and processes,
involve stakeholders and above all building a social
purpose in their objectives will be required.
Straying from their core purpose may well attract the ire of
shareholders who invest in companies for financial returns.
They could well see a company’s social investments as
reducing their returns.

‘Go rural’ is the marketer’s new slogan.
Indian marketers as well as multinationals, such as Colgate-

Palmolive, Godrej and Hindustan Unilever have understood
the potential and so have focused on rural markets.
Thus, looking at the opportunities, 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.

According to market research expert Nielson, by 2025, the

rural FMCG sale is estimated to be$ 100 billion from the
current $ 12 billion – an increase of more than 800% in just
2 years.

 Steady growth in average Income Levels : The

average income level of rural consumers is increasing steadily
which would result in less price-sensitive clients.
 Growing Access to Information :

This will help rural consumers for making better informed
purchasing decisions.
 Growing Awareness : Due to more and more penetration of

internet & telecommunication facilities in more and more rural
areas, the awareness of average rural consumer about availability
of different products and their features is growing. This will make
the job of business less cumbersome in planning & designing
their marketing campaigns for rural markets .

 Growing Access to Information :
This will help rural consumers for making better

informed purchasing decisions.

What is the future of rural marketing?

Apart from achieving profit targets, the Success of any
business depends on the following 3 paradigm shifts in
their rural marketing approaches –
 Innovation,
 Transformation of companies into social enterprises and
 Technological advancements that bring rural consumers

closer to companies.

 Rural markets have a lot of potential especially for FMCG

and consumer durables. More than 800 million
consumers live in rural areas which make up for about
70% of country’s population.
 Majority of these markets are not fully explored and so

there is ample opportunity for businesses to benefit.
 Marketers are steadily realizing this and have started to

direct their attention in this area. The progress made by
them as well as government is commendable but their
are certain roadblocks and limitations when it comes to
rural marketing in India.

Some of the limitations of rural marketing in India are mentioned below -

Underprivileged people and resources : BPL segment is the major segment of rural
areas.
Inadequate means of communication : Marketing is all about communication. Brands
have to convey their message to the masses effectively.
Language barrier : With over 100 different languages spoken in India, and majority of
people don’t understand any other language so it becomes difficult to communicate with
them. Use of advanced technology / tools like ‘ Bhashini’ app can help.
Comparatively Lower literacy rate :
Different marketing strategies required : Due to vast change in lifestyle of rural and
urban customers.
Sales force management issues : They are reluctant to work in villages and rural
areas.
Distribution problem : leading to high distribution costs
Complex Logistical challenges. There are not adequate warehouses both in quantity
and quality.







Participatory Rural Appraisal (PRA)
What is PRA process?
 PRA is primarily a process of problem solving wherein

the local residents are given agency over the
identification of the problem, the creation of a solution,
and (in some cases), the final project implementation and
post-construction monitoring.

PRA process :

 Rapidly expanding IT Penetration in Rural

India
 Continuous improvement in Infrastructure





Indian marketers as well as multinationals, such as Colgate-

Palmolive, Godrej and Hindustan Unilever have focused on
rural markets.
Thus, looking at the opportunities, 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.

Strategies For Rural Market ( Contd. )
A. PRODUCT STRATEGIES FOR RURALMARKET AND RURAL CONSUMERS
1. Small Unit And Low Priced Packing :

Larger pack sizes are out of reach for rural consumers because of their
price and usage habits. This method has been tested by other
products like shampoos, biscuits, pickles, vicks five gram tins,etc.
In this strategy of keeping the low priced packed products, the
objective is to make the product available at lower price so that the
entire rural community can try. This may not be possible in all types
of products, but wherever this can be resorted to, the market is bound
to expand.

2. New Product Designs :

A close observation of rural household items indicates the
importance of redesigning or modifying the products.
The manufacturing and marketing teams must think in terms of

new product designs specially meant for rural areas keeping
their lifestyles in view.

3. Sturdy Products
Sturdiness of a product either in terms of weight or appearance is an
important fact for rural consumers. The product meant for rural areas should
be sturdy enough to stand rough handling and bad road conditions.
People in rural areas like bright flashy colours such as red, blue, green etc.,
and feel that products with such colours are not only sturdy and strong but are
of more utility.
Example : Bullet M/cycle has been very much in demand in rural areas for
more than last 50 years mainly because of it’s sheer looks and strong built.

3. Sturdy Products

4. Brand Name
The rural consumers are more concerned with the utility of the
products. The brand name awareness in the rural areas is
growing. A brand name and/or logo is very essential for rural
consumers for it can be easily remembered.

B. PRICING STRATEGIES
Pricing strategies are very much linked to product strategies.
1. Low Cost/Cheap Products :
This is a common strategy being adopted widely by many
manufacturing and marketing teams. Price can be kept low by
small unit packing.
2. Avoid Sophisticated Packing :
Simple packing can be adopted to bring down the cost as it is
presently being done in the case of biscuits. Continuous
innovations in packing technology will be very much required in
future for rural markets.

PRICING STRATEGIES
3. Refill Packs/Reusable Packaging
Such measures have a significant impact on the rural market.
Price can be reduced by using such technology. In addition the
packaging material used should preferably lend itself for reuse
in rural areas.
An ideal example in this direction can be the packing
of fertilizers in LDPE or HDPE sacks, which are not only tamper
proof but also reusable.

PRICING STRATEGIES
4. Application Of Value Engineering
Using raw material without sacrificing the quality or

functional efficiency of the product
For example in food industry, 'soya protein is being used
instead of milk protein. Milk protein is expensive while
soya protein is cheaper but the nutrition value is same.

PRICING STRATEGIES
4. Application Of Value Engineering …. Contd.
This technique yields itself for application in many engineering

processes or product designing so that the price can be kept at an
affordable level. These areas have to be explored by manufacturing
and marketing teams in the context of rural markets.
The pricing strategy for rural market will depend upon the scope for
reducing the price of the product to suit the rural incomes and at the
same time not compromising with the utility and sturdiness of
the product.

C. DISTRIBUTION STRATEGIES
Most manufacturers and marketing teams have a distribution

arrangement for villages with population of atleast 5000.
While it is essential to formulate specific strategies for distribution in

rural areas, the characteristics of the product, it’s shelf life and other
factors have to be kept in mind.
The distribution strategies that are specifically designed for rural areas
are generally implemented through co-operative societies, public
distribution system (PDS), multi-purpose distribution centres,
distribution upto feeder markets / mandi towns shanties/ haats /
jathras/ melaas, agricultural input dealers etc.

C. DISTRIBUTION STRATEGIES
The Gujarat Cotton Cooperative Marketing Societies set a good
example of vertically integrated market. The cooperative marketing
institutions have to introduce scale economies in their marketing
operation and provide efficient and comparable services to the
customers in competition with the private trade.
Cooperative institutions would do better if the state level marketing

federations enter into multi level activities to improve the turnover of
their business. The non-governmental organizations can play a key
role in motivating the rural people to form cooperatives highlighting
the possible benefits without being exploited.

D. PROMOTION STRATEGIES
Mass media is a powerful medium of communication. It
could be television, Cinema, print media, radio, social media
and so on. Careful selection of the medium will fetch better
results.
The other means of mass media available are

hoardings/wall paintings, shanties/haats/melaas, non-price
competition, special campaigns, hand bills and booklets,
posters, stickers, banners of the schemes etc.

Using Big Data:

Big data is a technology that may change the face of rural marketing. As smartphones
become cheaper and popular in rural areas, consumers will leave data trails about their
online activities. Analyzing such data will give companies insights into consumer
behaviour and to identify micro-markets.
The companies will have to slice and dice geography into hundreds of micro-markets
and identify areas that are underexploited or find the pockets of prosperity, and then
deploy their sales force to those areas.
The process involves combining and analyzing huge amounts of data on villages,
customers and competitors to identify communities, for which solutions are developed.

Process for pursuing a micro-market strategy
 Create an ‘opportunity map’ of potential areas by using

internal and external data sets from a number of sources.
 Data analytics is used to build a picture of the future
opportunity.
 Examine why markets vary across areas and look at
drivers of consumer behaviour.
 Growth opportunities can thus be spotted.

Getting data for villages :
 With improved data gathering techniques, data can be

collected from government and other NGOs.
 Sales and marketing teams will have to work together

with data analysts to identify and create solutions for
each micro-market which can be a village or village
cluster, or homogenous groups within a village.
 Identifying salespeople, opinion leaders, local

communities and other partners who can help
implement the strategy in each village.

Getting data for villages :
 Products testing : with different price points and service

bundles to see which would work best.
 Make sales route plans so that salespeople do not have

to travel far from their homes.
 Train the salesforce on how to use the opportunity map

to approach the villages.

� The solution revolution can be seen as an interaction

between three crucial factors:
1. Wave-Makers.
2. Disruptive Technologies.
3. Business Models.
All three have to operate simultaneously.

End of Chapter 10
Thanks.
Dhirendra Apte
Symbiosis Center for Management Studies

TY BBA : Sem 5 - Fundamentals of Rural Marketing

Dhirendra Apte

TY BBA : Sem 5 Fundamentals of Rural Marketing
Dhirendra Apte

Dhirendra Apte

TY BBA : Sem 5 Fundamentals of Rural Marketing

SYMBIOSIS Unit 10 - Future Direction of Rural Marketing

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Prof.

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

 Rural markets have gained significance which will lead

Symbiosis Centre for Management Studies

 At a time when recession-hit multinationals are

Symbiosis Centre for Management Studies

and their very approach of doing business. They stand a

solution-focused and action-oriented mindset towards

barred approach will be required rather than the narrow,

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

‘Go rural’ is the marketer’s new slogan.

Indian marketers as well as multinationals, such as Colgate-

Thus, looking at the opportunities, which rural markets

Symbiosis Centre for Management Studies

‘Go rural’ is the marketer’s new slogan.

According to market research expert Nielson, by 2025, the

Symbiosis Centre for Management Studies

 Steady growth in average Income Levels : The

 Growing Access to Information :

 Growing Awareness : Due to more and more penetration of

Symbiosis Centre for Management Studies

This will help rural consumers for making better

Symbiosis Centre for Management Studies

What is the future of rural marketing?

 Transformation of companies into social enterprises and

 Technological advancements that bring rural consumers

Symbiosis Centre for Management Studies

 Rural markets have a lot of potential especially for FMCG

 Majority of these markets are not fully explored and so

 Marketers are steadily realizing this and have started to

Symbiosis Centre for Management Studies

Some of the limitations of rural marketing in India are mentioned below -

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

 PRA is primarily a process of problem solving wherein

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

 Rapidly expanding IT Penetration in Rural

 Continuous improvement in Infrastructure

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

Symbiosis Centre for Management Studies

‘Go rural’ is the marketer’s new slogan.

Indian marketers as well as multinationals, such as Colgate-

Thus, looking at the opportunities, which rural markets offer to

Symbiosis Centre for Management Studies

Strategies For Rural Market ( Contd. )

A. PRODUCT STRATEGIES FOR RURALMARKET AND RURAL CONSUMERS

1. Small Unit And Low Priced Packing :

Symbiosis Centre for Management Studies

2. New Product Designs :

The manufacturing and marketing teams must think in terms of

Symbiosis Centre for Management Studies

Strategies For Rural Market ( Contd. )