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Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas. Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. Rural areas of the country or countryside are areas that are not urbanized, though when large areas are described country towns and smaller cities will be included. They have a low population density, and typically much of the land is devoted to agriculture
OBJECTIVE OF THE STUDY
• • •
To analyze the opportunities which rural marketing offers to marketers. To find out the various challenges that marketer face while doing rural marketing. To analyze various techniques of marketing in rural scenario.
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: A major part of rural marketing falls into this category. 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: Transactions in this category basically fall under agricultural marketing where a rural producer seeks to sell his produce in an urban market. An agent or a middleman plays a crucial role in the marketing process. The following are some of the important items sold from the rural to urban areas: seeds, fruits and vegetables, milk and related products, forest produce, spices, etc. 3. Rural to Rural: This includes the activities that take place between two villages in close proximity to each other. The transactions relate to the areas of expertise the particular village has. These include selling of agricultural tools, cattle, carts and others to another village in its proximity. Rural marketing requires the understanding of the complexities. Indian agricultural industry has been growing at a tremendous pace in the last few decades. The rural areas are consuming a large number of industrial and urban manufactured products. The rural agricultural production and
consumption process plays a predominant role in developing the Indian economy. This has designed a new way for understanding a new process called Rural Marketing. The concept of rural marketing has to be distinguished from Agricultural marketing. Marketing is the process of identifying and satisfying customers needs and providing them with adequate after sales service. Rural marketing is different from agricultural marketing, which signifies marketing of rural products to the urban consumer or institutional markets. Rural marketing basically deals with delivering manufactured or processed inputs or services to rural producers, the demand for which is basically a derived outcome. Rural marketing scientists also term it as developmental marketing, as the process of rural marketing involves an urban to rural activity, which in turn is characterised by various peculiarities in terms of nature of market, products and processes. Rural marketing differs from agricultural or consumer products marketing in terms of the nature of transactions, which includes participants, products, modalities, norms and outcomes. The participants in case of Rural Marketing would also be different they include input manufacturers, dealers, farmers, opinion makers, government agencies and traders. Rural marketing needs to combine concerns for profit with a concern for the society, besides being titled towards profit. Rural market for agricultural inputs is a case of market pull and not market push. Most of the jobs of marketing and selling are left to the local dealers and retailers. The market for input gets interlocked with other markets like output, consumer goods, money and labour. Rural marketing in India is not much developed there are many hindrances in the area of market, product design and positioning, pricing, distribution and promotion. Companies need to understand rural marketing in a broader manner not only to survive and grow in their business, but also a means to the development of the rural economy. One has to have a strategic view of the rural markets so as to know and understand the markets well. In the context of rural marketing one has to understand the manipulation of marketing mix has to be properly understood in terms of product usage. Product usage is central to price, distribution, promotion, branding, company image and more important farmer economics, thus any strategy in rural marketing should be given due attention and importance by understanding the product usage, all elements of marketing mix can be better organised and managed.
Phase III (Post-liberalization period on 20th century): 6 . 2. due to the advent & spread of the Green Revolution. Phase II (Green Revolution to Pre-liberalization period): During these times. rural marketing represented marketing of agriculture inputs in rural markets & marketing of rural produce in urban areas.Sixties (Green revolution to Preliberalization period) Mid. Rural marketing then referred to the marketing of rural products in rural & urban products.Evolution of Rural Marketing MAJOR PRODUCTS Agricultural Produce SOURCE MARKET Rural DESTINATION MARKET Urban PHASE I ORIGIN Before Mid1960 (from independence to green revolution) Mid. 3.Nineties (Postliberalization period on 20th century) FUNCTION Agricultural Marketing II Marketing Of Agricultural Inputs Agricultural Inputs Urban Rural III Consumables Rural Marketing And Durables For Consumption & Production Developmental marketing All products & services Urban & Rural Urban & Rural Urban & Rural Rural IV 21st century 1. Phase I ( from Independence to Green Revolution): Before the advent of the Green revolution. the nature of rural market was altogether different.
In this period. but they should also aim at creating an environment for this to happen. By and large this rise in purchasing 7 . social mobility.The third phase of rural marketing started after the liberalization of the Indian economy. not through atand-alone products or services. peoples & their occupations. the purchasing power of the rural people has increased due to increase in productivity and better price commanded by the agricultural products. rural marketing represented the emerging. because of scientific agriculture. the changing life style and consumption pattern of villagers with increase in education. made the companies to think about new potential markets. the focus of marketers in India was the urban consumer and by large number specific efforts were made to reach the rural markets. Because of all these factors. advertisers and multinational companies. Thus. According to a recent survey conducted by the National Council for Applied Economic Research (NCAER). if an organization wants to tap the real potential of the rural market. Increase in competition. Phase IV (21st century): Learning from its rural marketing experiences after the independence. Indian rural markets have caught the attention of many companies. saturated urban markets. The objective of rural marketing in the current phase is the improvement of the quality of life by satisfying the needs & wants of the customers. Till recently. 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 world and hence their outlook to life has also changed. And. Its approach & strategies must not focus in just selling products & services. but by presenting comprehensive & integrated solutions which might involve a set of inter-related products & services. coupled with increase in purchasing power. it needs to make a long-term commitment with this market. distinct activity of attracting & serving rural markets to fulfill the need & wants of rural households. rural India in now attracting more and more marketers. 4. the corporate world has finally realized the quick-fix solutions & piecemeal approaches will deliver only limited results in the rural markets. But now it is felt that with the tempo of development accelerating in rural India. more and move new products demanding urban customers.
carrying out after sales service that leads to customer satisfaction and repeat purchase/sales. Britannia and even Multinational Companies (MNCs) like Pepsi. government regulation on pricing has created disposable incomes. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages. good monsoon. Rural Marketing broadly involves reaching the rural customer. But the new tax structure. Coming to the frame work of Rural Marketing. Nature of Rural Market Large. L. the income of the rural masses is directly affected. Rising literacy levels: It is documented that approximately 45% of rural Indians are literate. In the event of a crop failure. Diverse and Scattered Market: Rural market in India is large.power remains unexploited and with the growing reach of the television. low per capital income. Philips. Rural marketing has become the latest mantra of most corporate. it is now quite easy for the marketers to capture these markets. supply of goods and services to meet their requirements. understanding their needs and wants.. Change is a continuous process but most rural people accept change gradually. Cavin Kare are all eyeing rural markets to capture the large Indian market. They are also educating themselves on the new technology around them and aspiring for a better lifestyle. Standard of Living and rising disposable income of the rural customers: It is known that majority of the rural population lives below poverty line and has low literacy rate. societal backwardness.G. Hence awareness has increases and the farmers are well-informed about the world around them. low savings. Major Income of Rural consumers is from Agriculture: Rural Prosperity is tied with agriculture prosperity. Traditional Outlook: Villages develop slowly and have a traditional outlook. and scattered into a number of regions. Today the rural customer spends money to get value and is aware of the happening around him. Coca Cola. Companies like Hindustan Lever. 8 . etc. There may be less number of shops available to market products. Colgate Palmolive.
and financial facilities are inadequate in rural areas. societal concept Catalytic and transformation agent Social change Social innovations and communications Socio-cultural. Diverse socioeconomic background: Due to dispersion of geographical areas and uneven land fertility. 6. communication system. Infrastructure Facilities: The infrastructure facilities like cemented roads. Transactional Vs Development Marketing S. corporate enterprises. 5. 1. benefactors Development projects/schemes/programs Beneficiaries and buyers 9 . Table brings out the differences in brief. which ultimately affects the rural market. rural people have disparate socioeconomic background. voluntary agencies. Is rural marketing transactional or developmental in its approach? It is true. warehouses. Role Focus Key task Nature of activity Participants Offer Target group Stimulating and conversional marketing Product-market fit Product innovations and communications Commercial Corporate enterprises. 8. economic Government. Aspect Concept Transactional Consumer orientation. Marketing concept 2. It is more a process of delivering better standard of living and quality of life to the rural environment taking into consideration the prevailing village milieu. Sellers Products and services Buyers Development Society orientation. rural markets have become an attractive proposition for commercial business organizations.No. Transactional Vs Developmental: For better comprehension of this role let us distinguish development marketing and transactional marketing. 4. 3. Hence physical distribution is a challenge to marketers who have found innovative ways to market their products. The role of rural marketing as such is more developmental than transactional. 7.
Communication Goal Functional Profits Customer satisfaction Brand image Short-medium Profit-motive Business policy Developmental Market development Corporate Image Medium-Long Service-motive Ideological or Public policy 11. Initiation and management of social and economic change in the rural sector is the core of the rural marketing process.9. It should serve to resolve social conflicts. • Innovation is the essence of marketing. 12. Such a change narrows the rural-urban divide. • The exposure of ruralites to a variety of marketing transactions during the change process puts them in the role of beneficiaries than of just `buyers' of modern inputs and infrastructural services. Another critical point for communication is the point of conversion of ruralite from an "induced beneficiary" to an "autonomous buyer". Innovative methods of social change for successful transformation of traditional society are virtual. • Rural marketing process is both a catalyst as well as an outcome of the general rural development process. 10. The growth of the rural market can be a planned evolutionary process based on strategic instruments of change rather than constitute just short-term opportunities for commercial gains. Classification of rural consumers The rural consumers are classified into the following groups based on their economic status: 10 . Time-Frame Motivation Model: The model of rural marketing represents a combination of the transactional and developmental approaches. encourage cooperation and strengthen competitive spirit during interactions between rural and urban as well as within rural areas. • Communication is the vital element of rural marketing. It becomes in this process both benefactor and beneficiary. • The process of transformation can be only evolutionary and not revolutionary.
Purchasing power is less. The farmers of Bihar and Orissa fall under this category. Roadblocks of Indian Rural Markets There are several roadblocks that make it difficult to progress in the rural market. Standard of living: The number of people below the poverty line is more in rural markets. but strength is more. logistics. Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this group. They have affordability but not form a demand base large enough for marketing firms to depend on. Farmers cultivating sugar cane in UP and Karnataka fall in this category. Marketers encounter a number of problems like dealing with physical distribution. proper and effective deployment of sales force and effective marketing communication when they enter rural markets. They receive the grants from government and reap the benefits of many such schemes and may move towards the middleclass. Thus the market is also underdeveloped and marketing strategies have to be different from those used in urban marketing. 1. • The Poor: This constitutes a huge segment. 11 . The major problems are listed below. • The Middle Class: This is one of the largest segments for manufactured goods and is fast expanding.• The Affluent Group: They are cash rich farmers and a very few in number.
A lot of spurious brands or look-alikes are available. Ineffective distribution channels: The distribution chain is not very well organized and requires a large number of intermediaries. the rest of the rural markets do not even have a proper road linkage which makes physical distribution a tough task. Many a time the rural customer may not be aware of the difference due to illiteracy.2. Low literacy levels: The low literacy levels in rural areas leads to a problem of communication. who are not easily available for rural areas. which in turn increases the cost and creates administrative problems. 6. as there is hardly any organized agency to look after the storage issue. Spurious brands: Cost is an important factor that determines purchasing decision in rural areas. Lack of communication system: Quick communication is the need of the hour for smooth conduct of business. manufacturers are reluctant to open outlets in these areas. different behaviour and language of the respective areas make it difficult to handle the customers. Low per capita income: Agriculture is the main source of income and hence spending capacity depends upon the agriculture produce. 3. Traits among the sales force are required to match the various requirements of these specific areas. which may be a problem for effective communication. 12 . Many languages and diversity in culture: Factors like cultural congruence. Demand may not be stable or regular. about 50% of Indian villages are connected by roads. Warehousing is another major problem in rural areas. Most marketers use tractors or bullock carts in rural areas to distribute their products. The services rendered by central warehousing corporation and state warehousing corporations are limited only to urban and suburban areas. However. Transportation and warehousing: Transportation is one of the biggest challenges in rural markets. This is a challenge to the marketers. As far as road transportation is concerned. Due to lack of proper infrastructure. 8. 7. 4. The literacy rate in the rural areas is rather low and consumer’s behaviour in these areas is traditional. Print media has less utility compared to the other media of communication. Many villages are located in hilly terrains that make it difficult to connect them through roads. but it continues to be a far cry in rural areas due to lack of communication facilities like telegraph and telecommunication systems etc. They are mainly dependent on dealers. providing a low cost option to the rural customer. 5.
There are more than 600. Seasonal demand: Demand may be seasonal due to dependency on agricultural income. Thus utmost care in terms of understanding consumer psyche needs to be taken while marketing products to rural India. in different parts of India. Harvest season might see an increase in disposable income and hence more purchasing power. colours. Villagers react differently to different products.9.000 villages in the country as against about 300 cities and 4600 towns. sizes. The consumer market in this case is Rural India. 10. Consumers in this huge segment have displayed vast differences in their purchase decisions and the product use. 13 .individuals and households who buy goods and services for personal consumption. About 70% of India’s population lives in rural areas. Rural Consumer Behaviors Consumer Buyer Behaviour refers to the buying behaviour of final consumers . Dispersed markets: Rural population is highly dispersed and requires a lot of marketing efforts in terms of distribution and communication. etc. All of these final consumers combined make up the consumer market.
Thus. so that marketers can reach this huge untapped segment. 2. has a very strong influence on the buyer behavior. villages in South India accept technology quicker than in other parts of India. becomes an attractive proposition. what the customer will be able to buy. More than 70% of the people are in small-scale agricultural operation. Creative use of product ex Godrej hair dye being used as a paint to colour horns of oxen. Geographic influences . water supply affects demand for durables. Factors influencing buying behavior The various factors that affect buying behavior of in rural India are: 1. These factors affect the purchase decision. Industry observers are increasingly realizing that at times. variety & price) Companies need to assess the influence of retailers on both consumers at village shops and at haats.Thus. Family size & the roles played by family members exercise considerable influence on the purchase decisions. agriculture is the primary occupation. 6. Economic factors – The quantum of income & the earning stream are one of the major deciding factors.The environment or the surroundings. For instance. egs. HMT sells more winding watches in the north while they sell more quartz watches down south. within which the consumer lives. which determine to a great extent. Washing machine being used for churning lassi. Electrification. The study of product end 14 . it is important to study the thought process that goes into making a purchase decision. 3. purchase of durable has less to do with income. but has more to do with the size of the family & that’s where rural India with joint family structures. 5. Many people in the rural market are below poverty line & for large number of people.The geographic location in which the rural consumer is located also speaks about the thought process of the consumer. Environmental of the consumer . Family – it is an important buying decision making organization in consumer markets. 4. Place of purchase (60% prefer HAATS due to better quality.
Villagers used to buy one Lifebuoy cake and cut it into smaller bars. For example. was not well accepted. Thus Philips makes audio systems. 7. design. For example. Social practices: There are so many different cultures. Decision-making by male head: The male in Indian culture has always been given the designation of key decision maker. For example. the acceptance was higher. the Mukhiya’s opinion (Head of the 15 . Another good example would be Philips audio systems. the Tata Sumo. which only goes on to make the marketer’s job tougher. there are so many different cultures. The marketer needs to understand the role played by the buyer’s culture. and shape): There are many examples that support this point. That is the main reason for the large acceptance of big audio systems. This helped lifebuoy to introduce smaller 75-gram soap bars. Brand preference and loyalty (80% of sale is branded items in 16 product categories) Cultural factors influencing consumer behaviour Cultural factors exert the broadest and deepest influence on consumer behaviour. size. a.provides indicators to the company on the need for education and also for new product ideas. which are big in size and get accepted in rural India by their sheer size. when the same Sumo was re-launched as Spacio (a different name) and in a bright yellow colour. 2. which was launched in rural India in a white colour. Product (colour. Some of the few cultural factors that influence buyer behaviour are: 1. However. in a few villages they have common bath areas. In India. which could be used individually. the viewpoint is totally opposite. with a larger seating capacity and ability to transport good. 3. b. Culture is the most basic element that shapes a person’s wants and behavior. in rural India. and each culture exhibits different social practices. Urban India looks at technology with the viewpoint of ‘the smaller the better’. But however.
poor roads. Even in a house the male head is the final decision maker. power problems. Changes in saving and investment patterns From gold. and inaccessibility to conventional advertising media. LCV’s 4 A’s approach of Indian Rural Market The rural market may be appealing but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income.village). 4. 700 million Indians may live in rural areas.2 million sq km. In rural areas. to tractors.000 villages are spread over 3. The more daring MNC’s are meeting the consequent challenges of availability. However. acute dependence on the vagaries of the monsoon. land. acceptability and awareness (the so-called 4 A’s) » Availability The first challenge is to ensure availability of the product or service. large number of daily wage earners. affordability. finding them is not 16 . in most cases. VCR’s. seasonal consumption linked to harvests and festivals and special occasions. the rural consumer is not unlike his urban counterpart in many ways. India's 627. is shared with the rest of the village. this trend is very prominent.
a powdered soft-drink concentrate. However. To ensure full loads. Most of the shampoos are available in smaller packs. once a week. These distributors appoint and supply. given the poor state of roads. Fair Glow and Godrej in 50-gm packs. Lifebuoy at Rs 2 for 50 gm.easy. among the first MNC’s to realize the potential of India's rural market. Hindustan Lever. Coca-Cola has also introduced Sunfill. Bihar and Uttar Pradesh — the so-called `Bimaru' States. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. has launched a variant of its largest selling soap brand. Hindustan Lever. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multi serve sachet of 200 gm priced at Rs 15. Over the years. smaller distributors in adjoining areas. priced at Rs 4-5 meant specifically for Madhya Pradesh. the company depot supplies. LG has set up 45 area offices and 59 rural/remote area offices. » Affordability The second challenge is to ensure affordability of the product or service. which considers rural India as a future growth driver. Marketers must trade off the distribution cost with incremental market saturation. Coca-Cola. 17 . Some companies have addressed the affordability problem by introducing small unit packs. With low disposable incomes. twice a week. Colgate toothpaste launched its smaller packs to cater to the travelling segment and the rural consumers. To service remote village. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5.Godrej recently introduced three brands of Cinthol. bullock-carts and even boats in the backwaters of Kerala. most of who are on daily wages.000. has built a strong distribution system which helps its brands reach the interiors of the rural market. products need to be affordable to the rural consumer. India's largest MNC. Any serious marketer must strive to reach at least 13. To tap these unexplored country markets. stockiest use autorickshaws. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. The move is mainly targeted at the rural market. large distributors which who act as hubs. it is an even greater challenge to regularly reach products to the far-flung villages.113 villages with a population of more than 5. Fair and lovely was launched in a smaller pack. has evolved a hub and spoke distribution model to reach the villages. a subsidiary of Unilever.
Consumption of branded products is treated as a special treat or indulgence. Fortunately. It was a runway hit selling 100. With large parts of rural India inaccessible to conventional advertising media — only 41 per cent rural households have access to TV — building awareness is another challenge. there is a need to offer products that suit the rural market. However. however. The insurance companies that have tailor-made products for the rural market have performed well. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan.» Acceptability The third challenge is to gain acceptability for the product or service. Because of the lack of electricity and refrigerators in the rural areas. » Awareness Brand awareness is another challenge. the family is the key unit of identity. the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer. the family is the key unit of identity. the rural consumer expressions differ from his urban counterpart. In 1998. which is trying to push its soap brands into the interior areas. One company which has reaped rich dividends by doing so is LG Electronics. Fortunately. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.000 sets in the very first year. it developed a customized TV for the rural market and christened it Sampoorna. However. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or luxury. Therefore. the rural consumer expressions differ from his urban counterpart. Hindustan Lever relies heavily on its own company-organized media. Godrej Consumer Products. 18 . uses radio to reach the local people in their language. Coca-Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets. The company tied up with non-governmental organizations and offered reasonablypriced policies in the nature of group insurance covers.5 crores in total premium. These are promotional events organized by stockiest. however. the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer.
If such a distinction is not made. Being able to successfully tap this growing market is every marketer’s dream. posters and tapped all the local forms of entertainment. cinema and radio to reach 53. LG Electronics uses vans and road shows to reach rural customers. individual subsets of this market tend to be rather small and disparate. Geographical. statistical. Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media. The key dilemma for MNC’s ready to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. The rural market is not homogeneous. Marketing Mix for Selling to Rural Indians 12. Put in a different context. The company uses local language advertising. Since price is a key issue in the rural areas.2% of the world lives in Rural India. 19 . demographical. we will be unable to distinguish between the serpent and the rope and the rope and the serpent. A clear distinction needs to be made with regard to the reality versus the image of rural India. myths abound.Coca-Cola uses a combination of TV. logistical differences are very apparent. India’s rural markets are often misunderstood. Positioning and realities regarding the potential of each of these market segments differ and lie at the very core of forming the strategy for the rural markets.6 per cent of rural households. It has also used banners. which alone reached 41 per cent of rural households. However. Though the aggregate size is very large. Philips India uses wall writing and radio advertising to drive its growth in rural areas. this works out to 1 in 8 people on Earth. It doubled it’s spend on advertising on Doordarshan.
This has radically changed the economics of farming. strong rose or jasmine perfumes are very popular with the rural women in South India. Further. potential markets need to be found and at times. For instance. with the investment in these systems lowering the cost of cultivation.fold. The aspirants are becoming climbers showing a sustained economic upturn as purchasing power is increasing in the rural markets. including green house cultivation. Moreover. fert-irrigation and hydroponics. As demand in several categories is being created. marketers need to think. The growing incomes have modified demand patterns and buyer behaviour. even created. Sachetization is also a distinctly rural-driven phenomenon. Farmers in states like Maharashtra and Andhra Pradesh have reaped the benefits of adopting new age farming practices. 20 . The proportion of very rich has increased five. However. rural folk would use a shampoo only once a week. the need for a product or service is now adequately backed up with the capacity. Product The Rural market is not a homogenous set of customers with preferences frozen in time. It is therefore essential to develop an accurate Marketing Mix for selling to rural Indians. marketers must identify the typical rural specific needs. When developing products in any category. Urban products cannot be dumped onto rural markets without modifications. intensity of use is quite low. increasing yields due to integrated crop management practices and reducing the dependence on rainfall. Tailor-made products are better received by the rural audience as the consumers feel empowered and tend to dentify with the offering. To increase market share. As a result.The face of Indian agriculture is changing from dry land and irrigated agriculture into high-tech and low-tech agriculture. Such creation of demand needs efficient management of the supply chain. behavioural change needs to be at the forefront of any strategy. At most times. The urban women do not identify as strongly with these perfumes. shampoos or soaps with distinctive. Habits take time to change and making unit sachet packs affordable is the key to inducing trial and purchase. On average. due to the diversity of this market. the market still remains largely unexploited. ability and willingness to pay. plan and act locally. disposable income has grown sharply.
Thus for any company wishing to develop its product portfolio. Pricing Every marketer must realize that the rural consumer is not a miser. Price sensitivity is extremely high and comparison with competitive prices is common. insecticides and pesticides. However.. with the objective of offering the lowest possible price. This has severely restricted the availability of cost effective specialty fertilizers of global standards to Indian farmers. He is not simply looking for the cheapest product in every category. whose needs are recognized and for which the consumer is willing to pay (value-adding features). This would “redefine value” in the minds of the consumer and tremendously increase product acceptability.Alliances . though levels of deficiency of nutrients have increased significantly over the past decade. He understands and demands value for money in every purchase that he makes. their buying criteria. This is not what a rural consumer wants. i. Product life cycles as are becoming shorter and these are having their impact on company life cycles.e. In the case of fertilizers for instance. This would be a major policy initiative that would give a huge impetus to innovative product development in the farm sector. Pricing therefore is a direct function of factors including cost-benefit advantage and opportunity cost. What is required is to introduce a product with ‘essential’ features. A move to liberalize the sector could perhaps consider the accepted worldwide norm of allowing manufacturers with a strong R&D base to decide their own formulations with the government machinery conducting checks on market samples of finished products to ensure that they live up to the labelled specifications. A common error has been to launch a completely stripped down version of the urban product in the rural market.Linkages is a basis for survival. Consumers seem to create narrow psychological price bands in their minds for product 21 . in-depth research that can help understand the depths of the mind of the villagers. features which a consumer is unwilling to pay for as he sees no obvious utility. purchase patterns and purchasing power are an essential input while developing rural specific products or services. Pricing offered to consumers should be for value offerings that are affordable.Systematic. no significant changes in formulations notified under the Fertilizer Control Order have taken place. farmers using modern farming practices are unable to get an assured supply of such farm inputs due to draconian legislation. Product development is severely constrained by legislation in the case of agricultural inputs like fertilizers. allegiance to the classic American P-AL Principle of Partnership . Technological know-how for manufacture of such fertilizers exists within the country. Product developers should aim at eliminating all the cost-adding features.
Demonstrations are undoubtedly the most effective promotional tool that shapes purchase decisions of the rural population. however. one fact is certain across all areas. The classic conundrums of reach and coverage of the media are shattered. Impulse buys and purchases for conspicuous consumption are also extremely few and far Between considering the “value for money” factor that reigns supreme in most rural purchase decisions. The perceived utility or value of the product or service is the ultimate decision making factor. It must be remembered that the rural consumer does not have a budget problem. These barriers stem from the fact that rural markets vary immensely in terms of tastes. marketers need to provide financial products. in the lean season when there is a cash flow crunch. Technology must be used to prepare a database of customers and their requirements. However. At all times. At these times. habits and preferences leading to different expectations of every segment of the population. This is required because a large proportion of the rural population cannot read or write. He has a cash flow problem. it is “buying smart”. It is certain however. the unit price is critical and so is the pack size. The rural consumer likes to touch and feel a product before making a choice. Several creative communication media have been used by various companies to tackle the problem of having to use visual communication and non-verbal communication to reach the rural audience. panchayats. It has in fact become a medium to attract larger audiences for a product demonstration.groups and price elasticity beyond the extreme price points is very high. post offices and police stations for advertising have also helped immensely. experience has proved time and time again that word of mouth is the key influencer. In today’s information era. 22 . he is capable of making high volume purchases. it is very important for companies to wise-up on emerging technologies. Rather. dharmsalas. Because of this. The use of video using mobile vans and even large screen video walls at events should be arranged. Alliances with cottage industries. This is because the village folk receive funds only twice a year. that buying cheap is not the primary objective. Promotions & Advertising There are a lot of barriers that militate against homogenous media and message delivery. More importantly. Demonstrations establish the credentials of any new technology used in developing the product. A study revealed that the average rural consumer takes approximately 2 years to decide on buying a watch! He will not do so unless he is totally convinced that he is getting value for Money. schemes or solutions that suit the needs of the rural population. in rural India.
This becomes all the more important when in rural India. the overlap between the product categories sold in a single outlet in tremendous.influencer. The use of local idioms and colloquial expressions are an excellent way to strike a rapport with the rural consumer and must be borne in mind when developing media plans and public relations programmes. Rural youth bring brand knowledge to the households. There are other attributes in the promotion strategy which are explained as under: 1. free samples.The re-use capacity and colour of the container in which the product is packed is also a crucial factor. Another unique feature of rural markets is that the Decision making process is collective. This promotion strategy thus makes women influence purchase decisions that they would ordinarily not be involved in. In fact. Lucky draws and gift schemes are a major hit in most states. encourage spending.Intermediaries are the foundation to rural distribution. Mass media: In the present world mass media is a powerful medium of communication. more often than not. For instance. etc. Cinema 23 . The following are the mass media generally used: Television. Consumer and Trade schemes that Incentivise Spending using discount coupons. In such cases. several agribusiness companies have also started providing gift schemes with offers for free jewellery that influences the ladies to pressure the farmers to purchase agricultural inputs from select companies. Youth power is becoming increasingly evident in villages. So marketers must address brand messages in their campaigns at several levels. buyer. then the end user will not be allowed to forget. one who pays can all be different. decider. the point at which the customer actually comes in contact with a product may not be the point at which the sale is affected. reusable packaging is considered a major aid in promoting sales for products in the rural market. off season discounts. The rural consumer is very down to earth but equally discerning and marketers need to step into the shoes of the rural folk while creating product promotion campaigns. The companies must reinforce this highly effective medium and use all their innovation and money tom develop more dramatic point of sale and point of contact material. a store may call itself as a grocery store but will stock everything from groceries to vegetables to fertilizers and may at times even stock medicines. If the intermediary understands and is constantly reminded about your product. Apart from regular household goods. No high voltage publicity is required. This has forced several companies to change the focus and positioning of their products and services towards this segment that is growing in absolute number and relative influence. The persons involved in the purchase process .
000 a day. brand reminder and word of mouth. 3. On considering these questions. Is the audience at this mela fit for promotion of the product at hand? What are the psychographics of this audience? What is the motivational and behavioural impetus that brings visitors to each of these melas. Mandi and Mela magic At last count. its features. India witnessed over 50. There is however. The opinion leaders may be big landlords or politicians or progressive farmers. 50. visitors at these melas spend between Rs. for products that need concept marketing and those that have high prices. Tractor owners (tonee) conducted by MRF Limited is one such example. cultural festivals as well as local fairs and events. promotion at melas is like a “one night stand”. For example. package familiarity. There will 24 . This can be achieved only by personal selling by highly motivated sales person. On an average. Brooks Bond carries out marches in rural areas with band. 3 lakh people visited the annual mela at Navchadi which lasts for 7 days in Meerut. it has been observed that melas are fit to generate product exposure. In the words of Mr. a caveat when an organization is considering using mela for marketing their products. In fact the word of mouth information holds lot validity in rural areas even today. etc. stickers. This is because the time and the mood of the people that visit these melas are not right to digest technical information or for making large purchases.Radio Print media: Handbills and Booklets.000 to Rs. music and caparisoned elephants to promote their brand of tea. Managing Director of Multimedia Aquarius. such melas are not suitable promotion media. banners. uses and benefits. 2.000 melas. Of these 25. Neville Gomes. posters. An opinion leader in rural areas can be defined as a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. Personal selling and opinion leaders: In personal selling it is required that the potential users are identified and awareness is created among them about the product. This is the reason why opinion leaders and word of mouth are thriving among rural consumers. People come to melas to have a good time and are not reminded of such high technology or high priced products when they return home. Special campaigns: During crop harvest and marketing seasons it is beneficial to take up special promotion campaigns in rural areas. The largest such mela is the Maha Kumbh Mela which is visited by an average of 12 crore people.000 meals are held to signify religious. However. 5.
a large amount of qualitative judgment is indeed in planning promotions at melas by media planners.000 towns where these outlets are located.000 per outlet. A village as a place for promotion. Being present in 6 lakh villages is virtually impossible for an organization of any size. Most of the times. Place place is the major reason behind the evolution of rural marketing as a distinct discipline. the rural retailers themselves go to the urban areas to procure these goods. marketers are faced with the problem of feeding 3 million shops located in vastly diverse areas each of which records an average sale of only Rs. Thus. They do not expect such items to 25 . Rural markets imply complex logistical challenges that show up as high distribution costs. the most crucial link in ensuring the success of rural marketing efforts is distribution. On the other hand. but due to higher distribution costs. The distribution of outlets however shows that a marketer need not be present in all markets at all times. Urban India has only 4. Distribution must be strengthened and this would raise investment cost barriers for new entrants. district headquarters. Rural India’s 3 million outlets are located in 6. Rural distribution has a rigid hierarchy of markets that make channel decisions relatively structured. these products fails to reach the village as the distribution channel fails to put in the required efforts. Thus. The reason for this is very clear when we consider that on an average.3 lakh villages. as most of the products reach up to the nearest townships of any village. However. Reaching the right place is the toughest part in today’s rural marketing. assembly markets and such central locations. thus the general marketing theories can’t be applied directly in rural markets. Rural wealth and demand is concentrated typically at satellite towns.be no reminder later. the selection and use of distribution channels is a nightmare. It is essential for rural marketing companies to understand this hierarchy. distribution & consumption is very different from a town or city. Significance of Distribution No matter how well devised a company’s product.5. Rural folk are habituated to travelling once a week for their weekly purchases to a satellite town. Further compounding this problem is the fact that even this meagre sale is mostly on credit. Urban and Rural India both have approximately 3 million retail outlets. The diversity in the distribution of shops is the self-limiting factor in terms of servicing the rural distribution network. pricing or promotion strategy. In Rural India.
Haats are seen as a place for social. A lot of re-distribution also occurs through haats. 26 . This is because. They are a readymade distribution network embedded in the fabric of rural society for over 1000 years.be present in every village. 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit. more controllable. Typically. A television distributor must be present at assembly markets which are much smaller in number. Thus. Also attractive to companies wishing to use the system is the low selling overheads. Haats Haats are the nerve centre of Rural India. each haat serves 5 villages. a large number of retailers and subwholesalers buy from haats for their village stores. A study estimates that 47.1 to Rs. the purchase would be made in an assembly market for reasons of choice and availability of adequate cash flow. Participation fees at haats are a flat Re. Right from the time of Chandragupta Maurya. Distribution costs must be reduced through optimum utilization of the network.5 per stall and this rate is common to a giant like Hindustan Lever and the smallest local seller. Traditionally. cultural and economic interchange. in village shops a lot of credit sales occur due to the fact that in a small geographic area of a village. These rural super markets are much larger than all the world's K-marts and Wal-marts put together. easier to reach and service. Considering that the average population of an Indian village is approximately 1000. A TV will not be sold there as the cash flow does not exist at that point in the hierarchy of markets. They have been held on a regular basis across the length and breadth of the country for over 1000 years. A haat usually serves around 5000 visitors. In villages with less than 2000 people this figure reduces to 1 in 20 villages. It is therefore not necessary for a marketer of TV sets to take their distribution channel all the way down to the village shop. Considering that over 5000 visit a haat from 5 villages.000 haats are conducted in rural India. everybody knows everybody. Apart from the 90% cash sale. Keeping the hierarchy in mind will help decide the optimum level of penetration required to reach a critical mass of rural consumers. What is most attractive to marketers is that 90% + of sales in haats are on cash basis. After such sale of produce. an average haat will have close to 300 stalls. the system gets derelationalised. For durables where the outlay involved is typically large. they are cash rich and can afford to make such purchases. incorporating haats in the distribution strategy of a rural marketing organization selling consumer goods and FMCG products (typically once a week purchase items) is a tremendous opportunity. This is due to the fact that it is at assembly markets that auction yards are present where the farmers congregate to sell their output. One in every five villages with a population of over 2000 has a haat.
Focus on select villages. The dealers' feedback needs to be obtained as the direction for future strategy emanates here. 27 . Different product categories have different rural markets to cater to & these can be selected by applying different criteria of segmentation. MARKRTING STRATEGIES TO CAPTURE RURAL INDIA SEGMENTATION OF RURAL MARKET The first step is to develop & implement any strategy for the rural market should include the appropriate segmentation of the rural market. There is also a need to realise that the dealer is the company's "unpaid" sales force. The important thing is that appropriate segmentation basis need to be applied. Marketing in Rural India is undoubtedly a long-haul exercise and one that involves great expense. Only those with a strong mind. It is essential to educate and involve him as he is the local company representative and is the only member in the channel of distribution that is in direct contact with the final consumer.Perhaps the other most important factor to consider while developing rural distribution strategy is that the move from transactional marketing to relationship marketing is most evident in the village market. A strong bond needs to be created with every consumer even in the remotest village and the smallest town. a tough heart and stiff hands survive. The organization can do the following thing to start with: Focus on select markets.
this positioning of technology is very crucial. There is a trade of between Quality a customer perceives and a company wants to communicate. Thus. As a rural Indian customer always wanted value for money with the changed perception. 28 . they are exploiting social and cultural values. Their main focus is to change the Indian customer outlook about quality. However. rural customer started asking for value for money. even when they can use Neem or Babool sticks or Gudakhu. villagers are using soaps like Nima rose. Moreover. They are happy with such a high technology that can fulfil their need. rural people are emotional and sensitive. BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. Villagers are constantly looking forward for new branded products. They have started selling the concept of quality with proper communication. Cultural values play major role in deciding what to buy. What can one infer from these incidents. BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hold on the people. The perception of the Indian about the desired product is changing. BY TARGET CHANGING PERCEPTION If one go to villages they will see that villagers using Toothpaste. Breeze. one can notice difference in current market scenario. They aim for the basic functionality. Cinthol etc. is the paradigm changing and customer no longer price sensitive? Indian customer was never price sensitive. even when they can use locally manufactured very low priced soaps. Thus. They are ready to pay premium for the product if the product is offering some extra utility for the premium. but they want value for money. BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local language for promoting their products. to promote their brands. With their promotion. They do not see any value in frills associated with the products. if the seller provides frills free of cost they are happy with that. Now they know the difference between the products and the utilities derived out of it.BY COMMUNICATING AND CHANGING QUALITY PERCEPTION Companies are coming up with new technology and they are properly communicating it to the customer.
all the best". BY PROMOTING INDIAN SPORTS TEAM Companies are promoting Indian sports teams so that they can associate themselves with India. Whirlpool has also launched a campaign during world cup. With this. which has captured the market. "Nokia" has launched a simple product. Similarly. BY TALKING ABOUT A NORMAL INDIAN Companies are now talking about normal India. BY ASSOCIATING THEMSELVES WITH INDIA MNCs are associating themselves with India by talking about India.As "Motorola" has launched. with the India tri-colour and a ringing tone of "Sare Jahan se achcha". during world cup they have launched a campaign "Jeeta hai jitega apna Hindustan India India India". It is a normal tendency of an Indian to try to associate him/her with the product. Nokia has designed a new cellular phone 5110. That is why companies like Daewoo based their advertisements on a normal Indian family. he /she become loyal to it. by explicitly saying that they are Indian. LG has launched a campaign "LG ki Dua. seven models of Cellular Phones of high technology but none took off. ITC is promoting Indian cricket team for years. On the other hand. If he/she can visualize himself/herself with the product. M-TV during Independence Day and Republic daytime make their logo with Indian tri-colour. Diana Hyden and Shahrukh Khan are chosen as a brand ambassador for MNC quartz clock maker "OMEGA" even though when they have models like Cindy Crawford. actors for advertisements as this helps them to show themselves as an Indian company. BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS Companies are picking up Indian models. BY DEVELOPING RURAL-SPECIFIC PRODUCTS 29 . they influence Indian mindset.
Similarly Coke has acquired Thumps up. Local Baniya" only they can 30 . puppetry. The word is a part of the Bengali. and e-chaupal. as people believe these brands. Electrolux is working on a made-for India fridge designed to serve basic purposes: chill drinking water. folk theatre etc. BY EFFECTIVE MEDIA COMMUNICATION Media Rural marketing is being used by companies. they were wrong. BY GIVING INDIAN WORDS FOR BRANDS Companies use Indian words for brands. keep cooked food fresh. but later on they realized that to survive in the market and to compete with their competitor they have to rejuvenate these brands. and to withstand long power cuts. soon they realized that to succeed in India they have to reach the nook and the corner of the country. Citra and Limca so that they can kill these brands. Brook Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in Etawah district. Keeping into consideration the requirements. Like LG has used India brand name "Sampoorna" for its newly launched TV. Gold Spot. Govt of India uses puppetry in its campaigns to press ahead social issues. while the modern media includes TV. LG has sold one lakh 20-inch Sampoorna TVs. the lights are switched of and a torch is flashed in the dark (EVEREADYs tact). Electrolux has acquired two Indian brands Kelvinator and Allwyn this has gave them the well-established distribution channel. BY ADOPTING LOCALISED WAY OF DISTRIBUTING Proper distribution channels are recognized by companies.000. In the past one year. LIC uses puppets to educate rural masses about its insurance policies. As well as trust of people. Marathi and Tamil tongue. all in towns with a population of around 10. BY ACQUIRING INDIAN BRANDS As Indian brands are operating in India for a long time and they enjoy a good reputation in India. The distribution channel could be big scale Super markets. they thought that a similar system can be grown in India. a firm develops these products. In between such a show.Many companies are developing rural-specific products. They can either go for the traditional media or the modern media. Hindi. However. radio. MNCs have found that it is much easier for them to operate in India if they acquire an Established Indian Brand. The traditional media include melas. They have to reach the "local Paan wala.
Single serve 31 . so that they can associate their name with players like him and get popularity. which can be employed to develop or modify the products to targets the rural market. Product Strategies The specific strategies. Companies are promoting players like Bhaichung Bhutia. a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of Parker Sonnet Hussain special edition fountain pens. and to capture the market share in India they have to go the local market shoe sellers. Recently Luxor Writing Instruments Ltd. MNC shoe giants. Dabur uses these events to sell products like JANAM GHUTI (Gripe water). Companies take advantage of such events to market their products. Escorts also display its products like tractors and motorcycles in such melas. PAINTINGS A picture is worth thousand words. BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES MNCs have realized that in India celebrities enjoyed a great popularity so they now associate themselves with Indian celebrities. NCAER estimates that around half of items sold in these melas are FMCG products and consumer durables. This pen is signed by Mr. priced at Rs. They have to reach to local cities with low priced products. small unit packages stand a good chance of acceptance in rural market. Makbul Fida Hussain a renowned painter who has created "Gajgamini" range of paintings. Rural people like the sight of bright colors. Adidas. can be classified as follows: 1. 5000. Small unit packing: Given the low per capita income & purchasing habits of the rural consumers.succeed. Reebok. COKE. who is promoted by Reebok. PEPSI and TATA traders advertise their products through paintings. and Nike started with exclusive stores but soon they realized that they do not enjoy much Brand Equity in India. MELAS Melas are places where villagers gather once in a while for shopping. The message is simple and clean.
Its design has been modified to protect it against rough usage in rural environment. Small packing’s stand a good chance of acceptance in rural markets. Also the Red Label Rs. tooth paste. This is in real terms. experiment with new products. pickles. New product designs: Keeping in view the rural life style the manufacturer and the marketing men can think in terms of new product designs. biscuits. Sturdiness of a product either or appearance is an important for the rural consumers. 3. all these environmental factors must be considered while developing the products meant for rural audience. Nokia’s 1100 model is a very good example of a customized model for rural markets. This method has been tested by products life shampoos. 2. Utility oriented products: The rural consumers are more concerned with utility of the product and its appearance Philips India Ltd. 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. 3. Initially the sales were good but declined subsequently. The small unit packing’s will definitely attract a large number of rural consumers. rough roads & frequent power fluctuations. heavier weight meant that it has more over and durability. The product should be sturdy enough to stand rough handling. 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. in some of the economically priced models in order to cater to the semi-urban or rural consumers. transportation & storage. Sturdy products: Sturdiness of a product is an important factor for rural consumers. Vicks cough drops in single tablets. thinking global & acting local. etc. 32 .00 pack has more sales as compared to the large pack. & conserve cash at the same time. Thus. It is also introduces messaging in Hindi language now.packets or sachets are enormously popular in India. For them. The rural product usage environment is tough because of rough handling. Developed and introduced a low cost medium wave receiver named BAHADUR during the early seventies. 4. They allow consumers to buy only what they need. The advantage is that the price is low and the rural consumer can easily afford it. it is dust resistant & has a small torch light in view of the frequent power cuts in rural India.
2. The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on generic names.g. Soya protein is being used instead of milk protein. tea. Low cost/ cheap products: This follows from the product strategy. For example. Pet jars free with the Hasmukhrai and Co Tea. Many a time’s rural consumers ask for peeli tikki in case of conventional and detergent washing soap.: 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 refer to it as Thanda…… so Coca-cola used that word. vicks 5 grams tin.On investigation it was found that the rural consumer bought radios not only for information and news but also for entertainment. coffee. the rural people can efficiently reuse the plastic bottle of hair oil. shampoo sachets. Ariel Super Compact. Milk protein is expensive while Soya protein is cheaper. Application of value engineering: in food industry. Refill packs / Reusable packaging: In urban areas most of the health drinks are available. The containers can be put to multipurpose uses. 3. etc. the rural consumers do give their own brand name on the name of an item. Pricing strategies 1. this is a common strategy widely adopted by many manufacturing and marketing concerns. A brand name or a logo is very important for a rural consumer for it can be easily remembered. Similarly the packages of edible oil. 5. Such measures can a significant impact in the rural market. e. The price can be kept low by low unit packaging’s like paisa pack of tea. Nirma made a peeli tikki especially for those peeli tikki users who might have experienced better cleanliness with the yellow colored bar as compared to the blue one although the actual difference is only of the color. but the nutrition content of 33 . ghee etc can be reused. Brand name: For identification.
or by ensuring the availability of products at the retail outlets directly. 5. 2. then it can work in rural market. most of the times. distribution & advertising costs & passing on these benefits to the customers to further increase the turnover. thus. But the context. Think in Local Idiom 34 . expanding the market. If an organization gets the price point right. The following strategies can be considered while developing promotional campaigns for the rural markets: 1. in the rural markets of India. then they can still generate good returns on the capital employed. is delivering very good results for a large number of FMCG product categories. 7. 4. Most often. In categories where maintaining the price point is extremely critical. Think Global Act Local Rural population is diverse. Promotion strategies Customized promotional media & messages need to be developed by the organizations to effectively target the rural market. the theme of the advertisement needs to revolve among universal themes. the strategy should be to cut down the production. it has been observed that advertising has less to do with product sales in the rural areas. as was done by Coca Cola. Low volume-low price strategy: This strategy of reducing prices by reducing the package size in order to make it appear more affordable. language & idioms should be such that the rural audience of different rural market segments can relate to. 6. Overall efficiency & passing on benefits to consumers: For rural products. storyline. charges more than the MRP. so that a larger segment can afford it. For that. The basic aim is to reduce the value of the product.both is the same. such as family-love. If they price their product at a level which can lead to good volumes. Large volume-low margins (Rapid or slow penetration strategy): Marketers have to focus on generating large volumes & not big profit margins on individual products. The manufacture has to ensure price compliance either through promotional campaigns. but the commonalities of their ethos & simple living habits need to be understood for advertising to succeed. Ensuring price compliance: Rural retailers. this strategy is delivering very good results.
35 . It is preferable that it has only a few propositions at a time. in less time can easily confuse them & leave them bewildered. namely. The only we can have insights like ‘Thanda matlab Coca Cola’.This is the need of the advertising professionals who can think like the rural people. 5. which can be easily understood. Large distances between villages. it is almost impossible to transplant strategies which work successfully in urban markets onto rural markets. That is why Govinda in the Mirinda as boosted the sales of the drink in the rural markets. The theme of the story line can be about how the product can solve the problems of the rural consumers. 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. & they should not include any confusing elements. 4. Unfortunately. Narrative Story Style The promotional message can be delivered in the form of an entertaining story with a message depicting how the brand delivers “larger good” to the family & society. Bombarding rural consumers with too much. Choice of Brand Ambassador Brand Ambassador for the rural markets need to be picked carefully as urban successes might not get replicated in the rural markets. Simplicity & Clarity All promotional messages targeted at rural audience need to be simple & clear. The road blocks to reach the rural customers are: • • Lack of adequate transport facilities. DISTRIBUTION STRATEGY Many companies view the rural markets as great opportunity for expanding their sales but find distribution as a major problem. 3. There should be the use of language writers who understands the rural & regional pulse better. 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. extensive retailing and sustained pull generation through mass media advertising.
but the rural population covered will be substantial. Therefore. This strategy is good to begin with & then subsequently. 1. Use of co-operative societies: There are over 3 lacks co-operative societies operating in rural areas for different purposes like marketing cooperatives. 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. 4. These cooperatives have an arrangement for centralized procurement and distribution through their respective state level federation.000 villages. The following distribution strategies formulated for the rural category. farmer’s service cooperatives and other multipurpose cooperatives. 2. With a distribution network in about 55. Many of the societies extend credit to the members for purchases.• • • Lack of pucca roads connecting villages to nearest townships. one can cover about 25 crores rural consumers. 3. villages with lesser populations can be added. Segmentation: the number of villages in India is huge & it is not viable to contact & serve all villages directly. sugar. By doing so the percentage of villages covered comes to only 10% of all the villages. Coverage of villages with 2000 and above population: Ideally. The purpose of PDS is to make available essential commodities like food grains. 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. The revamped PDS places more emphasis on reaching remote rural areas like the hills and tribal’s. The marketers were of the opinion that the villagers would come to nearby towns and buy the products that they want. to the extent of about 40 to 45 percent. which have a population of 2000 persons & above each. 36 . Lack of proper retail outlets Lack of mass media infrastructure. coverage of villages with up to 2000 and above population could be the break-even point for a distribution setup. Utilization of public distributory system: The PDS in the country is fairly well organized. 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.
co-operatives as well as private entrepreneurs. It is estimated that over 5. While shandies/heaths are held a particular day every week. bullock-carts. Distribution up to feeder markets/mandi towns: Keeping in view the hierarchy of markets for the rural consumers. Shandies/Haaths/Jathras/Melas: These are places where the rural consumers congregate as a rule. which attract urbanite also like ‘Mankanavillaku’ in 37 . These shops are run by the state civil Supplies Corporation. Promotion can be taken.000 fairs are held in the country and the estimated attendance is about 100 million rural consumers. Jathras and melas are held once or twice a year for longer durations. depending upon the township. From the feeder markets and mandi towns the stockiest or wholesaler can arrange for distribution to the village shops in the interior places. Utilization of multipurpose distribution centers by petroleum/oil companies: In order to cater to the rural areas the petroleum/oil companies have evolved a concept of multipurpose distribution centers in rural areas. Here again there is an arrangement for centralized procurement and distribution.kerosene. Only temporary shops come up selling goods of all kinds. jewelry. pesticides and seeds. It can be beneficial for companies to organize sales of their product at such places. There are 50 such big rural fairs held in various parts of country. For convincing the manufacturing and marketing man with regard to the importance of these places from rural marketing point of view a visit to such places is necessary. This distribution can be done by mopeds. The shops that distribute these commodities are called fair price shops. These outlets can be profitably utilized for selling consumables and durable items also. The rural consumer who has tractors. Such places attract large number of itinerant merchants. They are normally timed with religious festivals. Biggest fair ‘Pushkar Mela’ is estimated to attract over 10 million people. hardware. In addition to petrol/diesel. cycles. these outlets also stock consumables agricultural inputs like fertilizers. 7. edible oils and others to the consumers at a reasonable price. torch cells and other durables and consumer products. It is estimated that there are about 450 such outlets in operation in the country. camelbacks etc. the feeder markets and mandi towns offer excellent scope for distribution. radios. The rural customers visit these towns at regular intervals not only for selling the agricultural produce but also for purchasing cloth. 6. oilengine pump sets and mopeds frequent these outlets for their requirement. as there will be ready captive audience. lubricants. The manufacturing and marketing men should explore effective utilization of PDS. 5.
Merits: • Convenience: The entire market can be related to large departmental stores in cities. a week and the bargaining advantage attract the frugal and weeklong hard working rural folk. This is why there are about 2 lakh fertilizer dealers in the country. ‘Periya Kirthigai’ at Tiruparunkunaram in Tamil Nadu. 9. The supermarket in Varana Nagar caters exclusively to rural consumers. raw materials and a host of products are available. jewellery. Example of Varana Nagar in Maharashtra proved an eye opener in this regard where the sugar and milk cooperatives have totally changed the life style of people. • Attractive: The weekend shopping is not only convenient but also entertaining. Similarly a co-operative supermarket called ‘Chintamani’ in Coimbatore (T. both in cooperative & private sector. These outlets crop up every week. there will be entertainment.Malappara in Kerela. cattle. Afterwards. Joint distribution by Non-competing Companies: As the cost of distributing the products in the rural market through distribution vans can be unviable for a single company.P. where the advantage is a one-stop shopping exercise. different noncompeting companies can come together to jointly operate distribution vans for the rural market.N) arranges free transit of rural consumers to the supermarket of their purchases. machinery. providing consumers immense choice and prices. 38 . farming equipment. Household goods. as per the essential commodities act. the entire operation can become financially viable for all the players. The markets start early and will be over by lunch. In respect of transactions. Kumbh Mela at Hardwar in U. This will enable them to share the cost of operating the van & on account of the sharing of the cost by four or five companies. clothes. Further the freshness of the produce. 8. • Availability: It is a market for everyone and for everything. it is an attractive place to those who want to buy second hand durables and to those who prefer barter transactions. Agricultural Input Dealers: Fertilizers should be made available to the farmers within the range of 4-5 km from their residence. buying in bulk for. durables.
It adds a personal touch to the marketing. As a result of retail based distribution was weakened. The reason for this speculative character and dormant role of wholesalers are: • • Indian market was largely sellers market.Whole seller. Wholesalers The Indian wholesaler is principally a Galla – Kirana (food-grain) merchant who sustains the belief that business is speculative rather than distributive in character. Vans. Retailer. and Bazaars & Shadies. 1. 39 . Weekly Haats. making it easier to sell the product & maximise sales for the company.10. Personal Selling Network: It is very successful distribution channel being developed by companies like HUL. THE OLD SETUP The historically available people & places for distribution include: . Companies laid more emphasis or retailers in urban areas. as the salesmen are the resident of the village or community itself. who are very large in number. He is a trader / commodity merchant rather than a distributor and therefore tends to support a brand during boom and withdraw support during slump. There was no need for active sales growth.
40 . Village retailers have traditionally been among the most mobile of rural residents.• Rural markets were neglected by many. Their multi – person interaction in the closed village society. The role of urban retailer is weak. The current need is to activate and develop wholesaler of the adjoining market as a distributor of products to rural retail outlets and build his loyalties to the company. Often doubling up as money lenders. His view points are evaluated with other sources of information. CREDIBILITY: He enjoys the confidence of the villagers. 2. His views are accepted and followed by the rural people whose awareness and media exposure levels are low.) II. Therefore many companies were dependent on whole salers. The occurrence of retail outlets was low. I. As a result retailers play a significant role. Retailers There are different kinds of retailers. INFLUENCE LEADER: His role as influence leader is indisputable. (The urban retailer is not trusted. He is seen as a businessman with profit motto. • Shops within the village • Shops located on the main road and not exactly within the village • Kasba market or the tahsil market. From tender twig of neem to washing powder retailer testimony has been vital part of the product adoption process. The urban consumers have numerous sources of information.
there is less influence of shelf displays and point of purchase promotion. the urban retailers have to make an effort to adopt relationship marketing. Retailers helps in identification and selection of brands. (. He is one of the main sources of information and opinion as well as supplier of product and services.The urban retailer has a limited role as a brand promoter. He caters to a set of buyers who have income from immovable land resources and would be static over a much longer time span. recommend the brands. 41 . he has been harbinger of change. HARBINGER OF CHANGE In an environment relatively isolated from external developments. III. BRAND PROMOTER: In rural market retailers remains the deciding factor to sell particular brand.He cannot directly.) V. It is through shelf displays and incentive offers that he has to push the brands. His customers base comprises largely the mobile service class prone to shift residence at least once. in less than a decade. The relationship could extend beyond three generations. RELATIONSHIP MARKETER Village retailer practices relationship marketing.) IV. Although retailer’s opinion is sought it may not be 100% believed and followed. as urban consumers do not trust him completely.He is to intelligently drive home his recommendations. This limits the time span and perspective of the retailer – customer relationship. if not more. Presence of spurious brands is an ample testimony to this view. . (on the contrary. backed by historical credibility of the retailer as a product referral. .
wielding limited influence in changing the product choices and quality of life of consumers. It hired vans to penetrate the rural interior. Dina Thanthi in Tamil Nadu.P. These markets are very well organized with shopkeepers having pre-assigned spaces for them to sell their wares. It decided to make a concerted foray into rural India in 1996. Its location changes every week. Examples: Newspapers: Eenadu in A. Cinema: 30%. have an important place in distribution and promotion of the products in villages. JK Dairy launched whitener ‘Dairy Top’ in small 50 gm sachets priced at Rs. TV. Reach of formal media is low in rural households (Print: 18%. Cinema.(As against this. 4. 42 . Weekly Haats. Bazaars. TV: 27%. each van traveling around 125 km a day. Vans Mobile vans long since. Punjab Kesari in the North. we find urban retailer. A typical market is in an open field with ample space for displaying all sorts of goods. Media Vehicles Formal media It includes Press and print.) 3. in all. 25 days a month. about 47. These markets have different names in different regions..50. Radio. and Radio: 37%) and therefore the marketer has to consider the following points: Newspapers and magazines: English newspapers and magazines have negligible circulation in rural areas.000 haats held throughout the country. Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas. But they are strikingly similar in what they sell. It is reported that there are. Shandies The haats are the oldest outlets to purchase household goods and for trade. However local language newspapers and magazines are becoming popular among educated facilities in rural areas. 6. and Point of purchase and Outdoor advertisement.
Local distributor or dealer who has good contacts with cinema houses in villages can easily monitor this activity. Lux. Karnataka and Andhra Pradesh. Example: Colgate. There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rural customer. Village theatres do roaring business during festivals by having four shows per day. hoarding. Symbols. tree boards. Film viewing habits is high in certain states like Tamil Nadu. Examples: Films on products like Vicks. Apart from films. HLL has been using TV to communicate with the rural masses. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops. Examples: SUN TV is very popular even in rural areas in Tamil Nadu and Asianet is a preferred regional channel in Kerala. Nihar oil etc are some of the products advertised via television. Ad slides can also be screened in village theatres. Generally rural people prefer bright colours and the marketer should 43 . Zandu Balm. Lifebuoy and SPIC fertilizers are shown in rural cinema halls. dealer boards. which includes signboards. Cinema: About 65% of the earnings from cinema are from rural markets. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The monthly charge for showing an ad film is within Rs. Lifebuoy. bus boards. Another advantage is that the radio commercial can be prepared at short notice to meet the changing needs of the rural folk. Radio: Radio reaches large population in rural areas at a relatively low cost. Television: It has made a great impact and large audience has been exposed to this medium. Outdoor advertisements: This form of media. pictures and colours should be used in POPs meant for rural markets so that they can easily identify the products. Zuari industries are some of the companies using radio communication programme. Regional TV channels have become very popular especially in Southern states. wall painting. The advertisement has to be released during this time to get maximum coverage in rural areas.500. Jyoti Labs. product display boards etc. is cost effective in rural areas.
Wall paintings: It is an effective and economical medium for communication in rural areas. use wall painting as promotion medium in rural areas. The cost of such a painted board is about Rs.Utilize such cues. branded coffee/tea. Tree boards: These are painted boards of about two square feet in dimension having the picture or name or slogan of the product painted on it. In cities lot of junk mail is received by all of us and very often such mails are thrown into the dustbin whereas a villager get very few letters and he is receptive to such mailers. The cost of painting one square foot area is just Rs. These boards are fixed to the trees on both sides of the village road at a height of about 10 feet from ground level. directly to potential customers through the medium of post. festoons and product packs in the shops will catch the attention of prospective buyers. These boards attract the attention of slow moving vehicles like cycles. It is a medium employed by the advertiser to bring in a personal touch. fans. since it stays there for a long time depending upon the weather conditions. Very often the owner takes responsibility for taking care of the wall painting. fertilizers etc. Painting to be avoided during election time and rainy season.80. It is better to take permission of the owner. Direct mail advertising: It is a way of passing on information relating to goods or services for sale. Companies marketing TV. Point of purchase: Display of hangings. bullock carts and 44 . However a clutter of such POP materials of competing companies will not have the desired effect and is to be avoided. shops and schools are ideal places for painting and the company need not have to pay any rent for the same. The matter should be in the form of pictures. pesticides. Walls of farm houses. toothpaste. The walls have to be painted at least one or two feet from ground level. slogans for catching the attention of people. Retailers welcome painting of their shops so that the shop will look better.10.
Example: This approach has been found to be very effective for agricultural machinery. Potential customers in the village are identified and the company’s/distributor’s representative makes farm-to-farm visits and highlight the benefits of the products. The advantage is that the sales person can understand the needs and wants of the rural customer by directly discussing with him and answer his queries on products and services.tractors and people walking on the road. Fertilizer and pesticide companies in rural areas extensively use tree boards. Farm-to-Farm/House-to-House visit: Rural people prefer face-to-face communication and farm visits facilitate two-way communication. The person does not sell the product but only promotes the use of the product. Informal/Rural specific media These media with effective reach and personalized communication will help in realizing the promotional objectives. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders. Companies to suit the specific requirements of rural communication are using a variety of such media effectively and some of the more important media and methods are given below. animal health products and agricultural inputs. These are low priced promotion items and can be used by consumer goods companies too. The company is able to pass on the message regarding benefits of the products to a large number of customers through such meetings. even the buses move at slow speed through village road. Considering the poor condition of roads. Many LIC agents and companies dealing with high value consumer durables have tried this method with success in rich rural areas. Group meeting: Group meetings of rural customers as well as prospects are an important part of interpersonal media. The person carries with him literature in local language and also samples of products. Very often the local dealer also joins the representative in making farm-to-farm visits. Group meeting of key customers are conducted by 45 .
For the marketer.e. the company can not only promote and sell the products but also understand the shared values. The Haats: Traditionally on certain days of week.banks. beliefs and perceptions of rural customers that influence his buying behaviour. By participating in haats and melas. Such opinion leaders could be big landlords. cattle fairs and religious fairs and may be held only for a day or may extend over a week. Example: MRF Tyres conduct tractor owners meet in villages to discuss repairs and maintenance of tractors. The Melas: Melas are of different types i. Next day they move to another haat. teachers. Examples: a) Mahindra Tractors use bankers as opinion leaders for their product. Such meetings could be organized in prosperous villages for promoting consumer durables and two wheelers also. The reason being that in villages the wages are paid on weekly basis and haat is conducted on the day when the villages get their wages. extension workers etc. agricultural inputs and machinery companies in rural areas. both the sellers and buyers meet in the village to buy and sell goods and services. The bankers visit an identified village. panchayath-president. Opinion leaders: Villagers place more emphasis on the experience of others who have used a product/brand to make purchase decision. b) The mahakumbh at Allahabad is the biggest mela in India. commodity fairs. bank official. These are the haats that are being held regularly in all rural areas. The sellers arrive in the morning in the haat and remain till late in the evening. Examples: a) Britannia promotes Tiger Brand Biscuits through melas. HLL has put up 14 stalls in the mela grounds for promoting Lifebuoy. Folk dances: 46 . b) Asian Paints promoted its Utsav brand of paint by painting the village Sarpanch’s house a few months prior to the launch if the branch to demonstrate that the paint does not peel off. the haat can be an ideal platform for advertising and selling of goods. Many companies have come out with creative ideas for participating in such melas. Handcarts have been deployed for increasing access. Opinion leader is a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. get the village people in a common place and explain the various schemes to the villagers.
In a day the troupe covers about 8-10 villages. The folk dance “Kuravan Kurathi” is popular in Tamil Nadu. Thumps Up has sponsored Lavnis. Example: Companies such as HLL. The cost of running a fully equipped AVP unit is about Rs. The main purpose of this contest is to remind the customer to buy the product as soon as he enters the shop. The troupe consists of dancers. The van is a mobile promotion station having facilities for screening films slides and mike publicity. This is followed by folk dances. Its main purpose is to protect the product during transit. film songs are played to attract the attention of the villages. and Phillips have made effective use of AVP vans for popularizing their products in rural areas. the folk dance programme of Maharashtra and over 30 programmes have been arranged in selected rural markets. The vans move to the next village for the second show. The ad film is screened along with some popular film shots and this continues for about 30 minutes. to preserve the quality and to avoid any loss in quality and quantity.These are well-appreciated form of entertainment available to the village people. Another objective is to influence the dealer to stock the product and support the company in increasing the 47 . Mike announcement is made about the company’s products and leaflets are distributed. about the products are answered by the sales person. Product display contests: Package is an integral part of the product. the products and the benefits.4000 per day and AVP van operation has to be considered as an investment for business development in rural areas. Examples: Fertilizer and pesticide companies organize folk dance programmes during peak season in selected markets. As soon as the van reaches a village. Folk dance programme costs about Rs. drummers and musicians and they move in a well-decorated van from one village to another village singing and dancing. Audio Visual Publicity Vans (AVP Vans): AV unit is one of the effective tools for rural communication. if any. After the dance programme. The whole operation takes about 1-2 hours depending upon the products under promotion. number of participants in the meeting and time taken for question and answers. The sales person makes a brief talk about situation in the village. Colgate.5000 per day and therefore these programmes are conducted during the peak season in selected villages. he distributes handbills and answers queries of the customers. At the end of the film show. queries.
soaps and toothpaste. b) Demonstrating the use of tractor/implements for different agricultural operations. This is used for promoting consumer goods such as shampoos. Field days: These are extension of field demonstrations. All the fertilizers. all the important farmers are invited to see demonstration plot and see for themselves how the yields are better in the plot compared to other fields. The company organizes demonstrations in a piece of land belonging to progressive farmers. Field demonstration: This is based on the extension principle “seeing is believing” and is one of the most effective methods to show the superiority of the company’s products to the customers. Field demonstrations/field days consume lot of time and efforts and therefore have to be planned well. Prizes for best displays are announced to motivate the dealers. the contest lasts for about a month. Information centers: 48 .sales. Examples: a) Spraying a particular brand of an insecticide against insect pests and showing the farmer how effectively the insects are controlled. The farmers observe the results in the field and the local dealer calls on them in their farms and persuades them to buy the particular brand of pesticide or fertilizer. pesticides. pressure cookers. Just before harvest. nutrients etc. are applied after making field observations. e) Similarly effectiveness of detergents. A well-planned product display contest not only increases the involvement of dealers in the company’s products but also increases the sales during the contest period. The representative receives 1% commission for every customer who approaches the dealer via demonstrations. The display contest has to be announced well in advance and promotional materials to be distributed to all the selected dealers in a geographical area. A progressive farmer who is an opinion leader is selected and the demonstration is conducted in his field in the presence of a group of farmers in the village. One of the main objectives of following modern agricultural practices is to increase the yield. c) Hawkins pressure cooker has demonstration representatives who carry out demos in rural households. vaccum cleaners and mosquito coils could be promoted by demonstrations in selected markets.
fertilizer application. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for. sprayers and tractors etc. but at the same time the market size is much large in the rural area. The companies can 49 . The consumer wants those products which are long lasting. Experienced agricultural graduates who make frequent visits to the field and advice farmers on modern agricultural practices manage the centers. easy to use and cheaper. It is necessary for all the major companies to provide those products which are easy to available and affordable to the consumers. Examples: Textile mills maintaining community gardens. religious events. The income level of rural consumers is not as high as the income level of urban consumers that’s why they want low price goods. The rural market is very large in compare to the urban market as well as it is more challenging market. seeds.e. Example: Hero Honda has opened extension counters with show room facilities in major rural markets. diesel engines. They include village sports. fertilizers. prominent personalities and role models. pesticides.They provide latest information on cultivation of crops. It is one of the reasons that the sell of sachet is much larger in the rural area in all segments. Many consumer goods companies have opened show rooms in prosperous rural areas. Mineral water companies supplying clean drinking water during summer festivals in villages and Consumer goods companies sponsoring Kabaddi. CONCLUSION Thus looking at the challenges and 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. good. They also provide information on farm implements. weed. It is right that the profit margin is very low in the FMCG products. Life-style marketing: Each rural market segment has certain special features i. so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India. they share common life-style traits. management and control of pests and diseases.
BIBLIOGRAPHY&WEIBLOGRAPHY WEBSITE: 1.coolavenues.indianmba. 2.htm BOOKS: krishnamacharyulu & Ramakrishnan” rural marketing-text & cases” pearson education.com/know/mktg/ www.icmrindia. 50 .html www. www.reduce their prices by cutting the costs on the packaging because the rural consumers don’t need attractive packaging. Rural market has an untapped potential like rain but it is different from the urban market so it requires the different marketing strategies and marketer has to meet the challenges to be successful in rural market.org/casestudies/catalogue/Marketing/MKTG081. 3. Application of 4A* is also a major task for the major companies in this area.com/Faculty_Column/FC658/fc658.
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