Scope of

Rural Marketing

What is Rural area?
• Government agencies like IRDA (Insurance Regulatory and Development Agency and NCAER (National Council for applied Economic Research) define Rural as :

Village with a population <5000 with 75% male population engaged in agriculture etc. population density <400 sq km


What is Rural Marketing?
Developing of the market in the area as defined as Rural hence it could be aptly said that it encompasses the activities such as developing the process to meet this objective :   Right product at the right price to the right people at the right time. Exchange between rural and Urban is a factor . Could be Urban to Rural: Rural to Urban, Rural to Rural

Size of the market Largely Untapped Too crowded Urban Market

Reasons for Going Rural

Income on the rise/disposable income Income from other than agriculture Income flow from urban /abroad Better exposure - media Great success stories HLL 50% Colgate 50% LG 50% Asian Paints 60% Dabur 40% Videocon 40% Cadbury’s 25%

“India lives in villages”Mahatma Gandhi

Potencial of Rural Market
About 285 million reside in urban India as compared to 742 million in rural India. The number of middle income and high-income household in rural India has grown from 80 million to 111 million while urban India has grown from 46 million to 59 million. 53 per cent of all FMCGs and 59 per cent of all consumer durables are sold in rural India. Rural marketing involves addressing around 700 million potential consumers, over 40 per cent of the Indian middle-class, and about half the country's disposable income. The Indian rural market is almost twice as large as the entire market of USA or Russia. The rural market for FMCG is Rs. 65,000 crore, for durables Rs. 5,000 crore, for tractors and agri-inputs Rs. 45,000 crore and two- and fourwheelers, Rs. 8,000 crore. In total, a whopping Rs. 1,23,000 crore.

Move to Rural Market …encouraging Data
Rural India buys
Soft Drinks approx 45% of all soft drinks Almost 50% motor cycles Approx 55% of cigarettes Half the total market for TV, Fans, pressure cooker, bicycles Washing soap, tea, blades, salt, toothpowder Coca Cola is growing over 35% in Rural areas compared to Over 22 % Urban According to Hasna Research , a market research farm that Has published a Guide to Indian Markets 2006 Consumer durables in Indian Villages risen sharply TV Sales up by 200% Motorcycle by 77%

Low per capita income Low disposable income Inadequate fixed income (daily wages) Majority – depends on Agricultural Income Acute dependence on monsoon Consumption linked to harvest Infrastructure problems Roads, power Low awareness Communication- difficult & expensive Too many languages Geographic Spread


Urban & Rural Key Differences Markets
 Per capita Income  Disposable Income  Literacy levels  Infrastructure  Communication  Geographical Spread  Customer has many choices

Key Challenges 4A

Affordability Mantra Availability Acceptability


4 Ps Promotion Price Product Place

4 As Awareness Affordable Acceptable Available

Developmental marketing is a process through which awareness is created could be demonstration could be presentation Free samples could be through up eg tie up with Bank tie up with Petrol/Diesel pumps (Hyndai did with IOC and PNB and SBI subsidiaries >30% sale of Hyndai from Rural/Semi Urban areas)
Awareness Trial


Post-Purchase Satisfaction

Colgate – program Operation Jagruti Switch from Charcoal to Colgate tooth powder HLL Free samples of Lifebuoy Cavin Kare – Free sample of Chik Champoo

About Rural Marketing…

• Rural India offers tremendous opportunity for any company to tap. • Companies face many challenges in tackling the rural markets. • Important factors being an understanding of the rural customers' needs, a reliable distribution channel, and an effective marketing communication strategy to put their message across to the rural consumer • The Mantra(four As)