Introduction What is Rural market and rural marketing

Its Understanding -importance/benefits1-To marketersfor better opportunities, growth in carriers,

entrepreneurships, market developments -.
2-To Rural consumersbetter product and services knowledge, awareness
and availability, lifestyles improvements, value for
money and so on 3-To companiesa promising market place for long term profits and
growth,
4-To country- socio economic developments

A promising market Place

Post reforms many international brands arrived +

recent reforms FDI attracts more investments
Resulting saturation/intense competition in urban
markets.
So companies search of new markets /rural
markets- ex- many
Rural markets
a potential market with more than 800 million rural
consumers.
many Rural consumers still not tasted modernity
even with increasing education and per capita
incomes.
Better Infrastructure - PMGSY + ICT and so on

Rural Population growth trend- ( world bank

estimates-Accenture report)
India -762 m in 2000 to 853 m in 2011
China -809 m to 665 m
Brazil- 33m to 30 m
Russia- 39m to 37 m
Per capita expenditure increased in rural markets
by19.2% during 2009 -2012,surpassing urban
consumption by 2 percentage points
Rural marketing innovations used as driver for better
market performance
Since 2000 per capita GDP growth faster in rural
India than in urban, 6.2% CAGR vs. 4.7%

Rural per capita consumption growth of 19%

between 2009 and 2012 two percentage points
higher than urban
As incomes grow rural consumption shifts from
necessities to discretionary and lifestyle products
and services
Nelson estimates US$ 100 B FMCG consumption
in 2025 up from 12 b US$ currently
Premium products r replacing entry level versions
Industry classification penetrating in rural
banking fallowed by FMCG, consumer durables,
automotive, pharmaceuticals , Insurance etc.
Print and TV ads are almost as popular
Influencers build trust and product awareness
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Improved rural economy due to.

1-commercial farming growth+ non farm activity
growth , now support of MUDRA , Jandhan a/c ,DBT
2-increased outlay by government in rural
development programs/ abhiyans for health ,
education. MGNAREGA , so on
3- increased institutional agro credit, commercial
farming and not much subsistence farming
4-issue of kissan cards ,
5-loan waivers helped- improved rural economy.
6-Increased consumption of Agro-inputs
7 Higher growth rate of per capita income in rural,
agro +non agro
Problems and Risks-1-Deprived people and deprived markets,
2-Limited infra of transport-distribution
3-Difficult communication, languages and dialects

4-dispersed,large spread
5-low per capita incomes,
6-low literacy,
7-narrow consumption basket
8-spurious products,
9-different thinking of consumers ,
perceptions, conservative attitudes
10- Diversity cultural, communications
Riskslong payback, high initial marketing costs,
etc

Challenges for marketers

Access to customers,
Reach to the last mile , market expansions,
creating sustainable channel relationships ,
creating collaborative channels
Customer acquisition
Creating trust and relevance thru an ecosystem
of stakeholders- social marketing, cause
marketing.
Defining unique value proposition to rural
customers
Engage the right set of influencers
Customer Retention

Devise low cost models for after sales

supports
Anchor customer relationships on trust
Invest in community developments- CSR
regulation for companies
Adapting organization structures to
secure market leadership
Creating winning talent management
strategy
Use of technology to create advantage

Companies go to rural markets ?

1-Urban. Market saturation,
2-large untapped population,
3-rising disposable incomes,
4-rising literacy
5-remittances from metro and abroad,
6-rising Media impact,
7-improving infrastructure , roads and ICT network
8-commercial farming,
urban pushSaturation,
Intense competition,,
Rural pullfast changes in lifestyle
rising affordability,
growing acceptance
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increasing needs/demand,
improving accessibility,
recent success stores
Rising acceptability and affordability
due to As per McKinesy report1-Growth
will be 4 times in rural over urban in 20 yrs,

Population735 millions to over 800 millions

135 million households of 2001 to 146 million
in 2009-10

Occupationincreasing non- agri + commercial agri

Income- per capita 7000/yr to 14000 soon

Consumptiontotal consumption expenditure 78% in rural vs.

72% in urban,
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food expenditure- 36.6% in rural vs. 24.6% in urban,

Fmcg expenditure - 5.6% in rural vs. 4.9, in urban
clothing and footwear- 5 vs. 4,
durables- 3.8 vs. 3.7,
mislaneous goods and services- 48.7% vs. 62.8
2-Growing acceptanceIncreasing literacy
growth rate since 2001- 14.75% in r vs. 7.2 in u,
total 59.4 %in rural vs. 80.3 in urban,
e-learning thru community projects
lifestyle changespsychographics change due to media explosions ,+
incomes, +education
decision making shifts- women empowerments- shg,
youth- more open to changes-kitchen wares
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3- Increasing Demand
Increasing usage and demand for branded products
Size of mkt-13170 bn rs in rural vs13650 bn in urban
fmcg 650 bn,+FMCD-50 bn+ Agri-inputs -450
bn+2/4 wheelers 80 bn=1230 bn
Growth- fmcg-20% in rural vs 17% in urban,
durables- 15%,Insurance- 200%,telecom services
,DTH connections, 41 mn kisan credit cards
up gradations unbranded to branded, tooth powder
to toothpaste, mosquito repellents, premium
detergents
4-Improving accessibility
Bharat nirman program for roads, electricity,
irrigation.
road connectivity growth 40% villages in 2004 to 70
% by 2008
Phone connectivity- teledensity growing fast
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Distribution facilities thru 1,38,000 p.o.,42,000

haats,25,000 melas, 7,000 mandis, 3,80,000
pds,32,000 bank branches, 5,00,000 pcs
Infra- 90% villages electrified, P.C. penetration
growth in 2008 -24% in r vs. 7 in u, laptops in
schools , corporate in Organized retailing
5-Corporate success storieschoupals, shakti, har gaon har angan of honda
and many more in recent past
Scope of products in Rural. markets
Marketing of Agro inputs,
fmcg marketing,
fmcd marketing
Marketing of Rural handicrafts
Marketing of Agri products

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Marketing Challenges for managers1-Rural consumer ability to discriminate varies and

reference points while buying as perceptions ,beliefs
,attitudes differ..
2-Complex understanding of demographics, brand
responses so getting insights needs regular markets
research for sound decisions
3-Competitive situation and planning winning
strategies difficult due to regional, local players.
4-Channel selection different, difficult
5- organising Sales force

Changing patterns due to1-Increased farm productivity,

2-increased exports,
3-better banking and micro finance,
4-favorable policies-subsidies, smart cards,
cooperatives and corporate/contract farming activities
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5-Major fmcg, fmcd firms continuously gaining

more growth from r.m. and so others r also putting
efforts
6-Hatts and Melas gaining more focus,
7more villages connected by road, infrastructure
8-internet and technology penetration,
9-Banking network10-Increasing non-farm activities
Some mythsbranded products r not consumed,
Need cheap but value for money
Not homogenous but heterogeneous
rural India is a poor India
Definitions
R markets ? - population , density, governance,
occupation, infrastructure
R marketing
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1- A function that manages all activities involved in

assessing, stimulating, and converting the
purchasing power of rural consumers in to effective
demand for specific products and services and
moving these products and services to the people in
rural areas to create satisfaction and better standard
of living and thereby achieving organizational
goals.
2- A process of developing, pricing , promoting,
distributing rural specific goods and services,
leading to exchanges between urban and rural
markets which satisfies rural consumer demand and
also achieves org objectives

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More of a Evolutionary and not

revolutionary marketing
Marketers need to understand
rural market environment, rural consumer
behavior, STP process ,marketing mix
applications, Competition,Innovations, role
of ICT, Influencers - opinion leaders,
agriculture products and its marketingemerging marketing- organized retail ,
cooperatives, contract farming, corporate
farming etc
Transactional vs. developmental

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Individual consumer orientation

Society orientation

Process-- stimulating and

conversional mktg.

Catalytic, transformational mktg.

Target group-

Beneficiaries &buyers

Focus-

Buyers,

market fit

Social change

Key task- product innovation

and communication

Social innovation and communication

Nature of activity- commercial

Socio-cultural, economic

Participants- corporate, and

sellers

Govt - agencies, ngos, corporate

Time frame - short, medium

Medium, long

Offer-products/services

+ Development schemes, projects

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Philosophy- societal, developmental

Market- low demand vs. intense competition
Consumer- widely spread, seasonal buying
vs. concentrated ,planned and high
consistent expenditure.
Products-low awareness, positioning difficult,
quality preferences low vs. choosy
Price-more sensitive, low price better
response.
Distribution-Hats/ jatras vs. supermarkets
Promotion- conventional and unconventional

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Features of rural markets in India

1- population concentration in few states-Mix of
large and small states with varied purchasing power
decides overall demand.
2- Scattered markets- Distribution reach and
communication reach?
3-Occupation pattern -Farming and non farming
,Uncertainty, seasonality.
4- Literacy level-, low awareness and difficult diffusing
technical knowledge
5-Seasonal demand- agro based besides related to
marriages and festivals.
6- Socio economic backwardness, -less spend on nonfood items.
7- Media reach- TV, Radio, news papers, internet,
mobiles
8-Communicatin facilities- fast changing thru ICT
revolution
9-Transport facilities- roads unusable during rains,
bullock carts still a mode for transport

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10-rural electrification- for pumps and rural

living?
11-Medical - inadequate
12-Distance near to urban more progressive so
semi urban, Rurban marketing approaches
Constraints in developing rural markets1-High distribution costs
2-high initial market development expenditure
3-Inability of small retailers to carry stocks,
4- Inadequate infrastructure
So sustained and long term planned strategic
efforts for profits
Inhibiting factors1- unevenness,
2- disparity, fragmented, diversity, heterogeneity
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3-low income streams,

4-lack of steady and sustainable consumption,
5-limited skills with ad /promotion agencies,
6-limited awareness and acceptance,
7-low education,
8-low budgets for promotion,
9-local /regional competition,
10- failed initiatives by cos
Strategic approaches1-Trickle down-as csr,+ extended sales thru feeder towns,
nike,
2-undifferentiated, -4 as for fmcg products-colgate
3-differentiated,- 4 as+ specific design as per price
sensitivity, electrification levels, running water, more
developmental vs transactional marketing
4-BOP-developmental mktg +csr,new opportunity,
demand innovations
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Integrated, innovative and inclusive marketing models

works
Evolution and scope of rural marketingR2U + U2R
Concept and nature of r.m.-Developmental + Transactional ,social process, win
win, fast growing, flexible
Implementation issuesMcKinsey 7 S frame model
1-strategy- long term with suitable STP ,innovations
2- structure- for sales force org , distribution etc
suitable
3-Systems- for M.R.,M.I., M.C. Manpower training etc
4-Shared values- top to bottom value delivery
5- Staff- selection, background
6-Skills - social skills, suitable like demos etc
7-Style- participative, MFI, ngo

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Implementation stepsCB, MR, STP, Marketing Mix application

decisions
Difference between UM and RM and
qualities of rural marketers- skills
knowledge, motivation etc

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