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Rural Marketing

Rural & Rural Marketing
‡ Rural consumers are keen on branded goods nowadays, the rural population has shown a trend of moving to a state of gradual urbanization in terms of exposure, habits, lifestyles and lastly, consumption patterns of goods and services. ‡ Definition: Rural Marketing is similar as simply marketing . Rural marketing differs only in term of buyers. Here, target market consists of customers living in rural areas. Thus, rural marketing is application of marketing fundamentals (concepts, principles, processes, theories, etc) to rural markets ‡ Rural marketing is a process of developing, pricing, promoting, and distributing rural specific goods and services leading to desired exchange with rural customers to satisfy their needs and wants, and also to achieve organizational objectives.

Characteristics of Rural Marketing
1. 2. 3. 4. 5. 6. 7. 8. 9. More Prospective-upsurge of employment growth Size-account for about 70% of total Indian Population Nature- Precarious income/literacy levels, Superstitious Response to products-utility, durability and value, suitability Response to Price-Price sensitive, credit facility Response to promotion-local promotions, personal selling Predictability-unstable pattern of income level Rigidity- illiterate, High level of Heterogeneity-rich & poor

Distinction between urban and rural markets
‡ Although rural markets offer immense potential, marketers need to recognize the fact that there are considerable differences in many respects, including the nature, characteristics buying patterns and behavior of rural consumers when. compared with their urban counterparts. ‡ While the urban economy thrives mainly on secondary and tertiary activities such as manufacturing and services, the rural economy is driven mainly by primary activities such as agriculture, fishing and forestry. ‡ The consumer demand and consumption patterns also differ across rural and urban areas, in many products, rural consumption now accounts for a larger share than urban. In washing soaps (cakes/bars), the rural share is over 60%. In popular bath soaps, it is more than 50% and in batteries , it is more than 56%. Similar is the case with packaged tea and hair oils.

‡ There are also differences in rural literacy and education levels; In Pakistan the rural and urban literacy levels are 33.64% and 63.08% . In Bangladesh it is 33.45 and 51.75 and in India it is 58.7% and 79.9% respectively. ‡ Pattern of income levels in rural markets is yet another differentiating factor that affects the buying power and consumption behaviour of rural consumers. About 80% of the rural households in India for instance, have a monthly income of less than Rs.3000. It is estimated that only 15% of the rural population in India owns a table fan and about 9% own two wheelers. ‡ Government initiatives has led to improvements in rural literacy levels in the last few years, in India from 36% in 1981 to 59% by 2001. ‡ Likewise it is expected that by the year 2015 about 70% of the villages would be accessible by road. Villages with a population of over 500 people have telephones with subscriber trunk dialing

Challenges in rural marketing
‡ Distribution ‡ Consumer bahaviour ‡ Communication ‡ Cost ‡ Fake and spurious product ‡ Banking and credit problems

Opportunities in rural marketing
‡ Rising rural prosperity ‡ Less dependence on agriculture ‡ Increasing rural consumption ‡ Large population ‡ Increasing sale of branded products

Modifying marketing-mix for rural markets
‡ Success of any business enterprise depends on marketing-mix. These four elements are like powerful weapons in the hand of manager to defend his market and/or attack on rivals. ‡ Behaviour of rural consumers is different and less predictable, the manager has a challenging task to design marketing mix strategies for the rural segments. Due to considerable level of heterogeneity, a manager needs to design tailor-made programme to cater tailor-made programme to cater needs and wants of specific groups.

‡ Dynamics of Rural Markets differ from other market types, and similarly rural marketing strategies are also significantly different from marketing strategies aimed at urban or industrial consumers.
1) Product Mix :

Product is a powerful determinant of firm s success. The products must be suitable to rural customers in all significant aspects. The company must produce product according to present and expected state of rural buyers. Product features (size, shape, colour, weight, etc), qualities, brand name, packaging, labeling, services, and other relevant aspect must be fit with needs, wants and capacity of buyers. Product must undergo necessary changes and improvements to sustain its suitability over time.




Economic and income realities of the market should certainly be considered while developing the product strategy for the rural market. In addition, sociocultural realities should also be considered. When products are designed reflecting both these influences, the chance of success is greater. Specifically-Designed Products do help in many cases; ± The Tractor/trailer ± Eveready s Jeevan Sathi Torch ± Titan-Sonata watches ± Model Variants ± Colour Variants

± Rural customers are most price-sensitive and, hence, price plays more decisive role in buying decisions. Pricing policies and strategies must be formulated with care and caution. ± Price level, discounts and rebates, credit and installment facilities, and so on are important considerations while setting and altering prices.

± Lower-priced product version do help in many cases in the rural market, but no generalization can be made in this regard. ± Many companies try to reduce the prices of their products for the rural market by creating smaller size, or by decreasing the quality. The approach works sometimes and with some products, but not all times, with all products. ± While brands specifically developed for the rural market and lowpriced variants may work better in many cases, the strategy should be one of selling value brands, not cheap brands. ± Example: Phillips, Atlas Cycle, Honda Motor Cycle and Lifebuoy.

‡ Promotion mix:
± The promotion strategies are of paramount importance. ± The television advertisements can lure rural masses, and they are sure it reaches the target audience, because majority of rural India possesses and is glued to TV sets.

± The method of promotion needs to be tailored to suit the expectations of the market. Van/vehicle campaigns edutainment films generating word of mouth publicity through opinion leaders, colourful wall paintings etc. techniques have been proved effective. ± Similarly, puppet-shows, dance, dramas, and mythological songs specially developed for product-promotion purpose, are now being used in rural markets. ± Music cassettes are another effective medium for rural communication. It is an appealing medium and a comparatively less expensive medium. ± Opinion leaders play a key role in popularizing products and influencing rural markets. Nowadays, educated youth of rural youths also influences the rural consumers. Rural consumers are influenced by the life style they watch on TV or through movies.

± Distributing small and medium sized packets through poor roads, over long distances, into deep pockets of rural India and getting the stockiest to trust the mobility is a herculean task. ± Choosing suitable mode of transportation, locating warehouses at strategic points, sufficient points, sufficient insurance, maintaining adequate inventory, maintaining sufficient number of retail outlets at different regions and deploying specially trained sales force are some of the critical decisions in rural distribution. ± For service marketing, employees of rural branches and agents can do better jobs. Banking, insurance, investment, satellite and cable connection, cell phone, auto sales and service etc, the market is booming in villages of some states. Service industries are trying to penetrate the rural segments by deploying specially trained employees and local agents.

There is an opportunity to make a lot of money in rural India. But there are obstacles too. A responsive marketer, who makes a serious attempt to understand the rural market can succeed with his product than the one who has a piecemeal approach

‡ Balram Dogra and Karminder Ghuman, Rural Marketing Text, Tata Mcgraw Hill publishing company Ltd. New Delhi, 2008. ‡ ‡