Rural Marketing, 2e

Chapter 1
The Call of Rural India

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 Learning Objectives

• Define rural India and rural markets

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• Identify common rural myths

• Understand the rural marketing myths and the challenges

related to it

• Understand the characteristics of the evolving rural

consumer

• Describe the emerging rural India

Rural Marketing, 2e
 Definition of Rural
Organization Definition of Rural Limitation
• Several hamlets demarcated by
physical boundaries

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The term “rural”
• Towns are urban areas that satisfy:
is not defined,
 Minimum population 5,000
nor is the upper
Census  Population density > 400 per sq.
limit of
Km.
population for
 75% of the male population
villages
engaged in non-agricultural
activities
Widening of
• Similar to Census except that the definition allows
IRDA percentage for male population in a larger market
towns is 25% and not 75% to be considered
as rural
Rural: All locations with a population
of up to 10,000 Distinction
RBI Semi-urban: All locations with a defined only by
population between 10,000 and population
100,000
Rural Marketing, 2e
 Definition of Rural

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Organization Definition of Rural Limitation

Town
Planning Towns with population up to
characteristics
Commission 15,000 are considered rural
not defined

Locations with shops/commercial Town or village

Sahara establishments up to 10,000 characteristics
population. not defined

All population centres other than Population

LG Electronics the 7 metros are considered rural criteria is not
or semi-urban considered

Rural Marketing, 2e
 Rural Myths

Rapid urbanization

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• Urban increase rate only 0.75% higher than rural and
showing a slowing trend largely due to the National Rural
Employment Guarantee Scheme (NREGS)

An agrarian economy
• Non-farm activity already 60%; expected to rise to 70% by
2020
• This increases family income and provides a more constant
stream of income to rural households.
• A higher buffer from risks involved in farming

Rural Marketing, 2e
 Rural Marketing Mix

The 4 Ps of marketing – price, product, place and promotion

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– replaced by 4 As in rural markets

Affordability Availability

Awareness Acceptability

Rural Marketing, 2e
 Rural Marketing Mix

Rural consumers are driven by

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Affordability
●

value proposition and not by cost

Single largest challenge for marketers in rural markets

Availability
●
●

Paucity of data for villages and small towns is a

●
●

hindrance

Media reach is increasing

Awareness
●
●

●
●Need for specific messages aimed at the rural psyche
●Use of alternative rural means of communication
●

Rural consumers look for productive assets

●
●

Acceptability Specific needs should be looked into while designing

●
●

products for rural consumers

Rural Marketing, 2e
 The Evolving Rural Consumer
• Value driven and looks for products that add to earning

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capabilities or to status

• Increasing literacy and exposure to mass media, increasing

aspiration levels

• Better road infrastructure leading to increased mobility

• Highest change amongst children and youth, increasing

their role as influencers

Rural Marketing, 2e
 The Evolving Rural Consumer
• Changing cultural and social norms

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• Rise in nuclear families creating new roles for women

• High use of self-help groups (SHGs), especially for women

• Marketers need to focus on creating awareness and

excitement amongst women and youth

Rural Marketing, 2e
 Rural India: The Exploding
Middle Class
• 164 million households accounting for 56% of India’s total
income, 64% of expenditure and 33% of savings

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• 67% road connectivity, 30% tele-density, 60%
electrification

• 200 million mobile users

• 14 million DTH subscribers

• 87 million Kisan Credit Cards

Rural Marketing, 2e
• Higher growth in durables as well as FMCGs as compared to
 Rural India: The Exploding Middle
Class
2020
• Pyramid transforming into a diamond

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Rural Marketing, 2e
 Rural India: The Exploding
Middle Class
• Lower cost of living leads to higher proportion of disposable

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income

• Government rural thrust boosting bottom of pyramid (BoP)

incomes

• Rural infrastructure being developed in the areas of roads,

electrification, education and health

• Increase in agricultural productivity and shift to cash crops

increasing agricultural income

Rural Marketing, 2e
 Rural Marketing Case
Rural Markets
Refer to video case and answer the following questions:

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• Despite the diverse heterogeneous nature of rural
markets, why are marketers focusing on rural
markets?

• How should marketers tackle the huge diversity seen

in rural markets?

• What steps should a company take to tap the huge

potential in rural markets? Discuss this with regard to
the 4 Ps of marketing.
Rural Marketing, 2e
 Successful Mantra for Entering
Rural Markets

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Think like a businessman with the feelings of a
social worker

Rural Marketing, 2e