Rural Marketing

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What is Rural
Rural areas refer to country side, that are sparsely populated places and are distinct from thickly populated urban areas.

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Rural Market


Census of India 2001:The rural market 2001: has been defined as a place where the population is not more than 5000, the 5000, density of population is not more than 400 per square kilometer and at least 75% 75% of male population is engaged in agriculture. agriculture.
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Rural Market


RBI: RBI: Locations with population up to 10, 10,000 will be considered as rural and 10, 10,000 to 1,00,000 as semi urban. 00, urban. NABARD: NABARD: All locations irrespective of villages or towns, up to a population of 10, 000 will be considered as rural. 10, rural. Most Companies in FMCG: population FMCG: up to 20, 000. 20, 000.
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Rural Market


Consumer Durable Companies: Companies: Population below 50,000 as rural. 50, rural. Marketers View: Any market that View: exists in an area with less than 10,000 10, population, low density of population and without significant infrastructure facilities is rural market. market.
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Rural Marketing
According to National Commission on Agriculture: Agriculture: Rural marketing is a process which starts with a decision to produce a saleable farm commodity and it involves all the aspects of market structure or system, both functional and institutional, based on technical and economic considerations and includes pre and post harvest operations, assembling, grading, storage, transportation and distribution.
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Rural Marketing
Definition of Corporate Rural Marketing: Rural marketing can be defined as function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into an effective demand for specific product and services and moving these product and services to the people in rural areas to create satisfaction and a better standard of living and thereby achieving organizational goals.
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Difference B/W Rural And Urban

Criteria Rural Urban

Occupation

All the people engaged in manufacturing, mechanical, Majority of the people trade, commerce, engaged in agriculture and professions, governing and agriculture related activities other non-agricultural nonoccupations. occupations. Direct relationship to nature Greater isolation from nature and focus on man-made manenvironment

Environment

Density population

of The density is lower than in Greater density than in rural urban community community

Heterogeneity Rural communities are more and More heterogeneous homogenous in racial and homogeneity of rural communities psychological traits the population System interaction

than

Impersonal casual relations, of Fewer contacts with outside superficial, standardised 8 nidhi tandon world formality of relations

Marketing Mix Challenges

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Marketing Mix Challenges

4 Ps (Tools)  Product  Price  Place  Promotion 4 As (Challenges)  Acceptability  Affordability  Availability  Awareness

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ProductProduct-Acceptability


There is need to offer products that suit the rural market. They have to be simpler, an market. easy to use, service or maintain. maintain. Examples In 1998 LG Electronics developed customized television for rural areas and named Sampoorna. It was a runway hit Sampoorna. selling 10,000 unit in first year. 10, year.
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ProductProduct-Acceptability


Because of lack of electricity and absence of refrigerators in rural areas, Coca Cola provides low cost ice boxes, that is tin box for new outlet and thermocole for seasonal outlets. outlets. Sachet packaging is one alternative which has been used by tea, shampoo, toothpaste and tomato ketchup manufactures to penetrate rural markets. markets.
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PricePrice-Affordability


The second challenge is to ensure affordability of the product or service. service. Rural consumer is price sensitive bcoz of his lower income level. level. Godrej introduced three brands of Cinthol, Fair Glow, Godrej in 50gm pack at Rs.4-5, 50gm Rs. meant specifically for MP, UP and Bihar-the Biharso called BIMARU states. states.
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PricePrice-Affordability
HUL has also launched Lifebuoy at Rs. Rs.2 for 50gm. 50gm.  Coca Cola has addressed the affordability issue by introducing the returnable 200ml glass bottle priced at 200ml Rs. Rs.5.


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PlacePlace-Availability


The third challenge is to ensure the availability of product or service. service. India's 627,000 villages are spread 627, over 3.2 million sq km; 700 million km; Indians may live in rural areas, finding them is not easy

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PlacePlace-Availability
India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. market.  To service remote village, stockists use autorickshaws, bullock-carts and even bullockboats in the backwaters of Kerala. Kerala.

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PlacePlace-Availability


CocaCoca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors hubs. appoint and supply, once a week, smaller distributors in adjoining areas. areas.
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PlacePlace-Availability


LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. semimarket. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices

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PromotionPromotion-Awareness


The fourth challenge is to create awareness in the rural area. area. 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
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PromotionPromotion-Awareness


Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned stateDoordarshan. Doordarshan. Consumption of branded products is treated as a special treat or indulgence. indulgence.

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PromotionPromotion-Awareness
Hindustan Lever relies heavily on its own company-organised media. These companymedia. are promotional events organised by stockists. stockists.  Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language. language.

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PromotionPromotion-Awareness


CocaCoca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural 53. households. households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. households. It has also used banners, posters and tapped all the local forms of entertainment. entertainment. Since price is a key issue in the rural areas, CocaCoca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media. media.
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PromotionPromotion-Awareness


LG Electronics uses vans and road shows to reach rural customers. The customers. company uses local language advertising. advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas. areas.

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