Analyze the Marketing of Consumer Products (Both Durable and Non Durable Products) in Rural Areas

products) in rural areas. — Document Transcript

1. A DISSERTATION REPORT “To analyze the marketing of consumer products

(both durable and non durable products) in rural areas.” SUBMITTED BY: 

 UNDER THE GUIDANCE OF: Acknowledgement I consider my proud privilege to express deep sense of gratitude

to………………….. ………………… for his admirable and valuable guidance, keen

interest, encouragement and constructive suggestions during the course of the project. 

 I would also like to thank my father …………………………….,for their insperation and moral support received in completing this work as for collecting t the

data i had to visit so many rural areas or villages. TABLE OF

CONTENTS TOPICPAGE NUMBEREXECUTIVE SUMMARY06RESEARCH

METHODOLOGYO8REVIEW OF LITERATURE11INTRODUCTION15FINDINGS AND

ANALYSIS129CONCLUSIONS147SUGGESTIONS AND

RECOMMENDATIONS150APPENDIX151BIBLIOGRAPHY157 EXECUTIVE

SUMMARY India’s way is not Europe’s. India is not Calcutta and Bombay. India

lives in her seven hundred thousand villages.....................Mahatma Gandhi, 1926 

Marketing in developing countries like India have often been borrowed from the western

world. Concepts like Brand identity, Customer relationship management, 4 Ps of the

marketing mix, Consumer behavior process; Segmentation, targeting and positioning etc.

have often been lifted straight from the marketing intelligentsia abroad and adopted in Indian

conditions, often with minimal success. Reason lies not in the fault of such concepts, but their

integration with the Indian ethos and culture. The rural India offers a tremendous

market potential. Nearly two-thirds of all middle-income households in the country are in

rural India and represents half of India’s buying potential. Despite, the strong potential the

rural markets are by and large less exploited. Consider the market, out of five lakhs villages

in India only one lakh have been tapped so far. According to us if the rural market has to be

adequately tapped, there has to be a change in the way marketing concepts learnt in B-schools

with adequate adoption according to scenarios prevalent in rural India. The paper thereby

present the modified version of Philip Kotler’s famous marketing mix consisting of 4Ps. The

focus is on its modification and subsequent customization to Indian rural markets perspective.

The 4Ps have to be modified to include 1P i.e. Packaging and 1R i.e. Retailer as special focus

areas. Further to ensure the sustainability of the marketing mix two Es i.e. Education and

Empowerment have to be at the core as they help in generating widespread participation from

the rural clientele by enhancing their standard of living. The Products in the rural market

should essentially operate at the basic and expected level of product classification. They

should essentially meet the basic needs of the consumer and should be a no-frill product, as

the consumer would not be valuing much any further addition to the product concept.

Companies also face a daunting task in communicating about their products to the consumer

due to lack of literacy and failure of traditional media to penetrate in the rural

households. Hence, the advertising mix has to be more towards non-conventional yet

effective medium like Puppetry, Folk Theater Song, Wall Painting, Demonstration,

Posters, Agricultural Games, NGOs network, etc. Thus overall either the product or

communication or preferably both need to be customized to target the rural customer. 

In terms of physical distribution due to lack of infrastructure the costs are very exorbitant to

reach the rural customer. Thus, mediums like rural marketing vehicles and melas and haats

provide better opportunities to meet customer needs. Also the existing distribution would

need a transformation to achieve the required penetration levels as success of Project

Streamline of HLL has shown. Since, the value for money concept is more important rural

customers, there has to be an approach of treating customer as budget seeking consumer.

Here, fitting the consumer needs into an affordable price point is pursued first and then other

features of product are fitted in. Similarly, packaging has to meet customer needs of better

brand recall and introducing favorable price points. At the same time the importance of

retailer has to be recognized where he is one of the most major influencer is customers

decision making process. He acts as the friend and guide in this process and hence, needs to

be managed effectively through promotion programmes and incentives to promote the brand

of a company. In order to bridge the gap between Philip Kotler and countryside Indian what

is needed the appreciation of unique features of rural India and thus, responding to them by

making adequate improvements in the application of the marketing concepts learnt in the

class. For achieving the desired results of capturing the rural customer a comprehensive

approach to the traditional marketing concepts has to be taken. This marketing mix has to be

responsive to customers needs and fit into his life as a tool of self-enhancement. To be

successful the concept of marketing has to be taken in conjunction with its economic,

psychological and social implications. RESEARCH METHODOLOGY OBJECTIVES OF THE STUDY: Any task without sound objectives is like Tree

without roots. Similarly in case of any research study undertaken, initially the objectives of

the same are determined and accordingly the further steps are taken on. A research study may

have many objectives but all these objectives revolve around one major objective which is the

focus of the study. In this study, the focus is on the emergence of Rural markets as the most

happening market on which every marketer has an eye. And so this study will be based on

studying the emergence of rural market in various contexts. The main objective of the

study is to analyse and present the marketing of consumer products in rural areas. The

following objectives have been set forth. They are to: Present a rural marketing

perspective. Present a profile of Indian Rural market.Study and analyse the consumer

behavior in rural areas.Examine the product and brand penetration in rural markets.Analyze

marketing of consumer product in rural markets.Present marketing strategy frame for

marketing consumer products in rural areas.SCOPE OF THE STUDY: The study is

restricted to selected districts of UTTAR PRADESH. Further, product and brand penetration

is examined. As regards marketing of consumer products in rural areas, the study analyzes

products from non durable category ( a bathing soap, detergents, tea, coffee, shampoo) and

from durable category ( a wrist watch, television, refrigerator, fan and bicycle). Data

collection Sample unit: 1. working people (including men &women), basically

farmers. 2. college students 3. school students 4. senior citizen Sample

size: 1. working people:32% 2. college students:29% 3. school

students:23% 4. senior citizens:16% Sampling region: I have selected uttar

pradesh, of Uttar Pradesh as the area of study.I have chosen BHOWAPUR, MORTI,

SHAHPUR and ATTOR as areas of research. The population status of these areas can be

shown in a tabulated manner, which is given as follows: Area Population BHOWAPUR2500MORTI3000SHAHPUR5000ATTOR4000 Data collection

method: 1.Primary data: it will be collected with the help of a self administered

questionnaire. This questionnaire aims to gather information related to various Branded

products. Questionnaire design: As the questionnaire is self administrated one, the

survey is kept simple and user friendly. Words Used in questionnaire are readily

Understandable to all respondent. Also technical jargons are avoided to ensure that there is no

confusion for respondents. 2.Secondary data: it will be collected with the help of books,

research papers, magazines, news papers, journals, Internet, etc. Review of

Literature Rural market is one of the best opportunities for the FMCG sector. In some

sense we can say that rural market is future of FMCG. 1.Basu Purba (2004),suggested

that the lifestyle of rural consumers is changing. Rural Indian market and the marketing

strategy have become the latest marketing buzzword for most of the FMCG majors. She

added the strategies of different FMCG companies for capturing rural market like Titan’s

Sonata watches, Coco Cola’s 200mlbottle, different strategies of HUL and Marico etc. She

takes into consideration the study of National Council for Applied Economic Research

(NCAER).According to the NCAER projections, the number of middle and high-

income households in rural area is expected to grow from 140 million to 190 million by

2007.In urban India, the same is expected to grow from 65 million to 79 million. Thus, the

absolute size of rural India is expected to be double that of urban India. 2.Tognatta

Pradeep (2003),suggested that ,the economic growth in India's agricultural sector in last year

was over 10%,compared with 8.5%in the industrial sector. This implies a huge market

potentiality for the marketer to meet up increasing demand. Factors such as village

psyche, strong distribution network and market awareness are few prerequisites for

making a dent in the rural markets. The model is of the stolid Anglo-Dutch conglomerate

Unilever Group, which has enjoyed a century-long presence in India through its subsidiary

Hindustan Lever Ltd. It was Hindustan Lever that several years ago popularized the idea of

selling its products in tiny packages. Its sachets of detergent and shampoo are in great

demand in Indian villages. Britannia with its low priced Tiger brand biscuits has become

some of the success story in rural marketing. . 3. Dr. N. Rajendhiran(MBA, PhD)/

Mr. S. Saiganesh(MBA, MA, M.Phil)/ Ms. P. Asha(MBA) Prime Minister Dr.

Manmohan Singh recently talked about his vision for rural India: "My vision of rural India is

of a modern agrarian, industrial and services economy co-existing side by side, where people

can live in well-equipped villages and commute easily to work, be it on the farm or in the

non-farm economy. There is much that modern science and technology can do to realise this

vision. Rural incomes have to be increased. Rural infrastructure has to be improved. Rural

health and education needs have to be met. Employment opportunities have to be created in

rural areas." 'Go rural' is the slogan of marketing gurus after analyzing the socio-

economic changes in villages. The Rural population is nearly three times the urban, so that

Rural consumers have become the prime target market for consumer durable and non-durable

products, food, construction, electrical, electronics, automobiles, banks, insurance companies

and other sectors besides hundred per cent of agri-input products such as seeds, fertilizers,

pesticides and farm machinery. The Indian rural market today accounts for only about Rs 8

billion of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So

clearly there seems to be a long way ahead. Although a lot is spoken about the immense

potential of the unexplored rural market, advertisers and companies find it easier to vie for a

share of the already divided urban pie. The success of a br and in the Indian rural

market is as unpredictable as rain. It has always been difficult to gauge the rural market.

Many brands, which should have been successful, have failed miserably. More often than not,

people attribute rural market success to luck. Therefore, marketers need to understand the

social dynamics and attitude variations within each village though nationally it follows a

consistent pattern looking at the challenges and the opportunities which rural markets offer to

the marketers it can be said that the future is very promising for those who can understand the

dynamics of rural markets and exploit them to their best advantage. A radical change in

attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they

can successfully impress on the 230 million rural consumers spread over approximately six

hundred thousand villages in rural India. RURAL INDIA…a new dawn India

needs creative solutions to start a revolution which can take its villages fast forward in time –

converting them into economically viable units and growth engines, harnessing the power of

the villagers, and opening up new horizons with the promise of a better tomorrow. 43434018415 INTRODUCTION “India lives in her villages”. As

described by Adi Godrej, Chairman , Godrej Group – “The rural consumers is discerning and

the rural market is vibrant . At the current of growth , it will soon outstrip the urban market.

The rural market is no longer sleeping but we are”. Before gamboling into issues like

where the Indian rural market stands and the opportunities for corporate’s to explore there...

let's look at the definition of urban and rural India. The Census defined urban India as - "All

the places that fall within the administrative limits of a municipal corporation, municipality,

cantonment board etc or have a population of at least 5,000 and have at least 75 per cent male

working population in outside the primary sector and have a population density of at least

400 per square kilometer. Rural India, on the other hand, comprises all places that are not

urban!" In our country over 70%of the total population live in villages.

There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies

form 8 to 9 percent. Agriculture and agriculture related activities contribute to about

75%of the income in rural areas. The general impression is that the rural markets have

potential only for agricultural inputs like seeds, fertilizers and pesticides, cattle feed and

agricultural machinery. More than 50%of the national income is generated in rural India and

there are opportunities to market modern goods and services in rural areas and also market

agricultural products in urban areas. Infact it has been estimated that the rural markets are

growing at fives times the rate of urban markets. About 70% of bicycles, mechanical watches

and radios and about 60%of batteries, sewing machine and table fans are sold in rural India.

At the same time the sales of color television, washing machines, refrigerators, shampoos,

face cream, mosquito repellent and tooth paste are very low and there is tremendous potential

for such products in rural markets. Now for some facts and figures The Indian rural

market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent

durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus

claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Time and again marketing practitioners have waxed eloquent about the potential of the

rural market. But when one zeroes in on the companies that focus on the rural market, a mere

handful names come to mind. Hindustan Lever Limited (HLL) is top of the mind with their

successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin

of HLL's strategy has been to focus on penetrating the market down the line and focusing on

price point. Furthermore, activating the brand in the rural market through activities, which are

in line with the brand itself, is what sums up HLL's agenda as far as the rural market is

concerned informs MindShare Fulcrum general manager R Gowthaman. Amul is another

case in point of aggressive rural marketing. Some of the other corporates that are slowly

making headway in this area are Coca Cola India, Colgate, Eveready Batteries, LG

Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero

Honda to name a few. Khaitan fans' ad on a horse cartWheel's wall painting We

can safely say that until some years ago, the rural market was being given a step-motherly

treatment by many companies and advertising to rural consumers was usually a hit and miss

affair. More often than not, the agenda being to take a short-cut route by pushing urban

communication to the rural market by merely transliterating the ad copy. Hence advertising

that is rooted in urban sensitivities didn't touch the hearts and minds of the rural consumer.

While, this is definitely changing, the process is slow. The greatest challenge for advertisers

and marketers continues to be in finding the right mix that will have a pan-Indian rural

appeal. Coca Cola, with their Aamir Khan ad campaign succeeded in providing just

that. Lifebuoy's wall painting in rural India Corporates are still apprehensive to

"Go Rural." A few agencies that are trying to create awareness about the rural market and its

importance are Anugrah Madison, Sampark Marketing and Advertising Solutions Pvt Ltd,

MART, Rural Relations, O&M Outreach, Linterland and RC&M, to name a few. Also, the

first four agencies mentioned above have come together to form The Rural Network. The

paramount objective of the Network is to get clients who are looking for a national strategy in

rural marketing and help them in executing it across different regions. Interestingly, the

rural market is growing at a far greater speed than its urban counterpart. "All the data

provided by various agencies like NCAER, Francis Kanoi etc shows that rural markets are

growing faster than urban markets in certain product categories at least. The share of FMCG

products in rural markets is 53 per cent, durables boasts of 59 per cent market share.

Therefore one can claim that rural markets are growing faster than urban markets," says

Sampark Marketing and Advertising Solutions Pvt Ltd managing director R A

Patankar. "Yaara da Tashan..." McCann Erickson's ads with Aamir Khan created

universal appeal for Coca Cola Coca-Cola India tapped the rural market in a big way

when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The

company, on its behalf, has also been investing steadily to build their infrastructure to meet

the growing needs of the rural market, which reiterates the fact that this multinational has

realised the potential of the rural market is going strength to strength to tap the same. In

2000, ITC took an initiative to develop direct contact with farmers who lived in far-flung

villages in Madhya Pradesh. ITC's E-choupal was the result of this initiative. Clearly the

main challenge that one faces while dealing with rural marketing is the basic understanding

of the rural consumer who is very different from his urban counterpart. Also distribution

remains to be the single largest problem marketers face today when it comes to going rural.

"Reaching your product to remote locations spread over 600,000 villages and poor

infrastructure - roads, telecommunication etc and lower levels of literacy are a few hinges

that come in the way of marketers to reach the rural market," says MART managing director

Pradeep Kashyap. Citing other challenges in rural marketing, Patankar says,

"Campaigns have to be tailor made for each product category and each of the regions where

the campaign is to be executed. Therefore a thorough knowledge of the nuances of language,

dialects and familiarity with prevailing customs in the regions that you want to work for is

essential. The other challenge is the reach and the available means of reaching out to these

markets, hence the video van is one of the very effective means of reaching out physically to

the rural consumers." The fact of the matter remains that when compared to the Indian

urban society, which is turning into a consumerism society; the rural consumer will always

remain driven by his needs first and will therefore be cost conscious and thrifty in his

spending habits. "Decision-making is still conscious and deliberated among the rural

community. But nevertheless, the future no doubt lies in the rural markets, since the size of

the rural market is growing at a good pace. There was a time when market predictions were

made on the basis of the state of the monsoon but this trend has changed over the years; there

is a large non farming sector, which generates almost 40 per cent of the rural wealth. Hence

the growth in the rural markets will be sustained to a large extent by this class in addition to

the farmer who will always be the mainstay of the rural economy," affirms Patankar. "Although the melting of the urban - rural divide will take a while, this is not for want of

the availability of the means but for want of the rural consumer's mindset to change; which

has its own logic, which is driven by tradition, custom and values that are difficult to shed,"

he points out. Satellite dish antennas reach rural India Fulcrum's Gowthaman says,

"The biggest impending factor or deterrent on rural monies going up is that there is a general

sense of trying to benchmark cost per contact (CPC). The television CPC is going to anyways

be cheaper to rural CPC and unless and until the volume - value equation turns the other way

round, you will not be able to spend disproportionate monies in the rural market." Typical shop in rural India stocked with sachets, etc For HLL, a one rupee or a five

rupee sachet or the Kutti Hamam (the small Hamam) helps in giving the consumers a trial

opportunity. While it does help in generate volume but not in terms of values. "Till the time

that volume - value equation is managed better, the CPC is preventing anybody to look at

rural at a large scale activation programme," reiterates Gowthaman. Ultimately, the ball

lies in the court of rural marketers. It's all about how one approaches the market, takes up the

challenge of selling products and concepts through innovative media design and more

importantly interactivity. Anugrah Madison's chairman and managing director RV

Rajan sums up, "There is better scope for language writers who understands the rural and

regional pulse better. I also see great scope for regional specialists in the areas of rural

marketing - specialists like Event Managers, Wall painters, folk artists, audio visual

production houses. In fact all those people who have specialised knowledge of a region are

bound to do well, thanks to the demands of the rural marketers." So the fact remains

that the rural market in India has great potential, which is just waiting to be tapped. Progress

has been made in this area by some, but there seems to be a long way for marketers to go in

order to derive and reap maximum benefits. Moreover, rural India is not so poor as it used to

be a decade or so back. Things are sure a changing! INDIA INFRASTRUCTURE The best barometer of country’s economic standing is measured by its GDP. India, the

second most populated country of more than 1100 million has emerged as one of the fastest

growing economies. It is a republic with a federal structure and well-developed independent

judiciary with political consensus in reforms and stable democratic environment .In 2008-09

India’s economy-GDP grew by 6.5% due to global recession. In the previous four

years,economy grew at 9%.The Indian economy is expected sustain a growth rate of 8% for

the next three years upto 2012. With the expected average annual compounded growth rate of

8.5%, India's GDP is expected to be USD 1.4 trillion by 2017 and USD 2.8 trillion by 2027.

Service sector contribute to 50% of India‘s GDP and the Industry and agriculture sector 25%

each.Investment Opportunities In Indian Infrastructure The robust current growth in

GDP has exposed the grave inadequacies in the country’s infrastructure sectors. The strong

population growth in India and its booming economy are generating enormous pressures to

modernize and expand India’s infrastructure. The creation of world class infrastructure would

require large investments in addressing the deficit in quality and quantity. More than USD

475 bn worth of investment is to flow into India’s infrastructure by 2012. No country in the

world other than India needs and can absorb so many funds for the infrastructure sector. With

the above investments India’s infrastructure would be equal to the best in the world by

2017. In the next five years planned infrastructure investment in India in some key

sectors are (at current prices): Modernization of highways -US$ 75 billion, Development of

civil aviation US$ 12 billion, Development of Irrigation system- US$ 18 billion,

Development of Ports-US$ 26 billion, Development of Railways- US$ 71 billion,

Development of Telecom- US$ 32 billion, Development of Power -US$ 232 billion. Thus in

the eleventh five year plan ,investment in the above sectors (Aviation

infrastructure ,Construction infrastructure, Highway infrastructure ,Power infrastructure, Port

infrastructure ,Telecom infrastructure ) will be US$ 384 billions(Rs 17,20,000 Crores)

considering the huge infrastructure market potential in India. In addition to the above,

investments to the tune of US$ 91 billions have been planned in other infrastructure sectors

like Tourism infrastructure ,Urban infrastructure ,Rural infrastructure, SEZs ,and water

infrastructure and sanitation infrastructure thus making the total infrastructure investments in

the eleventh plan period 2007-08 to 2011-12 as US$475 billions. Domestic and global

infrastructure funds have exposure to Indian infrastructure sectors. Rural Marketing Rural marketing involves the process of developing, pricing, promoting, distributing rural

specific product and a service leading to exchange between rural and urban market which

satisfies consumer demand and also achieves organizational objectives. URBANRURAL RURALRURALURBANRURAL It is a two-way marketing

process wherein the transactions can be: Urban to Rural: A major part of rural

marketing falls into this category. It involves the selling of products and services by urban

marketers in rural areas. These include: Pesticides, FMCG Products, Consumer durables,

etc. Rural to Urban: Transactions in this category basically fall under agricultural

marketing where a rural producer seeks to sell his produce in an urban market. An agent or a

middleman plays a crucial role in the marketing process. The following are some of the

important items sold from the rural to urban areas: seeds, fruits and vegetables, milk and

related products, forest produce, spices, etc. Rural to Rural: This includes the activities

that take place between two villages in close proximity to each other. The transactions relate

to the areas of expertise the particular village has. These include selling of agricultural tools,

cattle, carts and others to another village in its proximity. Rural marketing requires the

understanding of the complexities. Indian agricultural industry has been growing at a

tremendous pace in the last few decades. The rural areas are consuming a large number of

industrial and urban manufactured products. The rural agricultural production and

consumption process plays a predominant role in developing the Indian economy. This has

designed a new way for understanding a new process called Rural Marketing. The

concept of rural marketing has to be distinguished from Agricultural marketing. Marketing is

the process of identifying and satisfying customers needs and providing them with adequate

after sales service. Rural marketing is different from agricultural marketing, which signifies

marketing of rural products to the urban consumer or institutional markets. Rural marketing

basically deals with delivering manufactured or processed inputs or services to rural

producers, the demand for which is basically a derived outcome. Rural marketing

scientists also term it as developmental marketing, as the process of rural marketing involves

an urban to rural activity, which in turn is characterised by various peculiarities in

terms of nature of market, products and processes. Rural marketing differs from agricultural

or consumer products marketing in terms of the nature of transactions, which includes

participants, products, modalities, norms and outcomes. The participants in case of Rural

Marketing would also be different they include input manufacturers, dealers, farmers, opinion

makers, government agencies and traders. Rural marketing needs to combine concerns

for profit with a concern for the society, besides being titled towards profit. Rural market for

agricultural inputs is a case of market pull and not market push. Most of the jobs of marketing

and selling are left to the local dealers and retailers. The market for input gets

interlocked with other markets like output, consumer goods, money and labour. INDIAN RURAL MARKET: Rural marketing in India is not much developed there

are many hindrances in the area of market, product design and positioning, pricing,

distribution and promotion. Companies need to understand rural marketing in a broader

manner not only to survive and grow in their business, but also a means to the development

of the rural economy. One has to have a strategic view of the rural markets so as to know and

understand the markets well. In the context of rural marketing one has to understand the

manipulation of marketing mix has to be properly understood in terms of product usage.

Product usage is central to price, distribution, promotion, branding, company image

and more important farmer economics, thus any strategy in rural marketing should be given

due attention and importance by understanding the product usage, all elements of marketing

mix can be better organised and managed. Evolution of Rural Marketing PhaseOriginFunctionMajorProductsSourceMarketDestinationMarketIBefore Mid-1960

(from independence to green revolution)Agricultural

MarketingAgriculturalProduceRuralUrbanIIMid- Sixties (Green revolution to Pre-

liberalization period)Marketing OfAgricultural InputsAgriculturalInputsUrbanRuralIIIMid-

Nineties (Post-liberalization period on 20th century)RuralMarketingConsumables

AndDurables ForConsumption & ProductionUrban & RuralRuralIV21st

centuryDevelopmental marketingAll products & servicesUrban & RuralUrban & Rural Phase I ( from Independence to Green Revolution): Before the advent of the Green

revolution, the nature of rural market was altogether different. Rural marketing then referred

to the marketing of rural products in rural & urban products. Phase II (Green Revolution

to Pre-liberalization period): During these times, due to the advent & spread of the

Green Revolution, rural marketing represented marketing of agriculture inputs in rural

markets & marketing of rural produce in urban areas. Phase III (Post-liberalization

period on 20th century): The third phase of rural marketing started after the

liberalization of the Indian economy. In this period, rural marketing represented the

emerging, distinct activity of attracting & serving rural markets to fulfill the need & wants of

rural households, peoples & their occupations. Phase IV (21st century): Learning

from its rural marketing experiences after the independence, the corporate world has finally

realized the quick-fix solutions & piecemeal approaches will deliver only limited results in

the rural markets. And, if an organization wants to tap the real potential of the rural market, it

needs to make a long-term commitment with this market. Its approach & strategies must not

focus in just selling products & services, but they should also aim at creating an environment

for this to happen. The objective of rural marketing in the current phase is the

improvement of the quality of life by satisfying the needs & wants of the customers, not

through atand-alone products or services, but by presenting comprehensive & integrated

solutions which might involve a set of inter-related products & services. Till recently,

the focus of marketers in India was the urban consumer and by large number specific efforts

were made to reach the rural markets. But now it is felt that with the tempo of development

accelerating in rural India, coupled with increase in purchasing power, because of scientific

agriculture, the changing life style and consumption pattern of villagers with increase in

education, social mobility, improved means of transportations and communication and other

 penetrations of mass media such as television and its various satellite channels have

exposed rural India to the outside world and hence their outlook to life has also changed.

Because of all these factors, rural India is now attracting more and more marketers. Increase in competition, saturated urban markets, more and move new products demanding

urban customers, made the companies to think about new potential markets. Thus, Indian

rural markets have caught the attention of many companies, advertisers and multinational

companies. According to a recent survey conducted by the National Council for Applied

Economic Research (NCAER), the purchasing power of the rural people has increased due to

increase in productivity and better price commanded by the agricultural products. By and

large this rise in purchasing power remains unexploited and with the growing reach of the

television, it is now quite easy for the marketers to capture these markets. Rural

marketing has become the latest mantra of most corporate. Companies like Hindustan Lever,

Colgate Palmolive, Britannia and even Multinational Companies (MNCs) like Pepsi, Coca

Cola, L.G., Philips, and Calvin kare are all eyeing rural markets to capture the large Indian

market. Coming to the frame work of Rural Marketing, Rural Marketing broadly

involves reaching the rural customer, understanding their needs and wants, supply of goods and services to meet their requirements, carrying out after sales service that leads to

customer satisfaction and repeat purchase/sales. The Indian growth story is now

spreading itself to India's hinterlands. Rural India, home to about two-thirds of the country’s

1 billion population, is not just witnessing an increase in its income but also in consumption

and production. The union budget for 2009-10 hiked the allocation for the National Rural

Employment Guarantee Act (NREGA) to US$ 8.03 billion, giving a further boost to the rural

economy. This is in addition to the farmer loan waiver of US$ 13.86 billion and the ambitious

Bharat Nirman Programme with an outlay of US$ 34.84 billion for improving rural

infrastructure. Additionally, the rural economy has not been impacted by the global economic

slowdown, according to a recent study by the Rural Marketing Association of India (RMAI).

The study found that the rural and small town economy which accounts for 60 per cent of

India’s income has remained insulated from the economic slowdown. Moreover, rural

incomes are on the rise driven largely due to continuous growth in agriculture for four

consecutive years. According to a McKinsey survey conducted in 2007, the rural India

market would grow almost four times from its existing size in 2007, which was estimated at

US$ 577 billion. RURAL INFRASTRUCTURE:1) 46 percent of villages are

connected by all weather roads. 2) 84 percent of villages are electrified. 3) 5700

regulated markets. In the early 2000s, around 700 million people, i.e. 70% of the Indian

population lived in 6,27,000 villages, in rural areas. Of this, 90% were concentrated in

villages with population less than 2000. HYPERLINK

"http://www.icmrindia.org/casestudies/catalogue/Marketing1/Unilever%20-%20Rural

%20Marketing.htm" l "b3" 3 According to a study conducted in 2001 by the National

Council for Applied Economic Research (NCAER), there were as many "middle income and

above" households in rural areas as there were in urban areas. There were almost twice

as many "lower income households" in rural areas as in urban areas. There were 2.3 million

"highest income" households in urban areas as against 1.6 million in rural areas. NCAER

projections indicated that the number of "middle income and above" households was

expected to grow to 111 million in rural India by 2007, compared to 59 million in urban

India. Gone were the days when a rural consumer had to go to a nearby town or city to buy a

branded product. The growing power of the rural consumer was forcing big companies to

flock to rural markets. At the same time, they also threw up major challenges for

marketers. FMCG There was a time when the FMCG companies ignores rural

market,they took no any interest to produced or sell products in rural market in India.It was

the initial stage of FMCG companies in India.As per as the time had passed,the strategy

and marketing style of FMCG companies had been changed. The rural market is the

one of the best opportunity for the FMCG sector in the India.It is wider and less competitive

market for the FMCG.As the income level of the rural consumers increasing,the demand of

FMCG is increasing continuously. Top Players in FMCG Sector 1.Hindustan lever limited (HLL) 2.ITC (Indian Tobacco Company) 3.Nestle

India 4.GCMMF (AMUL) 5.Dabur India 6.Asian Paints (India) 7.Cadbury India 8.Britannia Industries 9.Procter &Gamble Hygiene &Health

Care 10.Marico Industries Secondary Players 1.Colgate-Palmolive

(India)Ltd. 2.Godrej Consumers Product Ltd. 3.Nirma Ltd. 4.Tata Tea

Ltd. 5.Parle Agro Rural consumers spend around 13 per cent of their income, the

second highest after food (35 per cent), on fast moving consumer goods (FMCG), as per a

RMAI study. The FMCG industry in India was worth around US$ 16.03 billion in

August 2008 and the rural market accounted for a robust 57 per cent share of the total FMCG

market in India. The FMCG sector saw rural markets post 20 per cent growth, ahead of

the 17-18 per cent growth from urban India, aided by three years of good monsoon, higher

prices of farm produce and farm-loan waiver. Most FMCG companies are now

working on increasing their distribution in smaller towns and focussing on marketing and

operations programme for semi-urban and rural markets. For instance, Godrej

Consumer Products intends to increase revenue from rural areas from 38 per cent to 55 per

cent in the next three years by increasing its distribution network substantially. The products

will reach out to 50,000 villages in the next couple of years from the present 18,000 villages

while the number of towns covered will double from 3,300 to almost 6,500 in a year. Retail The rural retail market is currently estimated at US$ 112 billion, or around 40

per cent of the US$ 280 billion retail market. Major domestic retailers like AV Birla, ITC,

Godrej, Reliance and many others have already set up farm linkages. Hariyali Kisan Bazaars

(DCM) and Aadhars (Pantaloon-Godrej JV), Choupal Sagars (ITC), Kisan Sansars (Tata),

Reliance Fresh, Project Shakti (Hindustan Unilever) and Naya Yug Bazaar are established

rural retail hubs. Pharmaceuticals According to a report by McKinsey, the rural

and tier-II pharma market will account for almost half of the growth till 2015. The tier-II

market will grow to 44 per cent by 2015, amounting to US$ 8.8 billion. This growth

will be further augmented with the government increasing the allocation under National Rural

Health Mission (NRHM) by US$ 424.3 million over interim budget estimate 2009-10 of US$

2.49 billion. Elder Pharmaceuticals is increasing its focus on the rural market. The

company that largely makes active pharmaceutical ingredients, plans to increase its sales by

8-9 per cent mainly from rural areas and has allocated US$ 8.26 million to strengthen the

sales force for this segment. Telecommunication A Gartner forecast revealed that

Indian cellular services revenue will grow at a compound annual growth rate (CAGR) of 18.4

per cent to touch US$ 25.6 billion by 2011, with most of the growth coming from rural

markets. Also, a joint Confederation of Indian Industries (CII) and Ernst & Young report

reveals that of the next 250 million Indian wireless users, approximately 100 million (40 per

cent) are likely to be from rural areas, and by 2012, rural users will account for over 60 per

cent of the total telecom subscriber base in India. In a bid to acquire rural

subscribers, most Indian telecom operators have started investing in infrastructure to roll out

their services in these areas. Realising this as a huge potential, small Indian handset

manufacturing companies, including Micromax, Intex Technologies and Karbonn, have lined

up a marketing spent of around US$ 21.02 million for the financial year 2009-10. 

 Automobiles For the auto industry, semi-urban and rural markets contribute close

to 40 per cent of sales, led by demand for two-wheelers, entry-level cars and tractors.

Significantly, car sales grew 8.3 per cent in June 2009, aided by rising demand in semi-urban

and rural markets. Mahindra & Mahindra is bullish on the rural and semi-urban markets, with

its utility vehicle, Scorpio clocking 60-65 per cent sales from the rural markets as

against 20 per cent earlier. TVS Motor also registered around 50 per cent of its sales from the

rural and semi-urban markets. Consumer durables A survey carried out by RMAI

has revealed that 59 per cent of durables sales come from rural markets. Presently,

around 50 per cent of sales in the US$ 5.14 billion consumer electronics industry come from

the urban markets, 30 per cent from tier-II and -III towns and balance 20 per cent from rural

India. Many leading consumer durable companies are now increasing their presence in

rural India. Recently, LG has set up 45 area offices and 59 rural and remote-area offices.

Moreover, it has outlined plans to invest around US$ 40 million towards development of

entry-level products targeted at rural markets. Samsung has also rolled out its 'Dream

Home' road show which was to visit 48 small towns in 100 days in an effort to increase brand

awareness of its products. Samsung expects that its rural revenues would increase to US$

287.7 million in 2009 from US$ 164.4 million last year. The company also plans to expand

its sales channel by 25-30 per cent in rural India. Whirlpool, is eyeing rural markets in

India for its next phase of growth. The company is set to tap markets with a population

between 100,000 and 500,000 in the first phase, and in the next phase, will look at expanding

the base in villages with a population of 50,000. Nature of Rural Market Large,

Diverse and Scattered Market: Rural market in India is large, and scattered into a number of

regions. There may be less number of shops available to market products. Major

Income of Rural consumers is from Agriculture: Rural Prosperity is tied with agriculture

prosperity. In the event of a crop failure, the income of the rural masses is directly

affected. Standard of Living and rising disposable income of the rural customers: It is

known that majority of the rural population lives below poverty line and has low literacy rate,

low per capital income, societal backwardness, low savings, etc. But the new tax structure,

good monsoon, government regulation on pricing has created disposable incomes.

Today the rural customer spends money to get value and is aware of the happening around

him. Traditional Outlook: Villages develop slowly and have a traditional outlook.

Change is a continuous process but most rural people accept change gradually. This is

gradually changing due to literacy especially in the youth who have begun to change the

outlook in the villages. Rising literacy levels: It is documented that approximately 45%

of rural Indians are literate. Hence awareness has increases and the farmers are well-informed

about the world around them. They are also educating themselves on the new technology

around them and aspiring for a better lifestyle. Diverse socioeconomic background:

Due to dispersion of geographical areas and uneven land fertility, rural people have disparate

socioeconomic background, which ultimately affects the rural market. Infrastructure

Facilities: The infrastructure facilities like cemented roads, warehouses, communication

system, and financial facilities are inadequate in rural areas. Hence physical distribution is a

challenge to marketers who have found innovative ways to market their products. Some

Myths: Myth-1: Rural Market Is a Homogeneous MassReality: It’s a heterogeneous

population. Various Tiers are present depending on the incomes like Big Landlords; Traders,

small farmers; Marginal farmers: Labors, artisans. State wise variations in rural

demographics are present viz. Literacy (Kerala 90%, Bihar 44%) and Population below

poverty line (Orissa 48%, Punjab 6%). Myth-2: Disposable Income Is LowReality:

Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for rural sector is 27.4

million as compared to the figure of 29.5 million for urban sector. Rural incomes CAGR was

10.95% compared to 10.74% in urban between 1970-71 and 1993-94. Myth-3:

Individuals Decide About PurchasesReality: Decision making process is collective. Purchase

process- influencer, decider, buyer, one who pays can all be different. So marketers must

address brand message at several levels.Rural youth brings brand knowledge to Households

(HH). Is rural marketing transactional or developmental in its approach? It is true,

rural markets have become an attractive proposition for commercial business

organizations. The role of rural marketing as such is more developmental than

transactional. It is more a process of delivering better standard of living and quality of life to

the rural environment taking into consideration the prevailing village milieu. Transactional Vs Developmental: For better comprehension of this role let us distinguish

development marketing and transactional marketing. Table brings out the differences in

brief. Transactional Vs Development Marketing S.NoAspectTransactionalDevelopment1.ConceptConsumer orientation, Marketing

conceptSociety orientation, societal concept2.RoleStimulating and conversional

marketingCatalytic and transformation agent3.FocusProduct-market fitSocial change4.Key

taskProduct innovations and communicationsSocial innovations and

communications5.Nature of activityCommercialSocio-cultural,

economic6.ParticipantsCorporate enterprises, SellersGovernment, voluntary agencies,

corporate enterprises, benefactors7.OfferProducts and servicesDevelopment,

projects/schemes/programs8.Target groupBuyersBeneficiaries and

buyers9.CommunicationFunctionalDevelopmental10.GoalProfits, Customer

satisfactionBrand imageMarket developmentCorporate Image11.Time-FrameShort-

mediumMedium-Long12.MotivationProfit-motiveBusiness policyService-motiveIdeological

or Public policy Model: The model of rural marketing represents a combination of the

transactional and developmental approaches. Rural marketing process is both a catalyst

as well as an outcome of the general rural development process. Initiation and management

of social and economic change in the rural sector is the core of the rural marketing process. It

becomes in this process both benefactor and beneficiary. Innovation is the essence of

marketing. Innovative methods of social change for successful transformation of traditional

society are virtual. Such a change narrows the rural-urban divide. The process of

transformation can be only evolutionary and not revolutionary. The growth of the rural

market can be a planned evolutionary process based on strategic instruments of change rather

than constitute just short-term opportunities for commercial gains. The exposure of

ruralites to a variety of marketing transactions during the change process puts them in the role

of beneficiaries than of just `buyers' of modern inputs and infrastructural services. Communication is the vital element of rural marketing. It should serve to resolve social

conflicts, encourage cooperation and strengthen competitive spirit during interactions

between rural and urban as well as within rural areas. Another critical point for

communication is the point of conversion of ruralite from an "induced beneficiary" to an

"autonomous buyer". Classification of rural consumers The rural consumers are

classified into the following groups based on their economic status: The Affluent

Group: They are cash rich farmers and a very few in number. They have affordability but not

form a demand base large enough for marketing firms to depend on. Wheat farmers in Punjab

and rice merchants of Andhra Pradesh fall in this group. The Middle Class: This is one

of the largest segments for manufactured goods and is fast expanding. Farmers cultivating

sugar cane in UP and Karnataka fall in this category. The Poor: This constitutes a huge

segment. Purchasing power is less, but strength is more. They receive the grants from

government and reap the benefits of many such schemes and may move towards the

middleclass. The farmers of Bihar and Orissa fall under this category. Roadblocks of

Indian Rural Market There are several roadblocks that make it difficult to progress in

the rural market. Marketers encounter a number of problems like dealing with physical

distribution, logistics, proper and effective deployment of sales force and effective marketing

communication when they enter rural markets. The major problems are listed below. Standard of living: The number of people below the poverty line is more in rural markets.

Thus the market is also underdeveloped and marketing strategies have to be different from

those used in urban marketing. Low literacy levels: The low literacy levels in rural

areas leads to a problem of communication. Print media has less utility compared to the other

media of communication. Low per capita income: Agriculture is the main source of

income and hence spending capacity depends upon the agriculture produce. Demand may not

be stable or regular. Transportation and warehousing: Transportation is one of the

biggest challenges in rural markets. As far as road transportation is concerned, about 50% of

Indian villages are connected by roads. However, the rest of the rural markets do not even

have a proper road linkage which makes physical distribution a tough task. Many villages are

located in hilly terrains that make it difficult to connect them through roads. Most marketers

use tractors or bullock carts in rural areas to distribute their products. Warehousing is

another major problem in rural areas, as there is hardly any organized agency to look after the

storage issue. The services rendered by central warehousing corporation and state

warehousing corporations are limited only to urban and suburban areas. Ineffective

distribution channels: The distribution chain is not very well organized and requires a large

number of intermediaries, which in turn increases the cost and creates administrative

problems. Due to lack of proper infrastructure, manufacturers are reluctant to open outlets in

these areas. They are mainly dependent on dealers, who are not easily available for rural

areas. This is a challenge to the marketers. Many languages and diversity in culture:

Factors like cultural congruence, different behaviour and language of the respective areas

make it difficult to handle the customers. Traits among the sales force are required to match

the various requirements of these specific areas. Lack of communication system: Quick

communication is the need of the hour for smooth conduct of business, but it continues to be

a far cry in rural areas due to lack of communication facilities like telegraph and

telecommunication systems etc. The literacy rate in the rural areas is rather low and

consumer’s behaviour in these areas is traditional, which may be a problem for effective

communication. Spurious brands: Cost is an important factor that determines

purchasing decision in rural areas. A lot of spurious brands or look-alikes are available,

providing a low cost option to the rural customer. Many a time the rural customer may not be

aware of the difference due to illiteracy. Seasonal demand: Demand may be seasonal

due to dependency on agricultural income. Harvest season might see an increase in

disposable income and hence more purchasing power. Dispersed markets: Rural

population is highly dispersed and requires a lot of marketing efforts in terms of distribution

and communication. Attractiveness of rural market Large Population: The rural

population is large and its growth rate is also high. Despite the rural urban migration, the

rural areas continue to be the place of living majority of Indians. Rising Rural

Propensity: Income Group2000-012005-062008-09Above Rs. 100,0001.63.85.6Rs.

77,001-100,0002.74.75.8Rs. 50,001-77,0008.313.022.4Rs. 25,001-

50,00026.041.144.6Rs.25,000 & below61.437.420.2 Thus we see that population

between income level of Rs. 25,000- 77,000 will increase from 34.3% in 1994-95 to 67.0% in

2006-07. The rural consuming class is increasing by about 3-4% per annum, which roughly

translates into 1.2 million new consumers yearly. Growth in consumption: Per

capita household expenditure (in Rs.) LevelNo.StatesExpenditureHigh (Above Rs

382/-)7Punjab614Kerala604Haryana546Rajasthan452Gujarat416Andhra

Pradesh386Maharashtra384Average (Rs. 382/-)5West Bengal382Orissa381Tamil

Naidu381Uttar Pradesh373Karnataka365Low (Below Rs. 382/-)3Assam338Madhya

Pradesh326Bihar289 Distribution household’s income wise (projection in Rs

Crore) Income groups2001 – 022006 – 07RuralRuralTotalNo.%TotalNo.

%High0.260.0726.90.520.1223.1Middle12.047.7364.216.7210.3261.8Low5.75.0988.73.683.

5295.7Total18.0412.8971.420.9013.9666.7 Spending pattern (Rural Household’s in

Rs.) Item%RichPoorAverageFood Articles441477395Toiletries20673343Washing

Material13432228Cosmetics10331721Otc Products41369Others9301519Total333166215 Average rural household spends on consumables excluding food grains, milk & vegetables

are Rs. 215/-. Life style changes: Income vs. usage of packed consumer goods (%

of household using) GoodsMonthly household income (Rs.)Up to 350351 – 750751 –

15001501 +Washing Cakes/Bars60788691shampoos57728993Tooth

Paste/Powder22366585bathing soaps20254163Tea (Packaged)22304864 Life cycle

advantage: Stages in life cycle ProductUrbanMarket Growth Rate %RuralPopular

soapsMaturity2GrowthPremium soapsLate growth11Early growthWashing powderLate

growth6Early growthSkin creamsMaturity1.1GrowthTea Maturity4Growth Market

growth rates higher: Growth rates of the FMCG market and the durable market are higher in

rural areas for many products. The rural market share will be more than 50% for the products

like toilet soaps, body talcum powder, cooking medium (oil), cooking medium (vanaspati),

tea, cigarettes and hair oil. Rural marketing is not expensive: Conventional wisdom

dictates that since rural consumers are dispersed, reaching them is costly. However, new

research indicates that the selling in Rural India is not expensive. According to one research it

costs roughly Rs.1 Crore to promote a consumer durable inside a state. This includes the

expenses of advertising in vernacular newspapers, television spots, in-cinema advertising,

radio, van operations and merchandising and point of purchase promotion. Campaign like

this, which can reach millions, costs twice as much in urban area. Remoteness is no

longer a problem: Remoteness in a problem but not insurmountable. The rural distribution is

not much developed for the reasons, Lack of proper infrastructure such as all-weather

roads, electrification and sanitation, and Lack of marketer’s imagination and

initiative. Marketers have so far, failed in analyzing the rural side and exploiting rural

India’s traditional selling system- Haats & Melas.Their near obsession with just duplicating

the urban-type network and that too with very limited success, has kept them blind to the

potential of these two outlets. Rural Vs Urban Marketing No.AspectUrbanRural1PhilosophyMarketing & Societal Concepts & Relationship

MarketingMarketing & Societal Concepts, Development Marketing & Relationship

Marketing2MarketDemandHighLowCompetitionAmong Units In Organized SectorMostly

From Unorganized UnitsConsumersLocationConcentratedWidely

SpreadLiteracyHighLowIncomeHighLowExpenditurePlanned, EvenSeasonal,

VariationNeedsHigh LevelLow

LevelInnovation/AdoptionFasterSlow3ProductAwarenessHighLowConceptKnownLess

KnownPositioningEasyDifficultUsage MethodEasily GraspedDifficult To GraspQuality

PreferenceGoodModerate4PriceSensitiveYesVery muchlevel desiredMedium-highMedium-

low5distribution channelsWholesalers, stockists, retailer, supermarket, specialty stores, &

authorised showroomsVillage shops, “Haats”Transport FacilitiesGoodAverageProduct

AvailabilityHigh Limited6PromotionAdvertisingPrint, audio visual media, outdoors,

exhibitions etc. few languagesTV, radio, print media to some extent. More languagesPersonal

SellingDoor-to-door, frequentlyOccasionallySales PromotionContests, gifts, price

discountGifts, price discountsPublicityGood opportunitiesLess opportunities Special

Products for Rural Markets: Rural Transporter: Mahindra & Mahindra is busy

developing the prototype of what it calls a ‘Rural Transporter’ – basically a hybrid between a

tractor and a rural transport vehicle. The product at 20-25 HP will be targeted at those who

cannot afford a normal tractor and would also fulfill the need of family transporter that could

take in the rural roughs but would be much more comfortable and safer than the conventional

tractor-trolley. Sampoorna TV: LG Electronics, the Korean firm has rejigged the TV to

appeal to local needs. It spent Rs. 21 Lacs to develop a set that would have on-screen displays

in the vernacular languages of Hindi, Tamil and Bengali. The logic, rural consumers

unfamiliar with English would still be able to use the TV without being intimidated. Titan Watches: A recent NCAER study revealed that there is a great potential for watches

in rural areas. In fact it is considered to be a high priority list. It was also found that a rural

consumer looks for the ruggedness of the watch more than the urban consumer does. He

prefers thick watches than slim watches. The biggest problem that the Marketers are

facing in the Rural Markets is Of IMITATIONS. Imitations may result in two types of goods

depending upon the purpose, commitment, and competence of imitator. A poor imitator will

end up in producing deceptive, spurious, fake, copycat products. He dupes the gullible

customer by offering products having close resemblance with the original. In quality, it is

poor cousin to the original. On the other hand, a poor imitator may even produce an improved

version of the original product. In this scenario the job of the Marketer becomes even

more difficult in the sense that he has not to fight other competitors but also the imitated

products. The advantages that these products enjoy in the rural markets are that the

Imitators who are in the villages are making these and they are offering More Margins &

Better credit Facilities. To solve this problem the Marketer has to educate the

consumer about his product and show him the benefits of his products over the imitated

ones. Need-Product Relationships and the changes happening in Rural India NeedsOld ProductsNew ProductsBrushing TeethNeem sticks, Charcoal, Rocksalt,

HuskToothpaste, tooth powderWashing VesselsCoconut fiber, Earthy materials, Brick

Powder, AshWashing Powders, soaps and liquidsTransportBullock Cart, Horses,

DonkeysTractors, LCVs, Mopeds, Scooters, Motor cyclesIrrigationWells, Canals, Water

lifters, Wind MillsBore-wells, Motors, Power Generators, Pump SetsHair WashShikakai

powder, Retha, BesanShampoos and hair care soaps CONSUMER BEHAVIOR IN

RURAL MARKETS: Promotion of brands in rural markets requires the special

measures. Due to the social and backward condition the personal selling efforts have a

challenging role to play in this regard. The word of mouth is an important message carrier in

rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of

rural promotion efforts. The experience of agricultural input industry can act as a guideline

for the marketing efforts of consumer durable and non-durable companies. Relevance of

Mass Media is also a very important factor. The Indian established Industries have the

advantages, which MNC don't enjoy in this regard. The strong Indian brands have strong

brand equity, consumer demand-pull and efficient and dedicated dealer network which have

been created over a period of time. The rural market has a grip of strong country shops,

which affect the sale of various products in rural market. The companies are trying to trigger

growth in rural areas. They are identifying the fact that rural people are now in the better

position with disposable income. The low rate finance availability has also increased the

affordability of purchasing the costly products by the rural people. Marketer should

understand the price sensitivity of a consumer in a rural area. This paper is therefore an

attempt to promote the brand image in the rural market. Indian Marketers on rural

marketing have two understanding (I) The urban metro products and marketing products can

be implemented in rural markets with some or no change. (ii) The rural marketing required

the separate skills and techniques from its urban counter part. The Marketers have following

facilities to make them believe in accepting the truth that rural markets are different in so

many terms.(i) The rural market has the opportunity for.(ii) Low priced products can be

more successful in rural markets because the low purchasing, purchasing powers in rural

markets.(iii) Rural consumers have mostly homogeneous group with similar needs,

economic conditions and problems.(iv) The rural markets can be worked with the different

media environment as opposed to press, film, radio and other urban centric media exposure.

 How does reality affects the planning of marketers? Do villagers have same attitude

like urban consumers? The question arises for the management of rural marketing effects in a

significant manner so than companies can enter in the rural market with the definite goals and

targets but not for a short term period but for longer duration. The Research paper will

discuss the role of regard. The strategy, which will be presented in the paper, can be either

specific or universally applicable. The ultimate objective of all production is

consumption. A free market economy provides freedom to the consumers to buy and

consume goods of their choice. The buying preferences of consumers send signals to

producers to produce various commodities in required quantities. Producers, therefore,

produces only those commodities which are desired by the consumers. In India, consumer

behavior has changed in recent years owing to enhanced awareness, information technology,

and, more importantly, governmental intervention through legislations. India's rural

consumers account for about 73 percent of the total consumers. In recent years, the lifestyle

of a large number of rural consumers in India has changed dramatically and continues to do

so. The buying behavior of the rural consumers is influenced by several factors, such as

socio-economic conditions, cultural environment, literacy level, occupation, geographical

location, efforts on the part of sellers, exposure to the media, etc. This book examines the

buying behavior of India's rural masses and the diverse factors which influence their choices.

The work is useful for understanding the Indian rural consumer psyche in order to formulate

an appropriate marketing strategy. It includes: MediaNewspaper brandSources of

information. RURAL CONSUMER PREFERENCES:In order to assess the buyer behavior

towards certain critical aspects of marketing, the preferences of the consumers is directly

related to:PriceQualityCreditVarietyDealer adviceSpecific brand. PURCHASE

BEHAVIOR: Rural people can buy only from three places includes: From the

shop in the same villageWeekly bazaarFrom the shop of nearby town.Factors influencing

buying behavior The various factors that affect buying behavior of in rural India are: Environmental of the consumer - The environment or the surroundings, within which the

consumer lives, has a very strong influence on the buyer behavior, egs. Electrification, water

supply affects demand for durables. Geographic influences - The geographic location

in which the rural consumer is located also speaks about the thought process of the consumer. For instance, villages in South India accept technology quicker than in other

parts of India. Thus, HMT sells more winding watches in the north while they sell more

quartz watches down south. Family – it is an important buying decision making

organization in consumer markets. Family size & the roles played by family members

exercise considerable influence on the purchase decisions. Industry observers are increasingly

realizing that at times, purchase of durable has less to do with income, but has more to do

with the size of the family & that’s where rural India with joint family structures, becomes an

attractive proposition. Economic factors – The quantum of income & the earning stream

are one of the major deciding factors, which determine to a great extent, what the customer

will be able to buy. Many people in the rural market are below poverty line & for large

number of people, agriculture is the primary occupation. More than 70% of the people are in

small-scale agricultural operation. These factors affect the purchase decision. Place of

purchase - (60% prefer HAATS due to better quality, variety & price) Companies need to

assess the influence of retailers on both consumers at village shops and at haats. Creative use of product - ex Godrej hair dye being used as a paint to colour horns of oxen,

Washing machine being used for churning lassi. The study of product end provides

indicators to the company on the need for education and also for new product ideas. Brand preference and loyalty - (80% of sale is branded items in 16 product categories)

 Cultural factors influencing consumer behavior Cultural factors exert the broadest

and deepest influence on consumer behaviour. The marketer needs to understand the role

played by the buyer’s culture. Culture is the most basic element that shapes a person’s wants

and behaviour. In India, there are so many different cultures, which only goes on to make the

marketer’s job tougher. Some of the few cultural factors that influence buyer behaviour

are: Product (colour, size, design, and shape): There are many examples that support

this point. For example, the Tata Sumo, which was launched in rural India in a white

colour, was not well accepted. But however, when the same Sumo was re-launched as Spacio

(a different name) and in a bright yellow colour, with a larger seating capacity and ability to

transport good, the acceptance was higher. Another good example would be Philips

audio systems. Urban India looks at technology with the viewpoint of ‘the smaller the better’.

However, in rural India, the viewpoint is totally opposite. That is the main reason for the

large acceptance of big audio systems. Thus Philips makes audio systems, which are big in

size and get accepted in rural India by their sheer size. Social practices: There are so

many different cultures, and each culture exhibits different social practices. For

example, in a few villages they have common bath areas. Villagers used to buy one Lifebuoy

cake and cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram soap

bars, which could be used individually. Decision-making by male head: The male in

Indian culture has always been given the designation of key decision maker. For

example, the Mukhiya’s opinion (Head of the village), in most cases, is shared with the rest

of the village. Even in a house the male head is the final decision maker. In rural areas, this

trend is very prominent. Changes in saving and investment patterns: From gold, land,

to tractors, VCR’s, LCV’s 4 A’s approach of Indian Rural Market The rural

market may be appealing but it is not without its problems: Low per capita disposable

incomes that is half the urban disposable income; large number of daily wage earners, acute

dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and

festivals and special occasions; poor roads; power problems; and inaccessibility to

conventional advertising media. However, the rural consumer is not unlike his urban

counterpart in many ways. The more daring MNC’s are meeting the consequent

challenges of availability, affordability, acceptability and awareness (the so-called 4 A’s)

 Availability The first challenge is to ensure availability of the product or service.

India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in

rural areas, finding them is not easy. However, given the poor state of roads, it is an even

greater challenge to regularly reach products to the far-flung villages. Any serious marketer

must strive to reach at least 13,113 villages with a population of more than 5,000.

Marketers must trade off the distribution cost with incremental market saturation. Over the

years, 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. To

service remote village, stockiest use autorickshaws, bullock-carts and even boats in the

backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has

evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the

company depot supplies, twice a week, large distributors which who act as hubs. These

distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG

Electronics defines all cities and towns other than the seven metros cities as rural and semi-

urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59

rural/remote area offices. Affordability The second challenge is to ensure

affordability of the product or service. With low disposable incomes, products need to be

affordable to the rural consumer, most of who are on daily wages. Some companies have

addressed the affordability problem by introducing small unit packs. Most of the shampoos

are available in smaller packs. Fair and lovely was launched in a smaller pack. Colgate

toothpaste launched its smaller packs to cater to the travelling segment and the rural consumers.Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-

gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh

— the so-called `Bimaru' States. Hindustan Lever, among the first MNC’s to realize

the potential of India's rural market, has launched a variant of its largest selling soap brand,

Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has

addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at

Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural

markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The

instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2

and multi serve sachet of 200 gm priced at Rs 15. Acceptability The third

challenge is to gain acceptability for the product or service. Therefore, there is a need to offer

products that suit the rural market. One company which has reaped rich dividends by doing

so is LG Electronics. In 1998, it developed a customized TV for the rural market and

christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year.

Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-

cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets. The

insurance companies that have tailor-made products for the rural market have performed

well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crores in

total premium. The company tied up with non-governmental organizations and offered

reasonably-priced policies in the nature of group insurance covers. 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. Fortunately, however, the

rural consumer has the same likes as the urban consumer — movies and music — and for

both the urban and rural consumer, the family is the key unit of identity. However, the rural

consumer expressions differ from his urban counterpart. Outing for the former is confined to

local fairs and festivals and TV viewing is confined to the state-owned Doordarshan.

Consumption of branded products is treated as a special treat or luxury. Awareness

 Brand awareness is another challenge. Fortunately, however, the rural consumer has

the same likes as the urban consumer — movies and music — and for both the urban and

rural consumer, the family is the key unit of identity. However, the rural consumer

expressions differ from his urban counterpart. Outing for the former is confined to local fairs

and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of

branded products is treated as a special treat or indulgence. Hindustan Lever relies

heavily on its own company-organized media. These are promotional events organized by

stockiest. 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. Coca-Cola uses a

combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled

it’s spend on advertising on Doordarshan, which alone reached 41 per cent of rural

households. It has also used banners, posters and tapped all the local forms of entertainment.

Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price

point of Rs 5 per bottle in all media. LG Electronics uses vans and road shows to reach rural

customers. The company uses local language advertising. Philips India uses wall writing and

radio advertising to drive its growth in rural areas. The key dilemma for MNC’s ready

to tap the large and fast-growing rural market is whether they can do so without hurting the

company's profit margins. Evolving a New Marketing Mix for Selling to Rural

Indians The marketing mix in the case of Indian rural markets consists of 4P’s i.e. Product, Price, Promotion, Place combined with 1 P that is Packaging and one R i.e.

Retailer as special focus areas. However, at the base of this marketing mix will be 2 E’s of

Education and Empowerment. EMPOWEREMENTEDUCATIONCUSTOMIZATIONN The traditional marketing

hypothesis tends to ignore the requirement of a developing country’s rural needs. The concept

of marketing has to be taken in conjunction with economic, psychological and social

implications. Hence, the concept of Mega-Marketing where all such factors are taken into

consideration while developing the Marketing Mix is more relevant to succeed and build

enduring brands. In rural India’s case the two most important considerations are Education

and Empowerment opportunities which traditional approaches of marketing fail to

acknowledge. Then only the opportunity provided by the rural market can be fully tapped.

 12.2% of the world lives in Rural India. Put in a different context, this works out to 1 in

8 people on Earth. Being able to successfully tap this growing market is every marketer’s

dream. However, myths abound. India’s rural markets are often misunderstood. A clear

distinction needs to be made with regard to the reality versus the image of rural India. If such

a distinction is not made, we will be unable to distinguish between the serpent and the rope

and the rope and the serpent. The rural market is not homogeneous. Though the

aggregate size is very large, individual subsets of this market tend to be rather small and

disparate. Geographical, demographical, statistical, logistical differences are very apparent.

Positioning and realities regarding the potential of each of these market segments differ and

lie at the very core of forming the strategy for the rural markets. The face of Indian

agriculture is changing from dry land and irrigated agriculture into high-tech and low-tech

agriculture. Farmers in states like Maharashtra and Andhra Pradesh have reaped the benefits

of adopting new age farming practices, including green house cultivation, fert-irrigation and

hydroponics. This has radically changed the economics of farming, with the investment in

these systems lowering the cost of cultivation, increasing yields due to integrated crop

management practices and reducing the dependence on rainfall. As a result, disposable

income has grown sharply. The aspirants are becoming climbers showing a sustained

economic upturn as purchasing power is increasing in the rural markets. The proportion of

very rich has increased five- fold. The growing incomes have modified demand patterns and

buyer behaviour. Moreover, the need for a product or service is now adequately backed

up with the capacity, ability and willingness to pay. However, the market still remains

largely unexploited. At most times, potential markets need to be found and at times, even

created. Such creation of demand needs efficient management of the supply chain. To

increase market share, behavioural change needs to be at the forefront of any strategy.

Further, due to the diversity of this market, marketers need to think, plan and act

locally. It is therefore essential to develop an accurate Marketing Mix for selling to

rural Indians. Product “Authentic marketing is the art of identifying and

understanding customer needs and creating solutions that deliver satisfaction to the

customers, profits to the producers and benefits for the stakeholders.” ................... Philip

Kotler The product offerings have to be not only customized but also at a

different plane altogether in case of rural markets. The various product levels as outlined by

Philips Kotler, namely Core Benefit, Basic Product, Expected product, augmented product

and Potential Product should be adequately taken into consideration and the product offerings

should be henceforth customized according to the needs. The Rural market is not a

homogenous set of customers with preferences frozen in time. When developing products in

any category, marketers must identify the typical rural specific needs. Urban products cannot

be dumped onto rural markets without modifications. Tailor-made products are better

received by the rural audience as the consumers feel empowered and tend to dentify

with the offering. Most of the times in the urban market the product is offered at the

augmented product level where the objective of the product offering is to exceed the

customer expectation. But in the rural markets of India which have been till date

characterized by the absence of the choice, sub-standard products and cheap clones of their

urban counterparts; the immediate level to be operated is the Expected product where his

expectations are met. Also, due to the low level of incomes and literacy levels, it is

imperative that the basic needs of the consumer are met. For instance, shampoos or

soaps with distinctive, strong rose or jasmine perfumes are very popular with the rural

women in South India. The urban women do not identify as strongly with these perfumes.

Sachetization is also a distinctly rural-driven phenomenon. As demand in several categories

is being created, intensity of use is quite low. On average, rural folk would use a shampoo

only once a week. Habits take time to change and making unit sachet packs affordable is the

key to inducing trial and purchase. Systematic, in-depth research that can help

understand the depths of the mind of the villagers, their buying criteria, purchase patterns and

purchasing power are an essential input while developing rural specific products or

services. A common error has been to launch a completely stripped down version of the

urban product in the rural market, with the objective of offering the lowest possible price.

This is not what a rural consumer wants. What is required is to introduce a product with

‘essential’ features, whose needs are recognized and for which the consumer is willing to pay

(value-adding features). Product developers should aim at eliminating all the cost-adding

features, i.e., features which a consumer is unwilling to pay for as he sees no obvious utility.

This would “redefine value” in the minds of the consumer and tremendously increase product

acceptability. Product development is severely constrained by legislation in the case of

agricultural inputs like fertilizers, insecticides and pesticides. In the case of fertilizers for

instance, though levels of deficiency of nutrients have increased significantly over the past

decade, no significant changes in formulations notified under the Fertilizer Control Order

have taken place. This has severely restricted the availability of cost effective specialty

fertilizers of global standards to Indian farmers. Technological know-how for manufacture of

such fertilizers exists within the country. However, farmers using modern farming practices

are unable to get an assured supply of such farm inputs due to draconian legislation. A move

to liberalize the sector could perhaps consider the accepted worldwide norm of allowing

manufacturers with a strong R&D base to decide their own formulations with the government

machinery conducting checks on market samples of finished products to ensure that they live

up to the labelled specifications. This would be a major policy initiative that would

give a huge impetus to innovative product development in the farm sector. Product life

cycles as are becoming shorter and these are having their impact on company life cycles.

Thus for any company wishing to develop its product portfolio, allegiance to the classic

American P-A-L Principle of Partnership - Alliances - Linkages is a basis for survival. Pricing A significant portion of the rural population is paid in daily wages. Daily

wage earners tend to have little stock of money, and therefore tend to make purchases only to

meet their daily needs. The implication is that pack sizes and price points are critical to sales,

and importantly, that rural consumers view the purchase-tradeoff dilemma across a much

wider range of product categories. As a result, the nature of competition is much greater; a

beverage manufacturer is not only competing with other manufacturers in its category, but

also other products that consumers may consider one-off luxury purchases such as shampoo.

So marketer will have to examine method by which he can make the product more affordable.

In the case of consumer durable one way is to work through rural bank and offer higher

purchase terms to consumer. In short, the Value for money is the most important concept that

will differentiate the successful brand from the rest. BUDGET CONSCIOUS

CONSUMERSTATUS SEEKING CONSUMERS Every marketer must realize

that the rural consumer is not a miser. He is not simply looking for the cheapest product in

every category. He understands and demands value for money in every purchase that he

makes. Pricing therefore is a direct function of factors including cost-benefit advantage and

opportunity cost. Pricing offered to consumers should be for value offerings that are

affordable. Price sensitivity is extremely high and comparison with competitive prices is

common. Consumers seem to create narrow psychological price bands in their minds

for product groups and price elasticity beyond the extreme price points is very high. The

perceived utility or value of the product or service is the ultimate decision making

factor. It is certain however, that buying cheap is not the primary objective. Rather, it is

“buying smart”. A study revealed that the average rural consumer takes approximately 2

years to decide on buying a watch! He will not do so unless he is totally convinced that he is

getting value for Money. Impulse buys and purchases for conspicuous consumption are also

extremely few and far Between considering the “value for money” factor that reigns supreme

in most rural purchase decisions. It must be remembered that the rural consumer does

not have a budget problem. He has a cash flow problem. This is because the village folk

receive funds only twice a year. At these times, he is capable of making high volume

purchases. At all times, however, the unit price is critical and so is the pack size. Because of

this, in the lean season when there is a cash flow crunch, marketers need to provide financial

products, schemes or solutions that suit the needs of the rural population. Promotions &

Advertising There are a lot of barriers that militate against homogenous media and

message delivery. These barriers stem from the fact that rural markets vary immensely in

 terms of tastes, habits and preferences leading to different expectations of every

segment of the population. However, one fact is certain across all areas. The rural

consumer likes to touch and feel a product before making a choice. Demonstrations are

undoubtedly the most effective promotional tool that shapes purchase decisions of the rural

population. Demonstrations establish the credentials of any new technology used in

developing the product. In today’s information era, it is very important for companies to

wise-up on emerging technologies. It has in fact become a medium to attract larger audiences

for a product demonstration. Technology must be used to prepare a database of customers

and their requirements. The use of video using mobile vans and even large screen video walls

at events should be arranged. The classic conundrums of reach and coverage of the

media are shattered. Several creative communication media have been used by various

companies to tackle the problem of having to use visual communication and non-verbal

communication to reach the rural audience. This is required because a large proportion of the

rural population cannot read or write. Alliances with cottage industries, dharmsalas,

panchayats, post offices and police stations for advertising have also helped immensely. More

importantly, in rural India, experience has proved time and time again that word of mouth is

the key influencer. Intermediaries are the foundation to rural distribution. If the

intermediary understands and is constantly reminded about your product, then the end user

will not be allowed to forget. The companies must reinforce this highly effective medium and

use all their innovation and money tom develop more dramatic point of sale and point of

contact material. This becomes all the more important when in rural India, more often than

not, the overlap between the product categories sold in a single outlet in tremendous. For

instance, a store may call itself as a grocery store but will stock everything from groceries to

vegetables to fertilizers and may at times even stock medicines. In such cases, the point at

which the customer actually comes in contact with a product may not be the point at which

the sale is affected. The re-use capacity and colour of the container in which the product

is packed is also a crucial factor. In fact, reusable packaging is considered a major aid in

promoting sales for products in the rural market. Consumer and Trade schemes that

Incentivise Spending using discount coupons, off season discounts, free samples, etc.

encourage spending. Lucky draws and gift schemes are a major hit in most states. The

use of local idioms and colloquial expressions are an excellent way to strike a rapport with

the rural consumer and must be borne in mind when developing media plans and public

relations programmes. No high voltage publicity is required. The rural consumer is very

down to earth but equally discerning and marketers need to step into the shoes of the

rural folk while creating product promotion campaigns. Another unique feature of rural

markets is that the Decision making process is collective. The persons involved in the

purchase process - influencer, decider, buyer, one who pays can all be different. So marketers

must address brand messages in their campaigns at several levels. Apart from regular

household goods, several agribusiness companies have also started providing gift schemes

with offers for free jewellery that influences the ladies to pressure the farmers to purchase

agricultural inputs from select companies. This promotion strategy thus makes women

influence purchase decisions that they would ordinarily not be involved in. Youth

power is becoming increasingly evident in villages. Rural youth bring brand knowledge to the

households. This has forced several companies to change the focus and positioning of their

products and services towards this segment that is growing in absolute number and relative

influence. There are other attributes in the promotion strategy which are explained as

under: 1. Mass media: In the present world mass media is a powerful medium of

communication. The following are the mass media generally used: Television. Cinema. Radio Print media: Handbills and Booklets, posters, stickers, banners,

etc. 2. Personal selling and opinion leaders: In personal selling it is required that the

potential users are identified and awareness is created among them about the product, its

features, uses and benefits. This can be achieved only by personal selling by highly motivated

sales person. In fact the word of mouth information holds lot validity in rural areas even

today. This is the reason why opinion leaders and word of mouth are thriving among rural

consumers. An opinion leader in rural areas can be defined as a person who is considered to

be knowledgeable and is consulted by others and his advice is normally followed. The

opinion leaders may be big landlords or politicians or progressive farmers. 3. Special

campaigns: During crop harvest and marketing seasons it is beneficial to take up special

promotion campaigns in rural areas. Tractor owners (tonee) conducted by MRF Limited is

one such example. Brooks Bond carries out marches in rural areas with band, music and

caparisoned elephants to promote their brand of tea. Mandi and Mela magic At

last count, India witnessed over 50,000 melas. Of these 25,000 meals are held to signify

religious, cultural festivals as well as local fairs and events. On an average, visitors at these

melas spend between Rs. 5,000 to Rs. 50,000 a day. For example, 3 lakh people visited

the annual mela at Navchadi which lasts for 7 days in Meerut. The largest such mela is the

Maha Kumbh Mela which is visited by an average of 12 crore people. There is

however, a caveat when an organization is considering using mela for marketing their

products. Is the audience at this mela fit for promotion of the product at hand? What are the

psychographics of this audience? What is the motivational and behavioural impetus that

brings visitors to each of these melas. On considering these questions, it has been observed

that melas are fit to generate product exposure, package familiarity, brand reminder and word

of mouth. However, for products that need concept marketing and those that have high prices,

such melas are not suitable promotion media. This is because the time and the mood of the

people that visit these melas are not right to digest technical information or for making large

purchases. People come to melas to have a good time and are not reminded of such high

technology or high priced products when they return home. In the words of Mr. Neville

Gomes, Managing Director of Multimedia Aquarius, promotion at melas is like a “one night

stand”. There will be no reminder later. Thus, a large amount of qualitative judgment is

indeed in planning promotions at melas by media planners. Place place is the

major reason behind the evolution of rural marketing as a distinct discipline. A village as a

place for promotion, distribution & consumption is very different from a town or city,

thus the general marketing theories can’t be applied directly in rural markets. Reaching the

right place is the toughest part in today’s rural marketing, as most of the products reach up to

the nearest townships of any village, but due to higher distribution costs, these products fails

to reach the village as the distribution channel fails to put in the required efforts. Most of the

times, the rural retailers themselves go to the urban areas to procure these goods. Rural

markets imply complex logistical challenges that show up as high distribution costs. Significance of Distribution No matter how well devised a company’s product,

pricing or promotion strategy, the most crucial link in ensuring the success of rural marketing

efforts is distribution. Distribution must be strengthened and this would raise investment cost

barriers for new entrants. In Rural India, the selection and use of distribution channels is a

nightmare. The reason for this is very clear when we consider that on an average, Urban and

Rural India both have approximately 3 million retail outlets. However, Urban India has only

4,000 towns where these outlets are located. On the other hand, Rural India’s 3 million

outlets are located in 6.3 lakh villages. Thus, marketers are faced with the problem of feeding

3 million shops located in vastly diverse areas each of which records an average sale of only

Rs.5,000 per outlet. Further compounding this problem is the fact that even this meagre

sale is mostly on credit. The diversity in the distribution of shops is the self-limiting factor in

terms of servicing the rural distribution network. The distribution of outlets however

shows that a marketer need not be present in all markets at all times. Being present in 6 lakh

villages is virtually impossible for an organization of any size. Rural wealth and demand is

concentrated typically at satellite towns, district headquarters, assembly markets and such

central locations. Rural distribution has a rigid hierarchy of markets that make channel

decisions relatively structured. It is essential for rural marketing companies to

understand this hierarchy. Rural folk are habituated to travelling once a week for their weekly

purchases to a satellite town. They do not expect such items to be present in every village.

For durables where the outlay involved is typically large, the purchase would be made in an

assembly market for reasons of choice and availability of adequate cash flow. This is due to

the fact that it is at assembly markets that auction yards are present where the farmers

congregate to sell their output. After such sale of produce, they are cash rich and can afford to

make such purchases. It is therefore not necessary for a marketer of TV sets to take their

distribution channel all the way down to the village shop. A TV will not be sold there as the

cash flow does not exist at that point in the hierarchy of markets. A television

distributor must be present at assembly markets which are much smaller in number, more

controllable, easier to reach and service. Keeping the hierarchy in mind will help decide the

optimum level of penetration required to reach a critical mass of rural consumers. Haats Haats are the nerve centre of Rural India. They are a readymade distribution

network embedded in the fabric of rural society for over 1000 years. They have been held on

a regular basis across the length and breadth of the country for over 1000 years. Right from

the time of Chandragupta Maurya, Haats are seen as a place for social, cultural and economic

interchange. One in every five villages with a population of over 2000 has a haat. In

villages with less than 2000 people this figure reduces to 1 in 20 villages. Typically, an

average haat will have close to 300 stalls. A haat usually serves around 5000 visitors.

Considering that the average population of an Indian village is approximately 1000, each haat

serves 5 villages. A study estimates that 47,000 haats are conducted in rural India. These rural

super markets are much larger than all the world's K-marts and Wal-marts put together. A lot

of re-distribution also occurs through haats. This is because, a large number of retailers and

sub-wholesalers buy from haats for their village stores. What is most attractive to marketers

is that 90% + of sales in haats are on cash basis. Traditionally, in village shops a lot of

credit sales occur due to the fact that in a small geographic area of a village, everybody

knows everybody. Considering that over 5000 visit a haat from 5 villages, the system gets

derelationalised. Apart from the 90% cash sale, 5 to 7% is conducted on barter system and the

rest 3 to 5% is on credit. Also attractive to companies wishing to use the system is the low

selling overheads. Participation fees at haats are a flat Re.1 to Rs.5 per stall and this rate is

common to a giant like Hindustan Lever and the smallest local seller. Distribution costs

must be reduced through optimum utilization of the network. Thus, incorporating haats in the

distribution strategy of a rural marketing organization selling consumer goods and FMCG

products (typically once a week purchase items) is a tremendous opportunity. Perhaps

the other most important factor to consider while developing rural distribution strategy is that

the move from transactional marketing to relationship marketing is most evident in the

village market. A strong bond needs to be created with every consumer even in the remotest

village and the smallest town. Marketing in Rural India is undoubtedly a long-haul exercise

and one that involves great expense. Only those with a strong mind, a tough heart and stiff

hands survive. There is also a need to realise that the dealer is the company's "unpaid"

sales force. It is essential to educate and involve him as he is the local company

representative and is the only member in the channel of distribution that is in direct

contact with the final consumer. The dealers' feedback needs to be obtained as the direction

for future strategy emanates here. MARKETING STRATEGIES TO CAPTURE

RURAL INDIA SEGMENTATION OF RURAL MARKET The first step

is to develop & implement any strategy for the rural market should include the appropriate

segmentation of the rural market. The important thing is that appropriate segmentation basis

need to be applied. Different product categories have different rural markets to cater to &

these can be selected by applying different criteria of segmentation. The organization can do

the following thing to start with: Focus on select markets. Focus on select

villages. BY COMMUNICATING AND CHANGING QUALITY PERCEPTION

 Companies are coming up with new technology and they are properly communicating

it to the customer. There is a trade of between Quality a customer perceives and a company

wants to communicate. Thus, this positioning of technology is very crucial. The perception of

the Indian about the desired product is changing. Now they know the difference between the

products and the utilities derived out of it. As a rural Indian customer always wanted value

for money with the changed perception, one can notice difference in current market

scenario. BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local language for

promoting their products. They have started selling the concept of quality with proper

communication. Their main focus is to change the Indian customer outlook about quality.

With their promotion, rural customer started asking for value for money. BY TARGET

CHANGING PERCEPTION If one go to villages they will see that villagers using

Toothpaste, even when they can use Neem or Babool sticks or Gudakhu, villagers are using

soaps like Nima rose, Breeze, Cinthol etc. even when they can use locally manufactured very

low priced soaps. Villagers are constantly looking forward for new branded products. What

can one infer from these incidents, is the paradigm changing and customer no longer price

sensitive? Indian customer was never price sensitive, but they want value for money. They

are ready to pay premium for the product if the product is offering some extra utility for the

premium. BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hold on the

people. Cultural values play major role in deciding what to buy. Moreover, rural people are

emotional and sensitive. Thus, to promote their brands, they are exploiting social and cultural

values. BY PROVIDING WHAT CUSTOMER WANT The customers want

value for money. They do not see any value in frills associated with the products. They aim

for the basic functionality. However, if the seller provides frills free of cost they are happy

with that. They are happy with such a high technology that can fulfil their need. As

"Motorola" has launched, seven models of Cellular Phones of high technology but none took

off. On the other hand, "Nokia" has launched a simple product, which has captured the

market. BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS

 Companies are picking up Indian models, actors for advertisements as this helps them

to show themselves as an Indian company. Diana Hyden and Shahrukh Khan are chosen as a

brand ambassador for MNC quartz clock maker "OMEGA" even though when they have

models like Cindy Crawford. BY ASSOCIATING THEMSELVES WITH INDIA

 MNCs are associating themselves with India by talking about India, by explicitly

saying that they are Indian. M-TV during Independence Day and Republic daytime make

their logo with Indian tri-colour. Nokia has designed a new cellular phone 5110, with the

India tri-colour and a ringing tone of "Sare Jahan se achcha". BY PROMOTING

INDIAN SPORTS TEAM Companies are promoting Indian sports teams so that they

can associate themselves with India. With this, they influence Indian mindset. LG has

launched a campaign "LG ki Dua, all the best". ITC is promoting Indian cricket team for

years; during world cup they have launched a campaign "Jeeta hai jitega apna Hindustan

India India India". Similarly, Whirlpool has also launched a campaign during world cup.

 BY TALKING ABOUT A NORMAL INDIAN Companies are now talking

about normal India. It is a normal tendency of an Indian to try to associate him/her with the

product. If he/she can visualize himself/herself with the product, he /she become loyal to it.

That is why companies like Daewoo based their advertisements on a normal Indian family.

 BY DEVELOPING RURAL-SPECIFIC PRODUCTS Many companies are

developing rural-specific products. Keeping into consideration the requirements, a firm

develops these products. Electrolux is working on a made-for India fridge designed to serve

basic purposes: chill drinking water, keep cooked food fresh, and to withstand long power

cuts. BY GIVING INDIAN WORDS FOR BRANDS Companies use Indian

words for brands. Like LG has used India brand name "Sampoorna" for its newly launched

TV. The word is a part of the Bengali, Hindi, Marathi and Tamil tongue. In the past one year,

LG has sold one lakh 20-inch Sampoorna TVs, all in towns with a population of around

10,000. BY ACQUIRING INDIAN BRANDS As Indian brands are operating in

India for a long time and they enjoy a good reputation in India. MNCs have found that it is

much easier for them to operate in India if they acquire an Established Indian Brand.

Electrolux has acquired two Indian brands Kelvinator and Allwyn this has gave them the

well-established distribution channel. As well as trust of people, as people believe these

brands. Similarly Coke has acquired Thumps up, Gold Spot, Citra and Limca so that they can

kill these brands, but later on they realized that to survive in the market and to compete with

their competitor they have to rejuvenate these brands. BY EFFECTIVE MEDIA

COMMUNICATION Media Rural marketing is being used by companies. They can

either go for the traditional media or the modern media. The traditional media include melas,

puppetry, folk theatre etc. while the modern media includes TV, radio, and e-chaupal. LIC

uses puppets to educate rural masses about its insurance policies. Govt of India uses puppetry

in its campaigns to press ahead social issues. Brook Bond Lipton India ltd used

magicians electively for launch of Kadak Chap Tea in Etawah district. In between such a

show, the lights are switched of and a torch is flashed in the dark (EVEREADYs tact). BY ADOPTING LOCALISED WAY OF DISTRIBUTING Proper distribution

channels are recognized by companies. The distribution channel could be big scale Super

markets; they thought that a similar system can be grown in India. However, they were

wrong; soon they realized that to succeed in India they have to reach the nook and the corner

of the country. They have to reach the "local Paan wala, Local Baniya" only they can

succeed. MNC shoe giants, Adidas, Reebok, and Nike started with exclusive stores but soon

they realized that they do not enjoy much Brand Equity in India, and to capture the market

share in India they have to go the local market shoe sellers. They have to reach to local cities

with low priced products. BY ASSOCIATING THEMSELVES WITH INDIAN

CELEBRITIES MNCs have realized that in India celebrities enjoyed a great popularity

so they now associate themselves with Indian celebrities. Recently Luxor Writing

Instruments Ltd. a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of Parker

Sonnet Hussain special edition fountain pens, priced at Rs. 5000. This pen is signed by Mr.

Makbul Fida Hussain a renowned painter who has created "Gajgamini" range of paintings.

Companies are promoting players like Bhaichung Bhutia, who is promoted by Reebok,

so that they can associate their name with players like him and get popularity. MELAS

 Melas are places where villagers gather once in a while for shopping. Companies take

advantage of such events to market their products. Dabur uses these events to sell products

like JANAM GHUTI (Gripe water). NCAER estimates that around half of items sold in these

melas are FMCG products and consumer durables. Escorts also display its products like

tractors and motorcycles in such melas. PAINTINGS A picture is worth

thousand words. The message is simple and clean. Rural people like the sight of bright colors.

COKE, PEPSI and TATA traders advertise their products through paintings. Product

Strategies The specific strategies, which can be employed to develop or modify the

products to targets the rural market, can be classified as follows: 1. Small unit packing:

Given the low per capita income & purchasing habits of the rural consumers, small unit

packages stand a good chance of acceptance in rural market. Single serve packets or sachets

are enormously popular in India. They allow consumers to buy only what they need,

experiment with new products, & conserve cash at the same time. This method has been

tested by products life shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth

paste, etc. Small packing stands a good chance of acceptance in rural markets. The advantage

is that the price is low and the rural consumer can easily afford it. Also the Red Label Rs.

3.00 pack has more sales as compared to the large pack. This is because it is very affordable

for the lower income group with the deepest market reach making easy access to the end user

satisfying him. The small unit packing will definitely attract a large number of rural

consumers. 2. New product designs: Keeping in view the rural life style the

manufacturer and the marketing men can think in terms of new product designs. The rural

product usage environment is tough because of rough handling, rough roads & frequent

power fluctuations. Thus, all these environmental factors must be considered while

developing the products meant for rural audience. Nokia’s 1100 model is a very good

example of a customized model for rural markets. Its design has been modified to protect it

against rough usage in rural environment; it is dust resistant & has a small torch light in view

of the frequent power cuts in rural India. It is also introduces messaging in Hindi language

now, in some of the economically priced models in order to cater to the semi-urban or rural

consumers. This is in real terms, thinking global & acting local. 3. Sturdy products:

Sturdiness of a product is an important factor for rural consumers. The product should be

sturdy enough to stand rough handling, transportation & storage. The experience of torch

light dry battery cell manufacturers supports this because the rural consumers preferred dry

battery cells which are heavier than the lighter ones. For them, heavier weight meant that it

has more over and durability. Sturdiness of a product either or appearance is an important for

the rural consumers. 4. Utility oriented products: The rural consumers are more

concerned with utility of the product and its appearance Philips India Ltd. Developed and

introduced a low cost medium wave receiver named BAHADUR during the early seventies.

Initially the sales were good but declined subsequently. On investigation it was found that the

rural consumer bought radios not only for information and news but also for entertainment.

 5. Brand name: For identification, the rural consumers do give their own brand name

on the name of an item. The fertilizers companies normally use a logo on the fertilizer bags

though fertilizers have to be sold only on generic names. A brand name or a logo is very

important for a rural consumer for it can be easily remembered. Many a time’s rural

consumers ask for peeli tikki in case of conventional and detergent washing soap. Nirma made a peeli tikki especially for those peeli tikki users who might have experienced

better cleanliness with the yellow colored bar as compared to the blue one although the actual

difference is only of the color. e.g.: Coca-Cola targeted the whole Indian rural market with

the positioning of “Thanda Matlab Coca-Cola” advertisements because most of the villagers

say when wanting a drink refer to it as Thanda…… so Coca-cola used that word. Pricing strategies 1. Low cost/ cheap products: This follows from the product

strategy. The price can be kept low by low unit packaging’s like paisa pack of tea, shampoo

sachets, vicks 5 grams tin, etc. this is a common strategy widely adopted by many

manufacturing and marketing concerns. 2. Refill packs / Reusable packaging: In urban

areas most of the health drinks are available. The containers can be put to multipurpose uses.

Such measures can a significant impact in the rural market. For example, the rural

people can efficiently reuse the plastic bottle of hair oil. Similarly the packages of edible oil,

tea, coffee, ghee etc can be reused. Pet jars free with the Hasmukhrai and Co Tea, Ariel Super

Compact. 3. Application of value engineering: in food industry, Soya protein is being

used instead of milk protein. Milk protein is expensive while Soya protein is cheaper, but the

nutrition content of both is the same. The basic aim is to reduce the value of the product, so

that a larger segment can afford it, thus, expanding the market. 4. Large volume-low

margins (Rapid or slow penetration strategy): Marketers have to focus on generating large

volumes & not big profit margins on individual products. If they price their product at a

level which can lead to good volumes, then they can still generate good returns on the capital

employed. 5. Overall efficiency & passing on benefits to consumers: For rural products,

the strategy should be to cut down the production, distribution & advertising costs & passing

on these benefits to the customers to further increase the turnover. Most often, it has been

observed that advertising has less to do with product sales in the rural areas. If an

organization gets the price point right, then it can work in rural market. 6. Low volume-

low price strategy: This strategy of reducing prices by reducing the package size in order to

make it appear more affordable, is delivering very good results for a large number of FMCG

product categories, in the rural markets of India. In categories where maintaining the price

point is extremely critical, this strategy is delivering very good results. 7. Ensuring price

compliance: Rural retailers, most of the times, charges more than the MRP. The manufacture

has to ensure price compliance either through promotional campaigns, as was done by Coca

Cola, or by ensuring the availability of products at the retail outlets directly. Promotion

strategies Customized promotional media & messages need to be developed by the

organizations to effectively target the rural market. The following strategies can be

considered while developing promotional campaigns for the rural markets: Think

Global Act Local Rural population is diverse, but the commonalities of their ethos &

simple living habits need to be understood for advertising to succeed. For that, the theme of

the advertisement needs to revolve among universal themes, such as family-love. But the

context, storyline, language & idioms should be such that the rural audience of different rural

market segments can relate to. Think in Local Idiom This is the need of the

advertising professionals who can think like the rural people. The only we can have insights

like ‘Thanda matlab Coca Cola’. There should be the use of language writers who

understands the rural & regional pulse better. Simplicity & Clarity All

promotional messages targeted at rural audience need to be simple & clear, which can be

easily understood, & they should not include any confusing elements. It is preferable that it

has only a few propositions at a time. Bombarding rural consumers with too much, in

less time can easily confuse them & leave them bewildered. Promotional message should

highlight only the functional values of the product & explains how those values can make the

consumer’s life even better & solve any of his problems. Narrative Story Style The promotional message can be delivered in the form of an entertaining story with a

message depicting how the brand delivers “larger good” to the family & society. The theme

of the story line can be about how the product can solve the problems of the rural consumers.

 Choice of Brand Ambassador Brand Ambassador for the rural markets need to be

picked carefully as urban successes might not get replicated in the rural markets. That is why

Govinda in the Mirinda as boosted the sales of the drink in the rural markets. An organization

might spend a lot of money in hiring a brand ambassador only to find out later that it had

little impact on the rural consumer. Distribution Strategy Many companies view

the rural markets as great opportunity for expanding their sales but find distribution as a

major problem. Unfortunately, it is almost impossible to transplant strategies which work

successfully in urban markets onto rural markets, namely, extensive retailing and sustained

pull generation through mass media advertising. The road blocks to reach the rural

customers are: Lack of adequate transport facilities. Large distances between

villages. Lack of pucca roads connecting villages to nearest townships. Lack of

proper retail outlets Lack of mass media infrastructure. The marketers were of the

opinion that the villagers would come to nearby towns and buy the products that they want.

What has been found is that if we have to serve the rural consumer we will have to take our

products to him through the channels that he is using and some innovative ways of getting to

him. The following distribution strategies formulated for the rural category. 1. Coverage of villages with 2000 and above population: Ideally, coverage of villages with

up to 2000 and above population could be the break-even point for a distribution setup. By

doing so the percentage of villages covered comes to only 10% of all the villages, but the

rural population covered will be substantial, to the extent of about 40 to 45 percent. With a

distribution network in about 55,000 villages, which have a population of 2000 persons &

above each, one can cover about 25 crores rural consumers. This strategy is good to begin

with & then subsequently, villages with lesser populations can be added. 2.

Segmentation: the number of villages in India is huge & it is not viable to contact & serve all

villages directly. Therefore, companies or distributors can carefully examine the market

potential of different villages & target the villages that can be served in a financially viable

manner through an organized distribution effort. 3. Use of co-operative societies: There

are over 3 lacks co-operative societies operating in rural areas for different purposes like

marketing cooperatives, farmer’s service cooperatives and other multipurpose cooperatives.

These cooperatives have an arrangement for centralized procurement and distribution through

their respective state level federation. Such state level federation can be motivated to procure

and distribute consumables items and low value durable items to the members to the

society for serving to the rural consumers. Many of the societies extend credit to the members

for purchases. 4. Utilization of public distributory system: The PDS in the country is

fairly well organized. The revamped PDS places more emphasis on reaching remote rural

areas like the hills and tribal’s. The purpose of PDS is to make available essential

commodities like food grains, sugar, kerosene, edible oils and others to the consumers at a

reasonable price. The shops that distribute these commodities are called fair price shops.

These shops are run by the state civil Supplies Corporation, co-operatives as well as private

entrepreneurs. Here again there is an arrangement for centralized procurement and

distribution. The manufacturing and marketing men should explore effective utilization of

PDS. 5. Utilization of multipurpose distribution centers by petroleum/oil companies:

In order to cater to the rural areas the petroleum/oil companies have evolved a concept of

multipurpose distribution centers in rural areas. In addition to petrol/diesel, lubricants, these

outlets also stock consumables agricultural inputs like fertilizers, pesticides and seeds. It is

estimated that there are about 450 such outlets in operation in the country. The rural

consumer who has tractors, oil-engine pump sets and mopeds frequent these outlets for their

requirement. These outlets can be profitably utilized for selling consumables and durable

items also. 6. Distribution up to feeder markets/mandi towns: Keeping in view the

hierarchy of markets for the rural consumers, the feeder markets and mandi towns offer

excellent scope for distribution. The rural customers visit these towns at regular intervals not

only for selling the agricultural produce but also for purchasing cloth, jewelry, hardware,

radios, torch cells and other durables and consumer products. From the feeder markets and

mandi towns the stockiest or wholesaler can arrange for distribution to the village shops in

the interior places. This distribution can be done by mopeds, cycles, bullock-carts,

camelbacks etc. depending upon the township. 7. Shandies/Haaths/Jathras/Melas:

These are places where the rural consumers congregate as a rule. While shandies/heaths are

held a particular day every week, Jathras and melas are held once or twice a year for longer

durations. They are normally timed with religious festivals. Such places attract large number

of itinerant merchants. Only temporary shops come up selling goods of all kinds. It can be

beneficial for companies to organize sales of their product at such places. Promotion can be

taken, as there will be ready captive audience. For convincing the manufacturing and

marketing man with regard to the importance of these places from rural marketing point of

view a visit to such places is necessary. It is estimated that over 5,000 fairs are held in the

country and the estimated attendance is about 100 million rural consumers. Biggest fair

‘Pushkar Mela’ is estimated to attract over 10 million people. There are 50 such big rural

fairs held in various parts of country, which attract urbanite also like ‘Mankanavillaku’ in

Malappara in Kerela, Kumbh Mela at Hardwar in U.P. ‘Periya Kirthigai’ at

Tiruparunkunaram in Tamil Nadu. Merits: Convenience: The entire market can

be related to large departmental stores in cities, where the advantage is a one-stop shopping

exercise. These outlets crop up every week, providing consumers immense choice and

prices. Attractive: The weekend shopping is not only convenient but also entertaining.

The markets start early and will be over by lunch. Afterwards, there will be entertainment. In

respect of transactions, it is an attractive place to those who want to buy second hand

durables and to those who prefer barter transactions. Further the freshness of the produce,

buying in bulk for, a week and the bargaining advantage attract the frugal and weeklong hard

working rural folk. Availability: It is a market for everyone and for everything.

Household goods, clothes, durables, jewellery, cattle, machinery, farming equipment, raw

materials and a host of products are available. 8. Agricultural Input Dealers: Fertilizers

should be made available to the farmers within the range of 4-5 km from their residence, as

per the essential commodities act. This is why there are about 2 lakh fertilizer dealers in the

country, both in cooperative & private sector. Example of Varana Nagar in Maharashtra proved an eye opener in this regard where the sugar and milk co-operatives

have totally changed the life style of people. The supermarket in Varana Nagar caters

exclusively to rural consumers. Similarly a co-operative supermarket called ‘Chintamani’ in

Coimbatore (T.N) arranges free transit of rural consumers to the supermarket of their

purchases. 9. Joint distribution by Non-competing Companies: As the cost of

distributing the products in the rural market through distribution vans can be unviable for a

single company, different non-competing companies can come together to jointly operate

distribution vans for the rural market. This will enable them to share the cost of operating the

van & on account of the sharing of the cost by four or five companies; the entire operation

can become financially viable for all the players. 10. Personal Selling Network: It is

very successful distribution channel being developed by companies like HUL. It adds a

personal touch to the marketing, as the salesmen are the resident of the village or community

itself, making it easier to sell the product & maximise sales for the company. THE

OLD SETUP The historically available people & places for distribution include: -

Whole seller, Retailer, Vans, Weekly Haats, and Bazaars & Shadies. Wholesalers The Indian wholesaler is principally a Galla – Kirana (food-grain) merchant who sustains

the belief that business is speculative rather than distributive in character. He is a

trader / commodity merchant rather than a distributor and therefore tends to support a brand

during boom and withdraw support during slump. The reason for this speculative

character and dormant role of wholesalers are:- Indian market was largely sellers

market. There was no need for active sales growth. Companies laid more emphasis or

retailers in urban areas, who are very large in number. As a result of retail based distribution

was weakened. Rural markets were neglected by many. The occurrence of retail outlets

was low. Therefore many companies were dependent on whole salers. The current need

is to activate and develop wholesaler of the adjoining market as a distributor of products to

rural retail outlets and build his loyalties to the company. Retailers There are

different kinds of retailers. Shops within the villageShops located on the main road and

not exactly within the villageKasba market or the tahsil market.Village retailers have

traditionally been among the most mobile of rural residents. CREDIBILITY: - He

enjoys the confidence of the villagers. His views are accepted and followed by the rural

people whose awareness and media exposure levels are low. (- The urban retailer is not

trusted. He is seen as a businessman with profit motto. His view points are

evaluated with other sources of information.) INFLUENCE LEADER: - His role

as influence leader is indisputable. From tender twig of neem to washing powder retailer

testimony has been vital part of the product adoption process. The role of urban retailer

is weak. The urban consumers have numerous sources of information. Although

retailer’s opinion is sought it may not be 100% believed and followed. BRAND

PROMOTER: - In rural market retailers remains the deciding factor to sell particular

brand. Retailers helps in identification and selection of brands, there is less influence of

shelf displays and point of purchase promotion. Presence of spurious brands is an ample

testimony to this view. (- The urban retailer has a limited role as a brand

promoter. - He cannot directly, recommend the brands. - He is to intelligently

drive home his recommendations, as urban consumers do not trust him completely. It is through shelf displays and incentive offers that he has to push the brands.) RELATIONSHIP MARKETER Village retailer practices relationship

marketing. He caters to a set of buyers who have income from immovable land

resources and would be static over a much longer time span. The relationship could

extend beyond three generations, backed by historical credibility of the retailer as a product

referral. (-on the contrary, the urban retailers have to make an effort to adopt

relationship marketing. His customers base comprises largely the mobile service class

prone to shift residence at least once, if not more, in less than a decade. This limits the time

span and perspective of the retailer – customer relationship.) HARBINGER OF

CHANGE In an environment relatively isolated from external developments, he has

been harbinger of change. He is one of the main sources of information and opinion as

well as supplier of product and services. (As against this, we find urban retailer,

wielding limited influence in changing the product choices and quality of life of

consumers.) Vans Mobile vans long since, have an important place in distribution

and promotion of the products in villages. Weekly Haats, Bazaars, Shandies The

haats are the oldest outlets to purchase household goods and for trade. These markets are very

well organized with shopkeepers having pre-assigned spaces for them to sell their wares. A

typical market is in an open field with ample space for displaying all sorts of goods. Its

location changes every week. These markets have different names in different regions. But

they are strikingly similar in what they sell. It is reported that there are, in all, about

47,000 haats held throughout the country. Media Vehicles Through the rural

markets offer big attractions to the marketers, one of the most important questions frequently

asked is “How do we reach the large rural population through different media and methods?

 Mass MediaLocal MediaPersonalized MediaRadioHaats, Melas, FairsDirect

CommunicationCinemaWall PaintingsDealersPressHoardingsSales PersonsTVLeafletsVideo

VansFolk MediaAnimal ParadeTransit MediaResearchers Formal media It

includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor

advertisement. Reach of formal media is low in rural households (Print: 18%, TV: 27%,

Cinema: 30%, and Radio: 37%) and therefore the marketer has to consider the following

points: Newspapers and magazines: English newspapers and magazines have

negligible circulation in rural areas. However local language newspapers and magazines are

becoming popular among educated facilities in rural areas. Examples: Newspapers: Eenadu in

A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North, Loksatta in Maharashtra and

Tamil magazine Kumudam are very popular in rural areas. Television: It has

made a great impact and large audience has been exposed to this medium. HLL has been

using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the

products advertised via television. Regional TV channels have become very popular

especially in Southern states. Examples: SUN TV is very popular even in rural areas in Tamil

Nadu and Asianet is a preferred regional channel in Kerala. Many consumer goods

companies and fertilizer companies are using these TV channels to reach the rural

customer. Radio: Radio reaches large population in rural areas at a relatively low

cost. Example: Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies

using radio communication programme. There are specific programmes for farmers like Farm

and Home/Krishi Darshan in regional languages. The farmers have a habit of listening to

regional news/agricultural news in the morning and the late evening. The advertisement has

to be released during this time to get maximum coverage in rural areas. Another advantage is

that the radio commercial can be prepared at short notice to meet the changing needs of the

rural folk. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in

crops. Cinema: About 65% of the earnings from cinema are from rural markets.

Film viewing habits is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh.

Village theatres do roaring business during festivals by having four shows per day. The

monthly charge for showing an ad film is within Rs.500. Local distributor or dealer who has

good contacts with cinema houses in villages can easily monitor this activity. Examples:

Films on products like Vicks, Lifebuoy and SPIC fertilizers are shown in rural cinema halls.

Apart from films, Ad slides can also be screened in village theatres. Outdoor

advertisements: This form of media, which includes signboards, wall painting,

hoarding, tree boards, bus boards, dealer boards, product display boards etc, is cost effective

in rural areas. Symbols, pictures and colours should be used in POPs meant for rural markets

so that they can easily identify the products. Generally rural people prefer bright colours and

the marketer should Utilize such cues. Point of purchase: Display of hangings,

festoons and product packs in the shops will catch the attention of prospective buyers.

However a clutter of such POP materials of competing companies will not have the desired

effect and is to be avoided. Direct mail advertising: It is a way of passing on

information relating to goods or services for sale, directly to potential customers through the

medium of post. It is a medium employed by the advertiser to bring in a personal touch. In

cities lot of junk mail is received by all of us and very often such mails are thrown into the

dustbin whereas a villager get very few letters and he is receptive to such mailers. Wall

paintings: It is an effective and economical medium for communication in rural areas,

since it stays there for a long time depending upon the weather conditions. The cost of

painting one square foot area is just Rs.10. Retailers welcome painting of their shops so

that the shop will look better. Walls of farm houses, shops and schools are ideal places for

painting and the company need not have to pay any rent for the same. The walls have to be

painted at least one or two feet from ground level. It is better to take permission of the owner.

Very often the owner takes responsibility for taking care of the wall painting. Painting to be

avoided during election time and rainy season. The matter should be in the form of pictures,

slogans for catching the attention of people. Companies marketing TV, fans, branded

coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in

rural areas. Tree boards: These are painted boards of about two square feet in

dimension having the picture or name or slogan of the product painted on it. The cost of such

a painted board is about Rs.80. These boards are fixed to the trees on both sides of the village

road at a height of about 10 feet from ground level. These boards attract the attention of slow

moving vehicles like cycles, bullock carts and tractors and people walking on the road.

Considering the poor condition of roads, even the buses move at slow speed through

village road. Fertilizer and pesticide companies in rural areas extensively use tree boards.

These are low priced promotion items and can be used by consumer goods companies too. Informal/Rural specific media These media with effective reach and personalized

communication will help in realizing the promotional objectives. Companies to suit the

specific requirements of rural communication are using a variety of such media effectively

and some of the more important media and methods are given below. Farm-to-Farm/House-to-House visit: Rural people prefer face-to-face communication

and farm visits facilitate two-way communication. The advantage is that the sales person can

understand the needs and wants of the rural customer by directly discussing with him and

answer his queries on products and services. Potential customers in the village are identified

and the company’s/distributor’s representative makes farm-to-farm visits and highlight the

benefits of the products. The person carries with him literature in local language and also

samples of products. The person does not sell the product but only promotes the use of the

product. Very often the local dealer also joins the representative in making farm-to-farm

visits. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders. Example: This approach has been found to be very

effective for agricultural machinery, animal health products and agricultural inputs. Many

LIC agents and companies dealing with high value consumer durables have tried this method

with success in rich rural areas. Group meeting: Group meetings of rural

customers as well as prospects are an important part of interpersonal media. The company is

able to pass on the message regarding benefits of the products to a large number of customers

through such meetings. Group meeting of key customers are conducted by banks, agricultural

inputs and machinery companies in rural areas. The bankers visit an identified village, get the

village people in a common place and explain the various schemes to the villagers. Such

meetings could be organized in prosperous villages for promoting consumer durables and two

wheelers also. Example: MRF Tyres conduct tractor owners meet in villages to discuss

repairs and maintenance of tractors. Opinion leaders: Villagers place more

emphasis on the experience of others who have used a product/brand to make purchase

decision. Opinion leader is a person who is considered to be knowledgeable and is consulted

by others and his advice is normally followed. Such opinion leaders could be big landlords,

bank official, panchayath-president, teachers, extension workers etc. Examples: a) Mahindra

Tractors use bankers as opinion leaders for their product. b) Asian Paints promoted its

Utsav brand of paint by painting the village Sarpanch’s house a few months prior to the

launch if the branch to demonstrate that the paint does not peel off. The Melas: Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs and may be

held only for a day or may extend over a week. Many companies have come out with creative

ideas for participating in such melas. Examples: a) Britannia promotes Tiger Brand Biscuits

through melas. b) The mahakumbh at Allahabad is the biggest mela in India. HLL has put up

14 stalls in the mela grounds for promoting Lifebuoy. Handcarts have been deployed for

increasing access. The Haats: Traditionally on certain days of week, both the

sellers and buyers meet in the village to buy and sell goods and services. These are the haats

that are being held regularly in all rural areas. The sellers arrive in the morning in the haat

and remain till late in the evening. Next day they move to another haat. The reason being that

in villages the wages are paid on weekly basis and haat is conducted on the day when the

villages get their wages. For the marketer, the haat can be an ideal platform for advertising

and selling of goods. By participating in haats and melas, the company can not only promote

and sell the products but also understand the shared values, beliefs and perceptions of rural

customers that influence his buying behaviour. Folk dances: These are well-

appreciated form of entertainment available to the village people. The folk dance “Kuravan

Kurathi” is popular in Tamil Nadu. The troupe consists of dancers, drummers and musicians

and they move in a well-decorated van from one village to another village singing and

dancing. In a day the troupe covers about 8-10 villages. As soon as the van reaches a village,

film songs are played to attract the attention of the villages. This is followed by folk dances.

Mike announcement is made about the company’s products and leaflets are distributed. After

the dance programme, queries, if any, about the products are answered by the sales person.

Folk dance programme costs about Rs.5000 per day and therefore these programmes are

conducted during the peak season in selected villages. Examples: Fertilizer and pesticide

companies organize folk dance programmes during peak season in selected markets. Thumps

Up has sponsored Lavnis, the folk dance programme of Maharashtra and over 30

programmes have been arranged in selected rural markets. Audio Visual Publicity Vans

(AVP Vans): AV unit is one of the effective tools for rural communication. The van is

a mobile promotion station having facilities for screening films slides and mike publicity. The

sales person makes a brief talk about situation in the village, the products and the benefits.

The ad film is screened along with some popular film shots and this continues for about 30

minutes. At the end of the film show, he distributes handbills and answers queries of the

customers. The whole operation takes about 1-2 hours depending upon the products under

promotion, number of participants in the meeting and time taken for question and answers.

The vans move to the next village for the second show. The cost of running a fully equipped

AVP unit is about Rs.4000 per day and AVP van operation has to be considered as an

investment for business development in rural areas. Example: Companies such as HLL,

Colgate, and Phillips have made effective use of AVP vans for popularizing their products in

rural areas. Product display contests: Package is an integral part of the product. Its

main purpose is to protect the product during transit, to preserve the quality and to avoid any

loss in quality and quantity. The main purpose of this contest is to remind the customer to buy

the product as soon as he enters the shop. Another objective is to influence the dealer to stock

the product and support the company in increasing the sales. The display contest has to be

announced well in advance and promotional materials to be distributed to all the selected

dealers in a geographical area. Prizes for best displays are announced to motivate the

dealers; the contest lasts for about a month. A well-planned product display contest not only

increases the involvement of dealers in the company’s products but also increases the sales

during the contest period. This is used for promoting consumer goods such as shampoos,

soaps and toothpaste. Field demonstration: This is based on the extension

principle “seeing is believing” and is one of the most effective methods to show the

superiority of the company’s products to the customers. A progressive farmer who is an

opinion leader is selected and the demonstration is conducted in his field in the presence of a

group of farmers in the village. The farmers observe the results in the field and the local

dealer calls on them in their farms and persuades them to buy the particular brand of pesticide

or fertilizer. Examples: a) Spraying a particular brand of an insecticide against insect pests

and showing the farmer how effectively the insects are controlled. b) Demonstrating the use

of tractor/implements for different agricultural operations. c) Hawkins pressure cooker has

demonstration representatives who carry out demos in rural households. The representative

receives 1% commission for every customer who approaches the dealer via demonstrations.

e) Similarly effectiveness of detergents, pressure cookers, vaccum cleaners and mosquito

coils could be promoted by demonstrations in selected markets. Field days: These are extension of field demonstrations. One of the main objectives of following

modern agricultural practices is to increase the yield. The company organizes demonstrations

in a piece of land belonging to progressive farmers. All the fertilizers, pesticides, nutrients

etc. are applied after making field observations. Just before harvest, all the important farmers

are invited to see demonstration plot and see for themselves how the yields are better in the

plot compared to other fields. Field demonstrations/field days consume lot of time and efforts

and therefore have to be planned well. Information centers: They provide latest

information on cultivation of crops, fertilizer application, weed, management and control of

pests and diseases. Experienced agricultural graduates who make frequent visits to the field

and advice farmers on modern agricultural practices manage the centers. They also provide

information on farm implements, seeds, fertilizers, pesticides, diesel engines, sprayers and

tractors etc. Many consumer goods companies have opened show rooms in prosperous rural

areas. Example: Hero Honda has opened extension counters with show room facilities in

major rural markets. Life-style marketing: Each rural market segment has certain

special features i.e. they share common life-style traits. They include village sports, religious

events, prominent personalities and role models. Examples: Textile mills maintaining

community gardens, Mineral water companies supplying clean drinking water during summer

festivals in villages and Consumer goods companies sponsoring Kabaddi. Choosing

media vehicles The choice of different media vehicles for any market is based on an

analysis of the standard features like: reach, frequency, cost & availability. Depending on the

factor of reach & frequency, the different media can be classified into the following

categories. This categorization can help the marketer to make a decision about which type of

media would be more suitable to the product & the organization. High reach High

frequency Jeep based advertising Wall painting Bus stand & bus

panels Haats Hoardings Postal branding Low reach High

frequency Co-operative notice board Shop front painting Tin plating –

house Dealer boards Village boards Well tiles Calendars/labels High reach Low frequency Van based advertising Melas Direct to

home Folklore group Exhibitions/created events Low reach Low

frequency Tin painting – tree/shops Leaflets Posters & banners Streamers Danglers FINDINGS AND ANALYSIS Which soap u prefer to

use? The reaction of people towards various SOAP brandscan be tabulated in the following

manner:BRANDSLUXDETTOLLIFEBUOYOTHERSPERCENTAGE36182224In the

survey, it could easily be concluded that LUX, the product of HUL was highly in demand.

LUX, the product of HUL covers 36%of the market share. After LUX, the other brands

(EXCEPT LUX, DETTOL, LIFEBUOY) covers 24%of the market share. This is then

followed by LIFEBUOY, the product of HUL with a market share of 22%,which is then

followed by DETTOL, the product of RECKITT BENCKISER with a market share of

18%. This data can be graphically explained with the help of the following bar

graph: Which pack u prefer to use? In order to determine the income pattern of the

consumers, it was necessary for the researcher to distribute the consumers on the basis of

their demand for the various packs of SOAP brands available in the market. However, the

reaction of people towards various packs of SOAP can be tabulated in the following

manner: PACK OF SOAPSSINGLE PACKFAMILY PACK ( 3 IN

1)PERCENTAGE5644 In the survey, I tried to differentiate amongst people with below

average household income, average household income &above household income. This

classification can be done on the basis of the daily expenditure that people make.56%

consumers demand single pack.44% consumers demand family packs i.e.3 in 1 pack. This data can be graphically explained with the help of the following bar graph: Which tea u prefer to use? The reaction of people towards various TEA brands can

be tabulated in the following manner: BRANDSTATA TEABROOKE BONDTAJ

MAHAL OTHERSPERCENTAGE32281822 In the survey, it could easily be

concluded that TATA TEA, the product of TATA has a market share of 32%.This is followed

by, BROOKE BOND, with a market share of 28%.Followed by other brands (EXCEPT

TATA TEA,BROOKE BOND,TAJ MAHAL)with a market share of 22%.This is finally

followed by TAJ MAHAL, the product of HUL which holds18%of the market share. Which tea pack u prefer to use? In order to determine the income pattern of the


their demand for the various packs of TEA brands available in the market. However, the

reaction of people towards various TEA packs can be tabulated in the following

manner: TEA PACKSSACHETMEDIUM PACKLARGE

PACKSPERCENTAGE483220 In the survey, I tried to differentiate amongst the

people, with below average household income, average household income & above

household income. This classification can be done on the basis of the daily expenditure that

people make. However, it can be concluded that sachets are most commonly used by the

people .i.e. 48%consumers demand sachet packs. 32%consumers demand medium pack.

20%consumers demand large pack. This data can be graphically explained with the help

of the following diagram: Which tooth paste u prefer to use? In the initial years, the

rural consumers preferred tooth powders, datoons etc. But from the last decade, the

preference of consumers towards toothpaste has been changed. A huge number of toothpastes

of different companies are sold in rural market. However, the reaction of people

towards various TOOTH PASTES can be tabulated as follows: BRANDSPEPSODENTCOLGATECLOSE UPOTHERSPERCENTAGE27352216 In the survey that the researcher conducted, it could easily be seen that COLGATE, the

product of COLGATE PALMOLIVE is the market leader, which covers 35%of the total

market. After that, PEPSODENT, the product of HUL is demanded by the customers, which

covers 27%of the market share. Followed by CLOSE – UP, the product of HUL is demanded

by the customers, which covers 22%of the market share. Which is then followed by others

brands (EXCEPT PEPSODENT, COLGATE, CLOSE -UP), which covers 16%of the total

market share. This data can be graphically explained with the help of the following bar

graph: Which coffee u prefer to use? The reaction of people towards various COFFEE

brands can be tabulated in the following manner: BRANDSBRUNESTLENESCAFEOTHERSPERCENTAGE26323210 In the survey,

it can be easily concluded that all the brands are facing tough competition. NESTLE,

the product of NESTLE S.A.& NESCAFE, another product of NESTLE S.A., shares equal

market share of 32%each.This means that they are in a very tough competition. This is

followed by BRU, the product of HUL which holds, 26%of the market share. While the other

brands hold only 10%of the market share. This data can be graphically explained with

the help of the following bar graph: Which cream u prefer to use? The reaction of

people towards various CREAM brands can be tabulated in the following

manner: BRANDSPONDSFAIR &

LOVELYAYUROTHERSPERCENTAGE28321426 In the survey, that I conducted, it

can easily be concluded that FAIR &LOVELY, the product of HUL, holds the major market

with a share of 32%.This is followed by, POND ’s, another product of HUL, which holds

28%of the market share. This is followed by, other brands (EXCEPT, PONDS, FAIR

&LOVELY &AYUR), which captures 26%of the market share. This is followed by AYUR,

the brand of AYUR ACADEMY OF NATURAL BEAUTY (AANB) which holds

14%of the total market share. This data can be graphically explained with the help of

the following bar graph: which hair oil u prefer to use? The reaction of people towards

various HAIR OIL brands can be tabulated in the following manner: BRANDSPARACHUTEDABUR AMLADABUR

VATIKAOTHERSPERCENTAGE37291915 In the survey, it can easily be concluded

that PARACHUTE, the product of MERICO captures 37%of the total market share. This is

followed by DABUR AMLA, the product of DABUR which captures 29%of the total market

share. This is followed by DABUR VATIKA, another product of DABUR which captures

19%of the market. And after that, followed by other brands (EXCEPT PARACHUTE,

DABUR AMLA, DABUR VATIKA) captures 15% of the market share. This data can

be graphically explained with the help of the following bar graph: Which biscuits u

prefer to use? The reaction of people towards various BISCUITS brands can be tabulated in

the following manner: BRANDSMARIE GOLDGOOD DAYPARLE

GOTHERSPERCENTAGE24213817 In the survey, it can easily be concluded that

PARLE-G, the product of PARLE , holds a major market share of 38%.This is followed by

MARIE GOLD, a product of BRITANNIA which holds 24%of the market share. After that,

GOOD DAY, another product of BRITANNIA, holds 21%of the market share. This is

followed by other brands (EXCEPT MARIE GOLD, GOOD DAY, PARLE-G) which hold a

market share of 17%. This data can be graphically explained with the help of the

following bar graph: Which detergent u prefer to use? The reaction of people towards

various DETERGENT brands can be tabulated in the following manner: BRANDSSURFRINTIDEOTHERSPERCENTAGE27352216 In the survey, it could

be easily concluded that RIN, the product of HUL captures 35%of the total market

share. This is followed by SURF, the product of HUL which has a market share of 27%.This

is followed by TIDE, the product of PROCTER & GAMBLE which has a market share of

27%.This is finally followed by other brands (EXCEPT SURF,RIN,TIDE)which captures

16%of the market share. This data can be graphically explained with the help of the

following bar graph: Which shampoo u prefer to use? The reaction of people towards

various SHAMPOO brands can be tabulated in the following manner: BRANDSCLINIC PLUSSUNSILKHEAD &

SHOULDERSOTHERSPERCENTAGE33252814 In the survey, it can easily be

concluded that CLINIC PLUS, the product of HUL, captures the major portion of the

market with a market share of 33%.This is followed by HEAD & SHOULDERS, the product

of PROCTER &GAMBLE which holds 28%of the market share. This is followed by

SUNSILK, the product of HUL which holds 25%of the market share. Finally followed by

other brands (EXCEPT CLINIC PLUS, SUNSILK, HEAD & SHOULDERS) with a market

share of 14%. This data can be graphically explained with the help of the following bar

graph: Which pack u prefer to use? In order to determine the income pattern of the


their demand for the various packs of SHAMPOO brands available in the market. 

However,the reaction of people towards various SHAMPOO packs can be tabulated in the

following manner: SHAMPOO PACKSSACHETSMALL PACKMEDIUM

PACKFAMILY PACKPERCENTAGE23322817 In the survey, I tried to differentiate

amongst the people, with below average household income, average household income

& above household income. This classification can be done on the basis of the daily

expenditure that people make. However, 32%consumers demand SMALL PACK. 28%

consumers demand medium pack.17% consumers demand large packs. This data can be

graphically explained with the help of the following bar graph: Which Television you

prefer to use ? The reaction of people towards various television brands can be tabulated in

the following manner: BRANDSONIDABELTEKCROWNOTHERSPERCENTAGE4023334In the survey, it can

easily be concluded that TELEVISION of ONIDA, captures the major portion of the market

with a market share of 40%.This is followed by CROWN, which holds 33%of the market

share. This is followed by BELTEK , which holds 23%of the market share. Finally followed

by other brands ( SAMSUNG, LG, SONY etc) with a market share of 4%. This data can

be graphically explained with the help of the following bar graph: Which bicycle you

prefer to use? The reaction of people towards various bicycle brands can be tabulated in the

following manner: BRANDSATLASHEROAVONOTHERSPERCENTAGE37332208 In the survey, it

can easily be concluded that the BICYCLE of ATLAS, captures the major portion of the

market with a market share of 37%.This is followed by HERO, which holds 33%of the

market share. This is followed by AVON , which holds 22%of the market share. Finally

followed by other brands (EXCEPT atlas, hero and avon ) with a market share of 8%. lefttop Which refrigerator you prefer to use? The reaction of people towards various

bicycle brands can be tabulated in the following manner: 

BRANDSGODREJVIDEOCONKELVINATOROTHERSPERCENTAGE38202814In the

survey, it can easily be concluded that the REFRIGERATOR of GODREJ, captures the major

portion of the market with a market share of 38%.This is followed by KELVINATOR, which

holds 28%of the market share. This is followed by VIDEOCON , which holds 20%of the

market share. Finally followed by other brands (LG, SAMSUNG etc ) with a market share of

14%. This data can be graphically explained with the help of the following bar

graph: s Which wrist watch you prefer to use? The reaction of people towards

various bicycle brands can be tabulated in the following manner: BRANDSHMTMAXIMATITANOTHERSPERCENTAGE26144020In the survey, it can

easily be concluded that the WRIST WATCH of TITAN, captures the major portion of the

market with a market share of 40%.This is followed by HMT, which holds 26%of the market

share. This is followed by MAXIMA , which holds 14%of the market share. Finally followed

by other brands (EXCEPT HMT, MAXIMA AND TITAN ) with a market share of 8%. s Which fan you prefer to use? The reaction of people towards various bicycle brands

can be tabulated in the following manner: BRANDSLOCAL

FANSPOLARKHAITANCROMPTON FANSPERCENTAGE32282218 In the survey,

it can easily be concluded that the FANS of LOCAL COMPANIES, captures the major

portion of the market with a market share of 32%.This is followed by POLAR, which holds

28%of the market share. This is followed by KHAITAN , which holds 22%of the market

share. Finally followed by CROMPTON with a market share of 18%. This data can be

graphically explained with the help of the following bar graph: s Conclusions Thus looking at the challenges and the opportunities which rural markets

offer to the marketers it can be said that the future is very promising for those who can

understand the dynamics of rural markets and exploit them to their best advantage. A radical

change in attitudes of marketers towards the vibrant and burgeoning rural markets is called

for, so they can successfully impress on the 230 million rural consumers spread over

approximately six hundred thousand villages in rural India. The rural market is very

large in compare to the urban market as well as it is more challenging market. The consumer

wants those products which are long lasting, good, easy to use and cheaper. The income level

of rural consumers is not as high as the income level of urban consumers that’s why they

want low price goods. It is one of the reasons that the sell of sachet is much larger in the rural

area in all segments. It is necessary for all the major companies to provide those products

which are easy to available and affordable to the consumers. It is right that the profit margin

is very low in the FMCG products, but at the same time the market size is much large in the

rural area. The companies can reduce their prices by cutting the costs on the packaging

because the rural consumers don’t need attractive packaging. Application of 4A* is also a

major task for the major companies in this area. Rural market has an untapped potential

like rain but it is different from the urban market so it requires the different marketing

strategies and marketer has to meet the challenges to be successful in rural market. In

this report, it can very easily be concluded that HUL, holds major portion of the FMCG

market. It holds major shares in the soap, detergent, shampoo & cream ’ s category. HUL’s

products are mainly in demand, because they provide these products in different packs. They

consider the fact that rural consumers do not have that much money to be spent on these

products. So, they prefer buying the small or the medium packs. However, large or family

packs are still been bought by few consumers, who are from a well –off families. In

the case of TEA, TATA holds a major share. In the case of COFFEE, NESTLE & NESCAFE

holds the major share. Rural consumers favor TATA because it is an old organization &it has

gained a lot of BRAND EQUITY which finally creates BRAND LOYALTY. In these

products, consumers do get brand loyal, because they do not want to take a risk with their

tastes. So they prefer sticking to one brand. These organizations supply their products in

various packs (small, medium &large), considering the buying capacity of their

consumers. As in the case of BISCUITS, PARLE-G holds the major market share.

Rural consumers favor PARLE-G because it is an old organization & it has gained a lot of

BRAND EQUITY which finally creates BRAND LOYALTY. In case of BISCUITS,

consumers do get brand loyal, because they do not want to take a risk with their tastes. So

they prefer sticking to one brand. Though it is the cheapest biscuit but still the taste is same

and unique. “ACHA, SASTA AND TIKAU”. In the case of TOOTH

PASTES,COLGATE PALMOLIVE holds a major market share. Consumers are very

concerned about their health, so if any product suits them they prefer sticking to that

product. And this product is also available in various packs, so rural consumers can se it

according to their buying capacity. In the case of HAIR OILS,MERICO holds the

major market share. MERICO is a much known organization & its product PARACHUTE

has reached all the places. So it is a known product, which has created a good amount of

goodwill for the organization. Consumers have confidence & trust in their product.

Therefore, they prefer buying it. And in the case of durable goods like tv, fan etc. in

rural areas people generally don’t buy the company products, they prefer to buy local

products because of lack of knowledge and the main factor is because of income factor,

which is quite low in rural areas. Illiteracy is also a main factor. For them there is no such

thing – “status symbol”. Although, there is a brand loyalty but the percentage is very

low. Suggestions &recommendations The researcher would like to suggest the

following points, so that the organizations can easily sell their products to their

consumers: 1.However,the demand of a product is also affected by its life cycle. If the

product is in the introduction stage, then it will definitely take some time to capture the

market, because in the introduction stage, consumers are not much aware about the product.

Therefore, it is the responsibility of the organization to create awareness amongst the

consumers. 2.They should adapt rigorous marketing strategies, in order to sustain in the

market. 3.There is immense competition in this sector. Therefore, the organizations

should try to gain competitive advantage against their competitor’s. 4.They should try

to reach as many people as possible. 5.For the organizations that are not much popular

amongst the consumers, should adopt Sales Promotion, as their marketing strategies. 6.Application of 4A ’ s has also become an important task for all the organizations.

(*4A=Availability, Affordability, Acceptability, Awareness) APPENDIX 1.

Some Facts about the rural market 70 % of India’s population lives in 627000 villages

in rural areas. 90 % of the rural population is concentrated in villages with a population of

less than 2000. According to the NCAER projections, the number of middle and high-income

households in rural India is expected to grow from 80 million to 111 million by 2007. In

urban India, the same is expected to grow from 46 million to 59 million. Packaged

consumer products: More than Rs. 2000 crores Market for Non-food items: Rs. 20000

crores growing at 2.5% p.a. Consumption of pesticides: 68,000 tonnes, growing at

12%p.a. Share of Rural market in overall consumption Toiletries Safety

Razor Blades48%Premium Soaps24%Tooth Paste20%Hair Oil20% OTC

products Medicated dress25%Cold Analgesic42%Antiseptic Creams28% 2.)

Product Adoption: Hair products were introduced to rural India in an attempt to capitalize on

a culture where hair grooming is taken extremely seriously by women. While rural women

may wear faded saris and little jewelry, few step out without ensuring that their hair is in

place. Consumer goods companies introduced a transplanted product from developed

markets, the 2-in-1 shampoo/conditioner. Companies thought that women would be attracted

to this product because it was cost-effective; however, initial sales were dismal. What

companies failed to recognize is that most rural consumers had previously never used

shampoo and did not value or understand the full benefits of conditioner. However, several

years back, Hindustan Lever focused on product development strategies for rural consumers

who still did not use shampoo in India. Their research indicated that a prevailing consumer

habit in rural India was to use soap for hair and body care. Rather than try to change instilled

consumer behavior, product developers focused on creating an opportunity. Consumers

wanted a product that was convenient and low-cost. The result was a new 2-in-1 soap, a

product that cleans the hair and body, and is targeted towards consumers in rural areas. SOME STRANGE FACTS Amazing innovator With a queer psychology of

purchase and usage, Indian rural market is still a puzzle to marketers. In many a case, it

stretches its imagination to find surprisingly different uses of some of the products. And the

red-faced marketers admit that they actually sell their products in areas they would otherwise

find difficult, simply because there are other uses for them. For instance, Buffaloes

displayed at the haats for sale are dyed an immaculate black withGodrej hair dye.Horlicks is

used as a health beverage to fatten up cattle in Bihar. In villages of Punjab, washing machines

are being used to make frothy lassi inbulk. Iodex is rubbed into the skins of animals after a

hard day's work to relievemuscular pain.3.) Communication Adaptation: Both, washing and

for taking bath - one requires water. Now for rural markets there are three sources of water -

wells, handpumps and ponds. For the first in the history of advertising - these were branded.

Special stickers were put on the handpumps, the walls of the wells were lined with

advertising tiles and tinplates were put on all the trees surrounding the ponds. The idea was to

advertise not only at the point of purchase but also at the time of consumption. This

case shows that the brand was some how relating to the consumer. It was right there when the

consumer wants it and responds to his needs when wanted. So the customer could also see the

advertising when he was bathing or washing. Now, the customers who bought these brands

got a sense of satisfaction by seeing their choice being advertised in these places while a

question was put in the minds of the customers who had bought other brands. Questionnaire name:occupation:monthly salary:a.less than 10,000b.10,000 –

25,000c.25,000 –50,000d.More than 50,000address:Which soap u prefer to use?

LuxLifebuoyDettolOthersWhich pack u prefer to use?Medium packFamily packWhich tea u

prefer to use?Taj mahalTata teaBrooke bondOthersWhich tea pack u prefer to use?

SachetSmall packMedium packWhich tooth paste u prefer to use?Colgate Close up

Pepsodent Others Which coffee u prefer to use?NestleNescafe Bru OthersWhich cream u

prefer to use?PondsFair and lovely Ayur Otherswhich hair oil u prefer to use?Parachute

Dabur amla Dabur vatikaOthersWhich biscuits u prefer to use?Good dayMarie goldParle

GOthers Which detergent u prefer to use?Surf Rin Tide OthersWhich shampoo u prefer to

use?Sunsilk Head and shoulders Clinic plusOthersWhich pack u prefer to use?SachetSmall

pack Medium packWhich Television you prefer to use ?OnidaBeltek CrownothersWhich

bicycle you prefer to use?AvonAtlasHero Others Which refrigerator you prefer to use?

Videocon Kelvinator Godrej OthersWhich wrist watch you prefer to use?Titan Hmt Maxima

Others Which fan you prefer to use? Local fans KhaitanPolar Crompton

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Documents

Analyze the Marketing of Consumer Products (Both Durable and Non Durable Products) in Rural Areas