Project Report On Rural Marketing At Parle

Presented To:- Prof. K Prof. Kavita Shukla

Presented From:- Brijesh Kumar Singh9/6/2010

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The Overview…

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 80 to 90 per cent.

Agriculture and agriculture related activities contribute to about 75% of the income in rural

areas. Over 6, 31,307 villages, 700 million people a myriad of languages many traditions and

a rich culture. A vibrant land with a long History. Rural Indian people are known as much for

their warmth as their diversity. The real “BHARAT”.

“EXPLORE THE RURAL MARKETS

DO NOT EXPLOIT THEM”.

INDIAN ECONOMY

--CROP CULTIVATION --INDUSTRY

--ANIMAL HUSBANDRY --BUSINESS

--DAIRYING --SERVICES

--FISHERIES

--POULTRY

--FORESTRY

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URBAN SECTORRURAL SECTOR

NON-

AGRICULTURAL

AGRICULTURAL

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Till recently, the focus of marketers in India was the urban consumer and by large no

specific efforts were made to reach the rural markets. But now it is felt 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 transportation and its various

satellite channels have exposed rural India to the outside world and hence their outlook to life

has changed. Because of all these factors, rural India is attracting more and more marketers.

Increase in competition, saturated urban markets, more and more new products

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

Indian rural markets have caught the attention to many companies, advertisers and

multinational companies. According to a recent survey conducted by 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 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 corporates. Companies like

Hindustan Lever, Colgate, Palmolive, Britannia, and even Multinational Companies (MNCs)

like Pepsi, Coca Cola, L.G., Philips, and Cavin Kare are all eyeing rural to capture the large

Indian Market.

Coming to the frame work of Rural Marketing broadly involves reaching the rural

customer, understanding their needs and wants, supply goods and services to meet their

requirements, carrying out after sales service that leads to customer satisfaction and repeat

purchase/ sales.

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Concept of Rural Marketing…

Rural marketing is a process of developing, pricing, promoting, distributing rural-

specific goods and services leading to exchange between urban and rural markets which

specifies consumer demand and also achieves organizational objectives.

Rural marketing involves a two-way marketing process, however, the prevailing flow

of goods and services from rural to rural areas cannot be undervalued.

Since demands’ of urban and rural folks are different, companies should manufacture

products to suit the rural demand rather than dump urban products on rural consumers.

The process should be able to straddle the attitudinal and socio-economic disparity

between the urban and rural consumers.

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Rural Marketing in India…

A thorough understanding of the rural markets has become an important aspect of

marketing in the Indian marketing

environment today. This attraction

towards the rural markets is

primarily due to the colossal size of

the varied demands of the 230

million rural people. In fact, the

rural markets are expanding in

India at such a rapid pace that they

have overtaken the growth in urban

markets. This rate of growth of the rural market segment is however not the only factor that

has driven marketing managers to go rural. The other compelling factor is the fact that the

urban markets are becoming increasingly complex, competitive and saturated.

Further, the vast untapped potential of the rural markets is growing at a rapid pace.

The policies of the government largely favour rural development programmes. This is clearly

highlighted by the fact that the outlay for rural development has risen from Rs 14000 crores

in the 7th plan to Rs 30000 crores in the 8th plan period. These figures also prove that the

rural market is emerging stronger with a gradual increase in disposable income of the rural

folk. In addition, better procurement prices fixed for the various crops and better yields due to

many research programmes have also contributed to the strengthening of the rural markets.

Thus, with the rural markets bulging in both size and volume, any marketing manager will be

missing a great potential opportunity if he does not go rural.

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Distinctiveness of Rural Markets…

The Indian rural market with its vast size and demand base offers great opportunities

to marketers. Two-thirds of countries consumers live in rural areas and almost half of the

national income is generated here. It is only natural that rural markets form an important part

of the total market of India. Our nation is classified in around 450 districts, and

approximately 630000 villages, which can be sorted in different parameters such as literacy

levels, accessibility, income levels, penetration, distances from nearest towns, etc. The

features of Indian rural markets are:

Major income from agriculture: Nearly 60 % of the rural income is from

agriculture. Hence rural prosperity is tied with agricultural prosperity.

Low standard of living: The consumer in the village area do have a low standard of

living because of low literacy, low per capita income, social backwardness, low

savings, etc.

Traditional Outlook : The rural consumer values old customs and tradition. They do

not prefer changes.

Diverse socio-economic backwardness: Rural consumers have diverse socio-

economic backwardness. This is different in different parts of the country.

Infrastructure Facilities : The Infrastructure Facilities like roads, warehouses,

communication system, and financial facilities are inadequate in rural areas. Hence

physical distribution becomes costly due to inadequate Infrastructure facilities.

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Problems Related To Rural Marketing…

Although the rural market does offer a vast untapped potential, it should also be

recognized that it is not that easy to operate in rural market because of several problems.

Rural marketing is thus a time consuming affair and requires considerable investments in

terms of evolving appropriate strategies with a view to tackle the problems.

The major problems faced are:

Underdeveloped People and Underdeveloped Markets : The number of people

below poverty line has not decreased in any

appreciable manner. Thus underdeveloped

people and consequently underdeveloped market

by and large characterize the rural markets. Vast

majorities of the rural people are tradition bound,

fatalistic and believe in old customs, traditions,

habits, taboos and practices.

Lack of Proper Physical Communication Facilities : Nearly fifty percent of the

villages in the country do not have all weather roads.

Physical communication of these villages is highly

expensive. Even today most villages in the eastern

parts of the country are inaccessible during the

monsoon.

Media for Rural Communication : Among the mass media at some point of time in

the late 50's and 60's radio was considered to be a potential medium for

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communication to the rural people. Another mass media is television and cinemas.

Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres,

which is far less when compared to the number of villages.

Dispersed Market : Rural areas are scattered and it is next to impossible to ensure the

availability of a brand all over the country. Seven Indian states account for 76% of the

country’s rural retail outlets, the total number of which is placed at around 3.7

million. Advertising in such a highly heterogeneous market, which is widely spread,

is very expensive.

Many Languages and Dialects : The number of

languages and dialects vary widely from state to

state, region to region and probably from district to

district. The messages have to be delivered in the

local languages and dialects. Even though the

number of recognized languages is only 16, the

dialects are estimated to be around 850.

Low Per Capita Income: Even though about 33-35% of gross domestic product is

generated in the rural areas it is shared by 74% of the population. Hence the per capita

incomes are low compared to the urban areas.

Low Levels of Literacy : - The literacy rate is low in rural areas as compared to urban

areas. This again leads to problem of communication for promotion purposes. Print

medium becomes ineffective and to an extent irrelevant in rural areas since its reach is

poor and so is the level of literacy.

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Prevalence of spurious brands and seasonal demand: - For any branded product

there are a multitude of ‘local variants’, which are cheaper, and, therefore, more

desirable to villagers.

Different way of thinking: - There is a vast difference in the lifestyles of the people.

The kind of choices of brands that an urban customer enjoys is different from the

choices available to the rural customer. The rural customer usually has 2 or 3 brands

to choose from whereas the urban one has multiple choices.

Constraints/Hurdles Faced…

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With the change in the economic policies of the government, many companies have

ventured into the rural markets. However, their efforts have not been sufficiently rewarded.

The various constraints can be enumerated as:-

Lack of Infrastructure : The basic facilities like roads, transport facilities, electricity,

telecommunication, etc are missing in most of the rural areas of India.

Market Planning and Awareness: Lack of awareness and understanding of

consumer behavior in rural markets, creates problems in formulating strategies and

plans.

Designing the Products: There is a drastic difference in the utility value in the urban

and rural market. A product with a particular design and pattern may not find

acceptance in rural markets, but may be a success in urban areas.

Inadequacy of Channels of Distribution : Due to comparatively less focus on rural

markets – the exploitation of the rural market to the fullest extent has not taken place.

Communication: With the given level of literacy and awareness of rural population,

communication constitutes a major hurdle in exploiting rural markets. Various factors

like language, religion, superstitions, rigidity etc make communication in rural

markets more difficult.

Right to Decision: In most rural families, it is the head of the family who decides

what to buy and when to buy. Consequently his purchase decisions are influenced by

his own personality traits, rather than the aptitude and perception of the actual

consumers of these goods.

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Pricing of the Product: Price factor is more crucial in rural areas than in urban

markets. The consumer must feel satisfied and benefited after paying the price for a

particular product.

Mass media…

The past two decades have seen a dramatic expansion of exposure to mass media in

rural areas. Since these are, almost, by definition urban media at present is an

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overwhelmingly urban portrayal of life and values, their impact on attitudes and behavior has

been profound.

Radio is the medium with the widest coverage. Studies have recently shown high

levels of exposure to radio broadcasting both within urban and rural areas, whether or

not listeners actually own a set. Many people listen to other people's radios or hear

them in public places. Surveys indicate that in rural areas more than a one third of the

married women of reproductive age have listened to a radio within the last week.

Television, video and films expose viewers to a common window on styles of life

and behaviour, an impact increased by the supranational reach of the media.

Television is extremely popular where it is

available. Television increasingly exposes viewers to

a wide range of national, regional and

international viewpoints. Rural exposure to

television has been lower by far than radio.

The mass media brings change wherever they go;

but change does not have to be random. Successful media campaigns have changed

attitudes and behaviour in a variety of areas, from basic literacy to health care and family

planning.

But Advertising to rural consumers continues to be a hit and miss affair. At best, it is

an exercise where communicators grapple with issues of language, regional and religious

affiliations and local sensitivities. Most often finding the right mix that will have a pan-

Indian rural appeal is the greatest challenge for advertisers. But more often than not,

marketers throw in the towel going in for simplistic solutions: such as going in for a mere

transliteration of advertising copy. The result: advertising that is rooted in urban

sensitivities and do not touch the hearts and minds of the rural consumer.

Various other reasons making the mass media ineffective are: -

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1. The Indian society is a complex social system with different castes, classes, creeds

and tribes. The high rate of illiteracy added to the inadequacy of mass media

impedes reach almost to 80% of India's population who reside in village.

2. Mass media reaches only 57% of the rural population. Generating awareness,

then, means utilizing targeted, unconventional media including ambient media.

3. Mass media is too glamorous, interpersonal and unreliable in contrast with the

familiar performance of traditional artist whom the villager could not only see and

hear, but even touch.

4. The communication and the design of marketing mix needs to be different, as

what attracts one need not attract the other as well. So again, even if the media

reaches a rural consumer, there might not be an impact as he may fail to connect

to it due to his different lifestyles. Moreover rural marketing is usually related

with products having low profit margins and high sales volumes and hence it is

more important to emphasize the availability of the product to all potential

consumers than an overdose of expensive inefficient mass-media strategies.

To understand the way the rural markets work - we need to go to these markets and

spend time there in understanding them. We live in surroundings where the things are

completely different from what the rural customer experiences. And we can't understand him

unless we go and spend time there. Things like what time does he get up, etc need to be

studied and customer needs to be understood. Also these studies need to be passed on so

others can also benefit from the ground works done and enhance them further.

We need in depth studies of the market, the medium, the message and the rural

customer in center of all these to understand the rural markets completely.

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The winning combination will be a good product with consistent quality and

availability. Once you earn the villagers' loyalty (and they are known for their brand loyalty),

it will be difficult for competitors to take away your customers.

RETAILERS: -For the rural customer

the choices available are limited. So the

retailer plays a very big role in the

purchase decision. Data on rural

consumer buying behavior indicates that

the rural retailer influences 35% of

purchase occasions. The rural customer

goes to the same shop always to buy his

things. And there is a very strong

bonding in terms of trust between the two. The buying behavior is also such that the

customer doesn't ask for the things by brand but like - "paanch rupey waali chaye dena".

Now it is on the retailer to push whatever brand he wants to push as they can influence

the buyer very easily and very strongly on the preferences. Therefore, sheer product

availability can determine brand choice, volumes and market share. Thus distribution is

the key factor for the success of rural marketing.

This includes, maintaining favorable trade relations, providing innovative incentives

to retailers and organizing demand generation activities among a host of other things.

In rural areas, the place where consumers prefer to shop is very important, because it

has been found that they buy their requirements from the same shop. This high shop loyalty is

accentuated by the "khata" system, which is widely practiced. Hence, if the product is not

available at the place where the consumer shops, he would buy some other available brand.

RURAL FOLK MEDIA: -As a general

rule, rural marketing involves more

intensive personal selling efforts

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compared to urban marketing. Marketers need to understand the psyche of the rural

consumers and then act accordingly. To effectively tap the rural market a brand must

associate it with the same things the rural folks do. Utilizing the various rural folk media

to reach them in their own language and in large numbers so that the brand can be

associated with the myriad rituals, celebrations, festivals, melas and other activities where

they assemble, can do this.

In the Indian rural marketing context, perhaps linguistics could provide a new

approach to tackling communication issues and arriving at a better understanding of rural

consumers. Also, the manner in which symbols and icons are used, which provides insights

and clues into the mindsets of rural audiences, can be deployed to grab their attention.

Though television and radio fare better then print, the best way to kick start sales are

events. Where the company meets and interacts with the audience, talks to them in their own

idioms and tells them what this product offers. Marketers should think up games and events,

which would attract the attention of the villagers from all professions uniformly. This would

require local level goods creation and social negotiation skills.

The best choice comes from weekly bazaars. With varying populations, one shop or

few shops cannot really cater to all the needs of the consumers. Thus, it makes sense to have

weekly outlets that caters to the needs of the consumers in these regions. Frugal though the

rural consumer is success from these weekly outlets is that much more pertinent.

What attracts her is the freshness of the produce, buying in the bulk for a week and

the bargaining power. These markets (haats and shandies) have high potential that corporates

are now waking up to. The scope that these markets offer to distribution is something that has

to be seriously considered. Distribution is clearly the key to rural marketing.

TRADITIONAL MEDIA can be used to reach

these people in the marketing of new concept.

The traditional media with its effective reach,

powerful input and personalized communication

system will help in realizing the goal. Besides

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this when the advertisement is couched in entertainment it goes down easily with the

villager.

The traditional media like folk/street plays, wall signs/shop paintings, van

campaign/Haat events (weekly fairs), melas, home-to-home contacts and product

demonstrations can be effectively used for this purpose.

Strategies…

The rural markets are expected to witness a different kind of a shift. As companies

aggressively compete to get a higher share of the rural pie, competitive advantage will lie

with those who have a higher reach.

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Marketing according to a leading management theorist Peter Druker can be put in this

way “There will be always, one can assume, be need for some selling. But the aim of

marketing is to make selling superfluous. The aim of marketing is to know and understand

the customer so well that the product or service fits him and sell itself. Ideally, marketing

should result in a customer who is ready to buy. All that should be needed then is to make the

product or service available."

Through this we feel that the gist of mktg. in rural & urban is the same. It is nothing

but teasing the minds of people, their desires, needs, expectations & playing with their

psychology. But the market for a product may vary in rural & urban area and the marketing

strategies to market the product is also different in urban and rural area.

The strategies should revolve around what attracts the rural customer to a product. For

example –

Packaging:

Rural customers are usually daily wage earners and they don’t have monthly incomes

like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced

packs that they can afford given their kind of income streams.

Packaging and package sizes are increasingly playing a vital role in the decision

making process of the rural buyers. Certain products like detergents and paste are bought in

large quantities, whereas shampoos, toilet soaps, eatables are bought in smaller pack sizes.

The reasoning behind this is that the products that are common to family members are bought

in large pack sizes, whereas individual-use products are preferred in smaller packs.

A successful example is that of HLL’s project ‘Operation Bharat’. HLL supplied

hampers for Rs. 5, 10, 15 and 20, each of which had a Clinic shampoo bottle, a tube each of

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Pepsodent, Fair & Lovely, and Pond’s Dreamflower Talc, in different sizes and

combinations. The idea behind this strategy was to have a product for hair care, dental care,

skin care and body care.

Value for money:

Rural consumers are quite brand conscious. A rural consumer wants value for money

minus the frills. Zany advertising and marketing would be a no-go for this sector.  A high

price tag usually deters the rural consumer from purchase. To counter this, companies need to

resort to low unit price strategy to expand sales.

A good example of this would be the sachet revolution and combi-packs. According

to a survey, 95 percent of total shampoo sales in rural India are by sachets. Colgate has

followed the very successful sachet route by introducing the toothpowders in 10g sachets of

Rs. 1.50 each and the toothpaste with Super Shakti in 15g packs of Rs. 3 each. The entrant

can also offer attractive exchange and money back schemes for its middle and lower

segments.

Convenience:

An example is what Colgate did to its tooth powder packaging. Firstly – it made

sachets as was required by their income streams. Secondly - since many households don’t

have proper bathrooms and only have a window or things like that to keep such things -- it

was wise to cap this sachet for convenience of storage while use. So this is what they did.

Demonstration:

Direct Contact is a face-to-face relationship with people individually and with groups

such as the Panchayat and other village groups. Such contact helps in arousing the villager's

interest in their own problem and motivating them towards self-development.

Demonstration may be:

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A. Method demonstration

B. Results demonstration

The five steps to make any demonstration effective are:

1. Information about people

2. Objectives to be accomplished

3. Demonstration plan & Execution of the plan

4. Evaluation of the demonstration

5. Reconsideration after evaluation.

In result demonstration, with help of audio -visual media can add value. Asian Paints

launched Utsav range by painting Mukhiya's house or Post office to demonstrate that paint

don’t peel off.

Promotion and marketing communication:

While planning promotional strategies in rural markets, marketers must be very

careful in choosing the vehicle to be used for communication. They must remember that only

16% of the rural population has access to a vernacular newspaper. Although television is

undoubtedly a powerful medium, the audiovisuals must be planned to convey a right message

to the rural folk.

The marketers must try and rely on the rich, traditional media forms like folk dances,

puppet shows, etc with which the rural consumers are familiar and comfortable, for high

impact product campaigns.

Thus, 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.

Wall Paintings

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Wall Paintings are an effective and economical medium for advertising in rural areas.

They are silent unlike traditional theatre .A

speech or film comes to an end, but wall

painting stays as long as the weather allows

it to. Rural household’s shopkeepers and

panchayats do not except any payment, for

their wall to be painted with product

messages.

The greatest advantage of the medium is the power of the picture completed with its

local touch. The images used have a strong emotional association with the surrounding, a feat

impossible for even a moving visual medium like television, which must use general image to

cater to greatest number of viewers.

Such a promotion has led to an interesting outcome. For both, washing and for taking

bath - one requires water. Now for rural markets there are three sources of water - wells, hand

pumps and ponds.

For the first in the history of advertising - these are being branded. Special stickers

were put on the hand pumps, the walls of the wells are lined with advertising tiles and

tinplates are put on all the trees surrounding the ponds. The idea is to advertise not only at the

point of purchase but also at the time of consumption.

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. So this was an innovative strategy that worked quite well.

Example of successful use of wall painting is by Nirma, which makes extensive use of

wall paintings, also a soil conditioner called Terracare uses images of Sita, Luv and Kush to

attract the rural consumer.

Haats & Melas

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The countries oldest tradition holds the key to

rural penetration. The average daily sale at a

Haat is about Rs.2.25 Lacs while the annual

sales at melas amount to Rs.3, 500 crore.

In rural India, annual melas organised

with a religious or festive significance are quite

popular and provide a very good platform for

distribution. Rural markets come alive at these melas and people visit them to make several

purchases.

According to the Indian Market Research Bureau, around 8000 such melas are held in

rural India every year.

Rural markets have the practice of fixing specific days in a week as Market Days

when exchange of goods and services are carried out. This is another potential low cost

distribution channel available to the marketers. Haats serve a good opportunity for promotion

after brand building has been done at Mela.

Also, one satellite town where people prefer to go to buy their durable commodities

generally serves every region consisting of several villages. If marketing managers use these

feeder towns they will easily be able to cover a large section of the rural population. Melas

are organized after harvest season, so the villager has enough money, which he will be ready

to spend. Demonstration at Haat is essential to convert customers at haats since their attitude

is far more utilitarian than that of visitors to a fair.

Dealing with this sector needs innovative and localized approaches: Watch major

Titan Industries plans to aggressively approach the rural and semi-urban markets in India by

creating a separate image for its low-priced Sonata brand. The company has opened its first

showroom in Bhopal and nine more showrooms are to be opened across the country. The

marketing strategy being followed is to keep the prices of the watches at an affordable range

of Rs 295-1,195 and create a niche market for the brand.

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They will not open showrooms in metros such as Mumbai or Delhi for Sonata brand.

The target segment would be the Rs 295-700 customers. They plan to open showrooms at

locations, which rural customers visit frequently such as bus terminals, railway stations

among others. Also, there would be a range of 300 models from smart plastics and all

weather steel to all gold and all-occasion gold and leather. Titan will be looking for the

marriage season, which will start from April-June where the rural customers become actual

buyers.

Another innovative idea is that of Sanjay Lalbhai's Ruf and Tuf jeans is targeted at

the rural market. And they are leaving nothing to chance. Arvind Mills is teaching tailors in

the villages how to stitch the jeans.

Mobile Traders:

Even though they have been used before for redistribution,

Cycle Salesman could possibly emerge as one of the most cost-

effective ways of selling directly to rural consumers. The lack of

motor able roads and high distribution costs are not a hindrance

any more. Mobile traders score over the conventional wholesale

channel on both counts of cost and reach. They travel either on foot or on cycles. That means

transportation costs are virtually non-existent. Besides these traders can target smaller

villages, which conventional distribution channels often do not touch?

The mobile traders can play a crucial role in buying decision. Most rural women are

loath to visit retail outlets. Mobile traders therefore are a smart way of reaching women in

their home environment. The women rely on these mobile traders to sell them goods in the

security of their home.

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Rural India is a marketer’s dream given its tremendous potential and increasing

money power. The formula of success for companies entails a complete shift in marketing

and advertising strategies.

"To be successful in the rural market, remember- there is no unity in diversity, but

act local while thinking global."

If Distribution is the Key, then what’s going wrong???

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Unfortunately, most marketers of today try to extend marketing plans that they use in

urban areas to the rural markets and face, on many occasions failure. They should adopt a

strategy that appeals individually to the rural audience and formulate separate annual plans

and sales targets for the rural segment.

Changes must be made in the marketing mix elements such as price, place, product

and promotion. Corporate marketers should refrain from designing goods for the urban

markets and subsequently pushing them in the rural areas. The unique consumption patterns,

tastes, and needs of the rural consumers should be analyzed at the product planning stage so

that they match the needs of the rural people.

Distribution costs and non-availability of retail outlets are major problems

faced by the marketers. But if one takes a closer look at the characteristic features of the

rural market, it will be clear that distribution in fact, is no problem at all. For most

companies wanting to enter the rural markets, distribution poses a serious problem.

The problems of physical distribution and channel management adversely

affect the service as well as the cost aspect. The existent market structure consists of

primary rural market and retail sales outlet. The structure involves stock points in feeder

towns to service these retail outlets at the village levels. But it becomes difficult

maintaining the required service level in the delivery of the product at retail level.

Solution…

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DELIVERY VANS:-

The way to overcome the problem would be by using company delivery vans, which

can serve two purposes- it can take the products to the customers in every nook and corner of

the market and it also enables the firm to establish direct contact with them and thereby

facilitate sales promotion. However, only the bigwigs can adopt this channel. The companies

with relatively fewer resources can go in for syndicated distribution where a tie-up between

non-competitive marketers can be established to facilitate distribution.

An example of the successful strategy is that of Tata Cellular in rural Andhra

Pradesh. Inspite of low advertisement budget, they created a hybrid distribution channel, with

four tiers direct, retail, showroom and franchise outlets that were designed for easy reach.

Specific road shows to rope in different segments such as transporters, traders and PSU

employees were organized.

Mr Harish Bijoor, CEO, Zip Telecom, says, "Rural markets need to be approached

differently and cannot be understood as extensions of urban markets. Most marketers err on

this count. Advertising that believes in translating the English version into the vernacular

cannot capture the rural heart. For rural markets, one needs to think in the local language,

remote with the local feel and mood and visualize advertising that is rich in this context."

To attract rural buyer’s advertisers need to use simple films showing how a product is

to be used. Rajdoot Paints issues such functional advertising very effectively.

Rural V/S Urban…

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SR. NO. ATTRIBUTE RURAL URBAN

1 Population Density Low High

2 Occupation Agriculture Trade, Industry, and

Services.

3 Economy Close and less

monetized.

Open and Monetized.

4 Infrastructure Poor and Weak. Abundant and Strong.

5 Attitude to Modernization Tradition bound. Ready for adaptation

and change.

6 Family Structure Joint Nuclear

7 Possession of House hold

assets

Low High

8 Mobility Low High

9 Literacy Low High

10 Exposure Low High

11 Attitude towards Life Fatalistic Scientific

12 Manufacturing Activity Low High

13 Distribution Outlets Fewer More

Marketing-Mix…

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Aspect Rural Urban

Product

a) Awareness

b) Concept

c) Positioning

d) Usage Method

e) Quality Preference

f) Features

Price

a) Sensitive

b) Level Desired

Physical Distribution

a) Channels

b) Transport Facilities

c) Product Availability

Promotion

a) Advertising

b) Personal Selling

c) Sales Promotion

d) Publicity

Low

Less Known

Difficult

Difficult to grasp

Moderate

Less Important

Very much

Low-Medium

Village Shops, Haats &

jatras.

Average

Limited

TV, Radio, Print Media to

some extent, More

Languages

Occasionally

Gifts, Price Discounts

Less

Limited

High

Known

Easy

Easily rasped

Good

Important

Yes

Medium-High

Wholesalers&

Retailers.

Good

High

Print, Audio-Visuals,

Outdoors, Exhibitions.

Door-to-Door

Frequently

Contests, Gifts, Price

Discounts

Good Opportunities.

Adequate scope

Present position…

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____________________________________________________RURAL MARKETING

Change is the “LAW OF NATURE”. Though change is common, some changes

seem peculiar and paradoxical. Today, we witness in Indian Economy one such a bi-faceted

change – a change from national to global on one side and, urban to rural on the other.

“RURALISE” is among the Buzz words of this new

era. Though change is evolutionary and

characteristic of a developing nation with huge

population and vast resources, one requires a

visionary entrepreneurship to respond

proactively to it.

The first five years of new millennium will belong

neither to the urban markets, which have reached saturation and where margins are under

pressure nor to the export markets, which suffer from inadequate infrastructure back home,

and uncompetitive price overseas. But it belongs to RURAL MARKETING.

“RURAL MARKETING” has become the latest mantra of most corporates. FMCG

majors like HLL, P&G, PARLE, COLGATE PALMOLIVE, BRITANNIA, etc. were the first

to wake up this fact. Even MNC’s like LG, PHILIPS, WIRLPOOL, and other consumer

electronic majors are also gung-ho about the rural segment. The fever has spread the

consumer durable companies and beyond.

Today, many of the Corporates and MNC’s look at these markets by compulsion as

well as by choice. Compulsion, because markets are saturated, and there is no where to go.

Choice: - because they are attractive and viable.

Profile of Rural Consumers…

- 27 -

____________________________________________________RURAL MARKETING

Importance of customs

This however raises a fundamental problem of fathoming the differences between

urban and rural markets in India. This is of paramount importance in the Indian marketing

environment as rural and urban markets in our country are so very diverse in nature that

urban marketing programmes just cannot be successfully extended to the rural markets.

The buying behaviour demonstrated by the rural Indian differs tremendously when

compared to the typical urban Indian. Further, the values, aspirations and needs of the rural

people vastly differ from that of the urban population. Basic cultural values have not yet

faded in rural India. Buying decisions are still made by the eldest male member in the rural

family whereas even children influence buying decisions in urban areas. Further, buying

decisions are highly influenced by social customs, traditions and beliefs in the rural markets .

Many rural purchases require collective social sanction, unheard off in urban areas.

Another contrasting feature is the precision in the assessment of purchasing power of

the consumers. In urban markets, income levels are generally used to measure purchasing

power and markets are segmented accordingly. However, this measure is not adequate for

defining the purchasing power in rural areas because of the single fact that rural incomes are

grossly underestimated. Farmers and rural artisans are paid in cash as well as in kind.

However, while reporting their incomes, they report only cash earnings, which then affect the

calculation of their purchasing power.

This is the reason why marketers are often surprised to find that their products are

sometimes consumed by people who, according to their surveys and estimates do not have

the purchasing power to do so. Every marketing manager must therefore make an attempt to

understand the rural consumer better so that he can plan his strategies in such a manner that

they produce the desired results.

Consumer Behavior, Influences and Its Implications…

- 28 -

____________________________________________________RURAL MARKETING

A stereotype of the rural consumer or of rural consumer behavior is absent and

this creates problems as well as opportunities for the marketer. Variations in behavior reflect

geographical, demographical and behavioral influences on lifestyle, which provides

marketers with options to segment the market.

 

To understand rural buying behavior, a marketer must first understand the

factors that influence buying behavior and the variations to behavior.

These help to generate information upon which a marketer can create bases to

segment the rural market taking the following factors consideration:

        Environment of the consumer

        Geographical Influences

        Influence of Occupation

        Place of Purchase

        Creative use of Products    

Obviously rural consumers do make some purchases from urban areas (towns

etc) because there are a few product categories where rural distribution is still comparatively

low and therefore the consumers buys from towns; and in certain cases, the consumer seeks

variety. In the case of biscuits, toilet soaps and washing powders, the consumers may

perceive the range in villages as limited.

 

The Next Step…

- 29 -

____________________________________________________RURAL MARKETING

The potentialities of the rural market are indeed

great. With the changing economic conditions in the

country and with emerging rural markets are bound to

yield rich dividends.

All this calls for concentrated and coordinated

action on the part of both, the government and the

industry.

The government’s role lies primarily in

developing the infrastructure, e.g. a good network of

roads in the interiors of rural India, speedy arrangements

for better light, water and irrigation facilities, financial and technical assistance in setting up

industries in villages, and distribution of their products. The government’s role will be

equally important in conducting rural market surveys and compilation of vital statistics and

their publication for the benefit of business and industry.

A hand-in-hand working of the government and industry will definitely help define a

smooth road to development and growth of rural market.

Hungry Kya???

- 30 -

____________________________________________________RURAL MARKETING

Its Biscuit Time folks!!!

Biscuits are something that doesn’t need an introduction as such. Everyone everyday

have them. Some have it for their taste, some for their health factor, some to fulfill their

hunger and so on.

A product that is consumed almost daily. A product that has no boundaries. There are

biscuits for all kinds of teeth. Sweet, Creamy, Salty, Semi Sweet, Sweet and Salty etc are the

various kinds of biscuits that are available in today’s market, fitting all kinds of mood. And if

you look at the history of biscuits, it dates back to second century Rome and it comes from

the Latin word "bis coctum" which mean twice baked.

As people started to explore the globe, biscuits became the ideal traveling food,

because they stayed fresh for long periods. Biscuits really boomed during the seafaring age,

when they were sealed in airtight containers to last for months at a time. In fact, the countries

where biscuits are most popular today, such those in Western Europe, led the seafaring

charge. The present biscuits scenario in India looks like a battle front.

The battle being led by stalwarts like Britannia and Parle with close competition from

other companies like ITC, Nutrine, HLL Kissan, Kwality and even International Brands like

Kellogg’s, Nestle, Sara Lee, United Biscuits etc. Britannia is undoubtedly the leader with

Brands like Tiger, Little Hearts, and Milk Bikis etc.

- 31 -

____________________________________________________RURAL MARKETING

Britannia's Tiger biscuits are doing a world of good to the company. It is indeed

selling like hot pancakes in the rural areas which actually constitute 56% of the biscuit

market.

But in the Glucose segment Parle G is the market leader. Parle G has indeed become

a household name. Not to forget the Market niches coming in the form of Hll and ITC. Hll

bistix(biscuits sticks that can be dipped into flavours like Strawberry and Chocolate) is

indeed an innovation and will surely have and is surely having a lot of takers. The pricing

adopted by HLL is also kind of unique. Its charging only Rs 5 for Bistix.

Whereas, ITC's foray into the world of Biscuits seems to be paying off good. ITC

Sunfeast brand of biscuits with a new and peppy flavour of Marie, Orange will surely

generate a kind of curiosity in the minds of biscuit consumers. The toughest competition for

these established players come from the unorganized market. This market is indeed

interesting to study. It consists of "n" number of companies. They are more or less

Counterfeiters or Cloners.

- 32 -