Professional Documents
Culture Documents
Sachin Rural Marketing
Sachin Rural Marketing
INTRODUCTION
India lives in her villages.
As described by Adi Godrej, Chairman, Godrej Group The rural consumer 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
corporates 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 from 8 to 9percent. 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. Infect it has been
estimated that the rural markets are growing at five 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.
RURAL MARKETING
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.
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.
2
RURAL MARKETING
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.
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 "Yaara da Tashan..." McCann Erickson's
steadily to build their infrastructure to meet the ads with Aamir Khan created universal
growing needs of the rural market, which appeal for Coca Cola
reiterates the fact that this multinational has realized 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
3
RURAL MARKETING
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.
Fulcrum's Gowthaman says, "The biggest
impending factor or deterrent on rural monies
RURAL MARKETING
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."
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
specialized 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!
RURAL MARKETING
RURAL MARKETING
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:
1
2
Area Population
BHOWAPUR
MORTI
SHAHPUR
ATTOR
2500
3000
5000
4000
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.
7
RURAL MARKETING
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 Titans Sonata watches, Coco Colas 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
RURAL MARKETING
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.
RURAL MARKETING
RESEARCH METHODOLOGY
Research methodology is simple framework or plan for the study that is as guide in collection
and analyzing the data. It is the blue print that is followed in completes the study. Thus, good
research methodology ensures the completion of project efficiency and affectivity. Since there
are many aspect of research methodology, the line of action has to be chosen from the variety of
alternatives, to choose the suitable method through the assessment from various alternatives.
Research methodology gives the researcher an opportunity to put forward his
argument for having opted for certain alternatives and also at the same time he can justify his
ruling out some other possibility likes. Why research study has been undertaken, how the
research problem has been formulated what data has been collected, what particular technique if
10
RURAL MARKETING
analyzing the data has been used and lot of similar type question are usually answered when we
talk of research problem in study.
Keeping in view the above stated objectives the following methodology was adopted:
Develop the research plan: .To makes the plan for overall research as how, when, where and from whom researcher
will collect the data
Collect the information: The information can be collected by primary data or secondary data, or by the
combination of both methods.
PRIMARY DATA
Market Survey
Personal Interview
SECONDARY DATA
Internet
11
RURAL MARKETING
Business Journal
Analyze the information: After collecting the data the next step is to analyze the information.
Present the findings: To make a summary on the basis of analyzing the collect data and find out the situation
Make the decision: The last step is to take a decision on the basis of finding that what action should be regarding the
findings
INDIA INFRASTRUCTURE
The best barometer of countrys 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
12
RURAL MARKETING
with political consensus in reforms and stable democratic environment .In 2008-09 Indias
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 up to
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.
Investment Opportunities In Indian Infrastructure
The robust current growth in GDP has exposed the grave inadequacies in the countrys
infrastructure sectors. The strong population growth in India and its booming economy are
generating enormous pressures to modernize and expand Indias 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 Indias 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 Indias 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$
13
RURAL MARKETING
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.
URBAN
RURAL
RURAL
URBAN
RURAL
RURAL
14
RURAL MARKETING
1. 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.
2. 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.
3. 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.
RURAL MARKETING
PHAS
E
ORIGIN
FUNCTION
Before
Mid-
1960
(from Agricultural
independence
to
II
MAJOR
SOURCE
DESTINATION
PRODUCTS
MARKET
MARKET
Agricultural
Rural
Urban
Urban
Rural
Marketing
Produce
Marketing Of
Agricultural
green
revolution)
MidSixties
(Green
revolution
to Agricultural
Pre-
Inputs
Inputs
liberalization
III
IV
period)
Mid- Nineties
Consumables
(Post-
Rural
And
liberalization
Marketing
Durables For
Rural
period on 20th
Consumption
century)
& Production
21st century
services
Rural
&
Rural
RURAL MARKETING
RURAL MARKETING
power remains unexploited and with the growing reach of the television, it is now quite easy for
the marketers to capture these markets.
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 2000.3 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.
18
RURAL MARKETING
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.
Secondary Players
1. Colgate-Palmolive (India) Ltd.
2. Godrej Consumers Product Ltd.
3. Nirma Ltd.
4. Tata Tea Ltd.
5. Parle Agro
19
RURAL MARKETING
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
(Pantaloons-Godrej JV), Choupal Sagars (ITC), Kisan Sansars (Tata), Reliance Fresh, Project
Shakti (Hindustan Unilever) and Naya Yug Bazaar are established rural retail hubs.
Pharmaceuticals
20
RURAL MARKETING
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.
21
RURAL MARKETING
In a bid to acquire rural subscribers, most Indian telecom operators have started investing in
infrastructure to roll out their services in these areas. Realizing 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.
22
RURAL MARKETING
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.
23
RURAL MARKETING
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.
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".
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 manufacturedgoods and is fast
expanding. Farmers cultivating sugar cane in UP andKarnataka fall in this category.
24
RURAL MARKETING
The Poor: This constitutes a huge segment. Purchasing power is less,but strength is
more. They receive the grants from government and reapthe benefits of many such
schemes and may move towards the middleclass. The farmers of Bihar and Orissa fall
under this category.
3. 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.
4. 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.
25
RURAL MARKETING
6.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 consumers behaviour in these areas is traditional, which
may be a problem for effective communication.
1.
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.
26
RURAL MARKETING
INCOME GROUP
ABOVE RS. 100,000
RS. 77,001-100,000
RS. 50,001-77,000
RS. 25,001-50,000
RS.25,000 & BELOW
2000-01
1.6
2.7
8.3
26.0
61.4
2005-06
3.8
4.7
13.0
41.1
37.4
2008-09
5.6
5.8
22.4
44.6
20.2
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.
\
3. Growth in consumption:
NO
STATES
EXPENDITUR
High
(Above Rs 382/-)
Average
(Rs. 382/-)
Low
(Below
382/-)
Rs. 3
Punjab
Kerala
Haryana
Rajasthan
Gujarat
Andhra Pradesh
Maharashtra
West Bengal
Orissa
Tamil Naidu
Uttar Pradesh
Karnataka
Assam
Madhya
614
604
546
452
416
386
384
382
381
381
373
365
338
326
Pradesh
Bihar
289
2006 07
27
RURAL MARKETING
INCOME
GROUPS
HIGH
MIDDLE
RURAL
TOTAL NO.
0.26
0.07
%
26.
12.04
7.73
9
64.
LOW
5.7
5.09
2
88.
TOTAL
18.04
12.8
7
71.
RURAL
TOTAL NO.
0.52
0.12
%
23.
16.72
10.3
1
61.
3.68
2
3.52
8
95.7
20.90
13.9
66.
% RIC
FOOD ARTICLES
TOILETRIES
4
2
WASHING
0
1
MATERIAL
COSMETICS
3
1
0
4
9
OTC PRODUCTS
OTHERS
TOTAL
POO
AVERAG
147
73
95
67
33
43
43
22
28
33
17
21
13
30
333
6
15
166
9
19
215
Average rural household spends on consumables excluding food grains, milk &
vegetables are Rs. 215/-.
750
1500
+
28
RURAL MARKETING
WASHING CAKES/BARS 60
SHAMPOOS
57
TOOTH
22
78
72
36
86
89
65
91
93
85
25
30
41
48
63
64
PASTE/POWDER
BATHING SOAPS
TEA (PACKAGED)
20
22
URBAN
MARKET
RURAL
GROWTH
Popular soaps
Premium soaps
Maturity
Late
growth
Washing powder Late
Skin creams
Tea
growth
Maturity
Maturity
RATE %
2
11
Growth
Early
growth
Early
1.1
4
growth
Growth
Growth
6. 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.
7. Rural marketing is not expensive: Conventional wisdom dictates that since rural
consumers are dispersed, reaching them is costly. However, new research indicates that the
29
RURAL MARKETING
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.
8. 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 marketers imagination and initiative.
ASPECT
.
1
URBAN
RURAL
& Concepts,
Relationship
Development
Marketing
Marketing
&
Relationship
Marketing
2
A)
B)
C)
MARKET
DEMAND
COMPETITION
CONSUMERS
LOCATION
LITERACY
INCOME
EXPENDITURE
NEEDS
INNOVATION/ADOPTION
High
Among
Units
Low
In Mostly
From
Organized Sector
Unorganized Units
Concentrated
High
High
Planned, Even
High Level
Faster
Widely Spread
Low
Low
Seasonal, Variation
Low Level
Slow
PRODUCT
30
RURAL MARKETING
AWARENESS
CONCEPT
POSITIONING
USAGE METHOD
QUALITY PREFERENCE
High
Known
Easy
Easily Grasped
Good
Low
Less Known
Difficult
Difficult To Grasp
Moderate
SENSITIVE
Yes
Medium-high
Very much
Medium-low
PRICE
LEVEL DESIRED
.
31
RURAL MARKETING
PURCHASE BEHAVIOR:
Rural people can buy only from three places includes:
1) From the shop in the same village
2) Weekly bazaar
3) From the shop of nearby town.
RURAL MARKETING
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.
33
RURAL MARKETING
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 productlevel
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 absenceof the choice, substandard 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.
CORE
BENEFIT
BASIC
PRODUCT
EXPECTED
PRODUCT
AUGMENTE
D PRODUCT
POTENTIAL
PRODUCT
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
34
RURAL MARKETING
shampoo only once a week. Habits take time to change and making unit sachet packs affordable
is the key to inducing trial and purchase.
Pricing
A significant portion of the rural population is paid in daily wages. Daily wage earnerstend to
have little stock of money, and therefore tend to make purchases only to meettheir 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 muchwider 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.
STATUS SEEKING
CONSUMERS
BUDGET CONSCIOUS
CONSUMER
35
RURAL MARKETING
BRAND NAME
MODEL
TECHNOLOGY
IMAGE
BUDGET
BUDGET
WARRANTY
AFTER SALES
BRAND NAME
MODEL
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 are very high. The
perceived utility or value of the product or service is the ultimate decision making factor
RURAL MARKETING
37
RURAL MARKETING
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
38
RURAL MARKETING
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 cant be applied directly in
rural markets.Reaching the right place is the toughest part in todays 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 companys 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 Indias 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.
39
RURAL MARKETING
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.
40
RURAL MARKETING
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.
41
RURAL MARKETING
42
RURAL MARKETING
43
RURAL MARKETING
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.
Nokias 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.
44
RURAL MARKETING
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. 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 times 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.
45
RURAL MARKETING
Pricing strategies
1. Low cost/ cheap products: This follows from the product strategy. The price can be kept
low by low unit packagings 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.
46
RURAL MARKETING
Forexample, 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.
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.
Promotion strategies
47
RURAL MARKETING
RURAL MARKETING
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.
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:
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.
49
RURAL MARKETING
3. Use of co-operative societies: There are over 3 lacks co-operative societies operating in
rural areas for different purposes like marketing cooperatives, farmers 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 tribals. 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. 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 inMaharashtra proved an eye opener in this regard where the sugar and milk cooperatives have totally changed the life style of people
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 Media
Local Media
Personalized Media
50
RURAL MARKETING
Radio
Cinema
Press
TV
Direct Communication
Dealers
Sales Persons
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 programmers 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
51
RURAL MARKETING
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.
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.
52
RURAL MARKETING
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 companys/distributors
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.
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
53
RURAL MARKETING
fields. Field demonstrations/field days consume lot of time and efforts and therefore have to be
planned well
LUX
36
DETTOL
18
LIFEBUOY
22
OTHERS
24
In 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:
54
RURAL MARKETING
40
35
30
25
LUX
LIFEBUOY
20
DETTOL
15
OTHERS
10
5
0
BRANDS
SINGLE PACK
56
FAMILY PACK ( 3 IN 1)
44
55
RURAL MARKETING
60
50
40
SINGLE PACK
30
Column1
20
10
0
PACKS PREFERRED BY CUSTOMERS
TATA TEA
BROOKE
TAJ MAHAL
OTHERS
PERCENTAGE
32
BOND
28
18
22
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.
This data can be graphically explained with the help of thefollowing bar graph:
56
RURAL MARKETING
35
30
25
TATA TEA
BROOKE BOND
20
TAJ MAHAL
15
OTHERS
10
5
0
BRANDS
researcher to distribute the consumers on the basis of 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 PACKS
PERCENTAGE
SACHET
48
MEDIUM PACK
32
LARGE PACKS
20
57
RURAL MARKETING
50
45
40
35
SACHET
30
MEDIUM PACK
25
LARGE PACK
20
15
10
5
0
PACKS PREFERRED BY CUSTOMERS
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:
BRANDS
PERCENTAGE
PEPSODENT
27
COLGATE
35
CLOSE UP
22
OTHERS
16
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), whichcovers 16%of the total market share.
58
RURAL MARKETING
This data can be graphically explained with the help of the following bar graph:
35
30
25
PEPSODENT
COLGATE
20
CLOSE UP
15
OTHERS
10
5
0
BRANDS
following manner:
BRANDS
PERCENTAGE
BRU
26
NESTLE
32
NESCAFE
32
OTHERS
10
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 theother brands hold only 10%of the market share.
This data can be graphically explained with the help of the following bar graph:
59
RURAL MARKETING
35
30
25
BRU
NESTLE
20
NESCAFE
15
OTHERS
10
5
0
BRANDS
60
RURAL MARKETING
CONCLUSION
This study has shown the new facts relating to the rural market and rural consumer. Consumer
buys frequently and in less quantity. They get influenced with retailers opinion immediately.
1. As purchase gap is less than a week in case of soap/detergent. So we conclude that they buy
goods on need driven demand basis.
2. They get attracted towards additional benefits immediately. As they are interested in various
promotional schemes.
3. Still, awareness level regarding various promotional schemes is very less in the rural
consumer.
4. They ask retailer for his/her opinion about the product before purchase.
5. Retailers in rural villages do not get any additional incentive for the sale of a particular
product.
6. Retailers are of the view that distributor/wholesaler consumes all the benefits.
7. Local retailers have a firm belief that they can sell any product in the rural market if they are
provided with additional incentive.
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RURAL MARKETING
Indian rural market is very vast and there is huge scope for hair oil industry. It was
observed that rural customers are very loyal and they buy out of habit. Many of them use the
product because their grandparents use it. Thus once the company has won the faith of the
customer they will buy it out of habit. There are many companies which are into branded hair oil
but the major players in Punjab are Bajaj, Marico, Hair & Care, and Dabur. They had penetrated
deep in to the markets of Punjab and are the most preferred in the Punjab. The customers in
Punjab are very loyal and most of them are satisfied with their respective brands. The market is
very vast and there are some villages where some of the brands are not even known to the
customers. The local players are also present but do not have large market share.
The rural markets dominate Indian marketing scene and need special Attention for the
expansion of marketing activities and also for providing betterlife and welfare to the rural
people. Given the development, which has taken place in the rural areas under the five- year
plans and other special programmes, today the rural market offers a vast untapped potential.
Development programs in the field of agriculture and allied activities, health education,
communication, rural electrification, etc. have improved the lifestyles
In the end it is certain that FMCG companies will have to really gain inroads in the rural
markets in order to achieve double digit growth targets in future. There is huge potential and
definitely there is lot of money in rural India but the smart thing would be to weigh in the
roadblocks as carefully as possible. The companies entering rural market must do so for strategic
reasons and not for tactical gains as rural consumer is still a closed book and it is only through
unwavering commitment that the companies can make a dent in the market. Ultimately the
winner would be the one with the required resources like time and money and also with the much
needed innovative ideas to tap the rural markets.
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 thats why they want low price goods. It is one of the reasons that the selling 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 236 size is much large in the rural area. The
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RURAL MARKETING
companies can reduce their prices by cutting the costs on the packaging because the rural
consumers dont 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. A rural consumer seeks a good qualitative product at reasonable price
with some additional advantage in terms of quantity of price reduction.
APPENDIX
a)
b)
c)
d)
name:
occupation:
monthly salary:
a. Less than 10,000
b.10,000 25,000
c.25,000 50,000
d.More than 50,000
address:
RURAL MARKETING
a)
b)
c)
d)
Taj mahal
Tata tea
Brooke bond
Others
Colgate
Close up
Pepsodent
Others
Nestle
Nescafe
Bru
Others
Ponds
Fair and lovely
Ayur
Others
Parachute
Dabur amla
Dabur vatika
Others
Good day
Marie gold
Parle G
Others
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RURAL MARKETING
BIBLIOGRAPHY
www.agencyfages.com
www.oligvys.com
www.adagency.com
www.wikipedia.com
www.google.com
wwwyahoo.com
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