| |

|

| 

 | 
   

Y Ramkishen
|   ± Pradeep Kashap & Siddhartha Raut
|   ± An Integrated Approach
CGS Krishnmacharyulu & Llith Ramkrishnan
  !

PROFILE OF RURAL MARKET

RURAL CONSUMER

MARKETING RESEARCH

RURAL MARKET RESEARCH

RURAL SEGMENTATION ±TARGETING & POSITIONING

RURAL MARKETING STRATEGY

RURAL PRODUCT

RURAL PRICE

RURAL DISTRIBUTION

RURAL SALES FORCE MANAGEMENT

RURAL COMMUNICATION
ã | 

Government agencies like I|"
(Insurance Regulatory

And Development Agency and 
|#National Council
for applied Economic Research) define Rural as villages
with a population <5000 with 75% male population engaged
In agriculture etc´
Towns are actually rural areas but satisfy
 The following criteria
Minimum Population>=5000
75% of the mail population engaged in
Non ±agri activity

Location with population up to 10000

|$
Considered Rural
Semi Urban 10000 to 100000

All locations upto a population of 10000


|" Will be considered Rural

All locations having shops/establishments¶

!   Upto 10000 (not population related) are
Treated as Rural

The rural and semi urban area is defined


% As all cities other than major metros

Concept of Rural from the perspective of marketing has

Indeed been dynamic.- gradually changed over the times
Was not India a so called Village/Rural for the world a
couple of decades back
a
 a
   

 



 ã |  

Developing of the market in the area as defined as Rural

Hence it could be aptly said that it encompasses the
Activities such as developing the process to meet this
Objective ± Right product at the right price to the right people
at the right time. Exchange between rural and Urban is a
Factor . Could be Urban to Rural: Rural to Urban, Rural to
Rural
 Size of the market

Largely Untapped

Too crowded Urban Market

Income on the
rise/disposable income

| Income from other than

  agriculture

|  Income flow from urban

/abroad
Better exposure - media

Great success stories

ËHLL 50%
ËColgate 50%
ËLG 50%
ËAsian Paints 60%
ËDabur 40%
ËVideocon 40%
ËCadbury¶s 25%
ËHero Hona 40%
þ



  

  | &|  

ËExtremely Diverse Market

Villages ± Size,
Population,
Spread,
Income
Literacy levels ,
awareness level,
languages

ËUrban Market ± scope and saturation

ËFlow of funds ± from Urban National /International

ËLiteracy levels on the rise

ËMedia Penetration
 & ' |  


ËScientific methods ± major impetus to Production of

food grains

ËExport on the rise ± Increase in agriculture and handicrafts

ËInitiatives taken by banks for more branches and Kisan

credit card to buy seeds, fertilizers, consumer goods on
installment basis

ËReputed Companies helping in changing lifestyles ± Levers

Britania ,Dabur, LG, Honda,Videocon

ËMedia creating an impact-creating awareness levels

ËGovernment Policies ± White Revolution ± Milk products

Yellow Revolution (poultry and edible oils)
Blue Revolution ± Aqua culture

ËEmployment Schemes ± JRY(Jawahar Rojgar Yojna,

PMRY,Small Industries Training,

ËRuiral Electrification, Spend on Health and Sanitation,

Medical and Health, Primary Education,

ËCredit card for farmers

ËWaiver of Loans

Ë Initiatives by leading organization in spreading awareness

Hindustan Levels Shakti, ITC Reliance etc
Move to Rural Market «encouraging Data

Rural India buys

Soft Drinks approx 45% of all soft drinks

Almost 50% motor cycles
Approx 55% of cigarettes
Half the total market for TV,
Fans,
pressure cooker,
bicycles
Washing soap,
tea,
blades,
salt,
toothpowder

Coca Cola is growing over 35% in Rural areas compared to

Over 22 % in Urban

According to Hasna Research , a market research farm that

Has published a Guide to Indian Markets 2006
Consumer durables in Indian Villages risen sharply
TV Sales up by 200%
Motorcycle by 77%

There are 3000 households in rural area that earn > 50 lakhs

ã  

 
   
 Low per capita income

Low disposable income

Inadequate fixed income

(daily wages)

PROBLEMS Majority ± depends on Agricultural

Income
IN ËAcute dependence on monsoon
ËConsumption linked to harvest
RURAL
Infrastructure problems
MARKETING
Roads, power

Low awareness

Communication- difficult & expensive

Too many languages

Geographic Spread

  
 

 (|  

)" 

ËPer capita Income

ËDisposable Income

ËLiteracy levels

ËInfrastructure

ËCommunication

ËGeographical Spread

ËCustomer has many choices

@





@






>Low Literacy Level

>Low Income Level
>Massive Geographic Spread
Urban population concentrated 3200 cities town
Rural scattered over 630000 villages

>Reference Group
Health Workers
Doctors
Teachers
Panchayat Members
Rural Bank Managers
District Managers

Ë4ccupation ƛ Principal Farming

Trading
Handicrafts
Cattle & Poultry Farming
>Media Habits Fond of music T.V Radio Video Films

Generally they have a lot of reservation/inhibition

rigid in their behaviour
 | |
 ! |
!!

ËThe Affluent Class

ËThe Middle Class

ËThe Poor

RURAL CONSUMER BEHAVIOR

How does an individual decide to spread his

Available resources (time,money effort) on
Consumption-related products.

That is ± what they buy

why they buy
when they buy
where they buy it
how often they buy it
how often they use it

+ )|

ã 
*( 

 

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!*
&
>Consumer belief
Inputs to any senses
Consumer feelings
ËProducts
ËPackage
ËCommercials
ËBrand image
ËReference
ËInformation cues about
the characteristics of the
product
 
Depends on

,    

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 Awareness
)
Affordability
 
Availability
2

Acceptability

2 2


Promotion Awareness

Price Affordable

Product Acceptable

Place Available
| |

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ËRetail shops/STD booths

ËTea Stalls

ËPlaygrounds/schools

! |! ËChaupals (meeting point

old/middle aged/
K | influential)

 " 
ËHaats & Melas

| |
 ËInfluence Group


| !& )! 

|!
|3 ËGovernment website

www.censusindia.com
www.indiastat.com
www agroindia.com

ËPrivate bodies (market research

advertising agencies
Indian Market Research Bureau
Thompson Rural Index
Guide to Rural Markets

ËPublications
 & |  | 
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Very Varied ±hence proper segmentation very essential

  :
Region North, East, West and South
Village size
Climate

"*  
Age
Family Size
Gender
Income
Occupation
Education
Caste

)   
(consists of psychological: sociology: anthropological)
Lifestyle Rigid ,changing attitude, urban influence
Personality Authoritarian, Ambitious

  
Occasions Regular, special occasion
Benefits
User status regular user, first time user, non user
Usage rate Light, medium, heavy
Loyalty None, medium, strong
Attitude to ) positive, negative, hostile
Product )

 


  



 $778.
 | *  79 :;;9<:;;=

The Affluent/Very Rich Households owning 1.60% 5.60%

personal cars/jeep with other products

The Well Off Household owning any/all of the foll. 2.70% 5.80%

A.C/Motorcycle/scooter/washing m/c

color TV with other durable (No car/jeep)

The Climbers Households owning any/all of the foll 8.30% 22.40%

VCR/VCP,mixer grinder sewing m/c

audio equip, B/W TV,geyser with other durables

(not those mentioned in above 2 categories)

The Aspirants Households owning any/all of the foll 26.00% 44.60%

bicycle,electric fans, electric iron with other durab

(not those mentioned in above 3 categories)

The Destitutes/Poor Households other than those classified above 61.40% 20.20%

Households owning any/all of the foll

wristwatch,pressure cooker,cassette recorder

transistor/radio

þ
 a
"+ 3| K

ËSelect the Target Market

ËEvaluate the Market
ËEvaluate the Segment
size
growth rate
profitability
accessible
compatible with firm¶s resources & capabilities

High

Value
to Rural
Customer

Low

Easy Hard

Ease of Implementation

|


>Select Target Segment

>Formulate Market a marketing strategy for the target market
 ! 

   

 

 
>!*  !*?
3
ËUSP of the product ± uniqueness of the product
ËSpecial needs ± either address partially/ unaddressed
ËNoticeable gap in the products available

Study the possible motives of the rural customer
Then figure out how to appeal to them
(USP, Price Quality Uses, Class, Culture etc
!" 
Bridge gap between the product and the target market.
** 
Advertise and Reach (Media)
  &
After STP (Segmentation, Targeting and Positioning)

!K&(
 !! 

| |

|
!|

@
  
Company starts Rural
Market first & then
ventures in Urban
Market
(eg Cavin Kare Chik &
Meera Shampoo)
 | 

&.  

3
Company starts Rural
| |
 Market after success in
Urban Market

|
(eg HLL, LG)

.  

Company starts Rural
Market after success in
Urban Market for long
(eg Cadbury)

| |
 
 * 




&&
 | |

|
!|

@

 Profile the Rural Market



Profile the Consumer
$
Market Behaviour & MR


Segmentation Targeting Positioning

.................................................................................
 Rural Product
A
 Rural Pricing

: 
Rural Distribution


Rural Sales Force Management


Rural Communication
.................................................................................

K Monitor the Rural Strategy


B 
"
Feedback & Control





 "+  

|

Developmental marketing is a process through which

  is created

>could be demonstration
>could be presentation
>Free samples
>could be through up eg tie up with Bank
tie up with Petrol/Diesel pumps
(Hyndai did with IOC and PNB and SBI subsidiaries
>30% sale of Hyndai from Rural/Semi Urban areas)

Awareness

Trial

Purchase

Post-Purchase Satisfaction

1 program  C 

Switch from Charcoal to Colgate tooth powder

3. Free samples of Lifebuoy

Cavin Kare ± Free sample of Chik Champoo

 &  ±   coconut oil

$þ
   

   




| |
| " 

| |
|

| |
"!| 

| |
!
!K |


 

| |
  

|  &

Product to be marketed with the requirements of the Rural Consumer

should not be an extension of urban offerings
(@   

@ 


 
!



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# $% 

K

(HLL, Dabur, Marico, Colgate=Palmolive

Coke, Pepsi)
Classification * " (
TV ,Fridge, Fan, Presssure Cooker,
Of Cycle, Two wheelers, Sewing machines,
watch, mixer grinder, radio, music system,
Rural Fans, Washing machines
(Philips, LG, Videocon, Onida )
Products
! 
Telecom, Banking, Health care ,Insurance
(Airtel, BSNL, SBI, PNB,Dena bank,)

 .
Seeds, pesticides, tractors
(Rallis India, Bayer,)

Maturity
Product
Life Take Off
Cycle Decline
(PLC)
Launch
 
|  &
ËEasy to Use
ËAfter sales support
ËConveniently packed- success of Sachets
ËProduct literature to be simple
ËHave a logo ± easy to identify eg Thums Up
| 
ËPackaging material ±plastics, poly packs, unbreakable materials
ËLooks - attractive colors (like all tea companies)
ËSize and convenience- small is beautiful

|  &

1. Brand Name
2 Create Brand Identity
3 Enhance Recognition
4 Build a Brand Image
5 Countering Spurious brands
Look alike
Spell alike
Duplicates

  &!  ! 

Soaps for Hygiene
Cooking gas for environment
Creating need by more awareness

Partnering with a long term perspective requires total belief and

Commitment - to the people, to the processes, to their own employee.
Need to work for a cause ± ITC, Hindustan Petroleum, HLL ,
Colgate Palmolive , Several Banks are a few such examples
| |
|

Pricing In Rural Market plays a key role in the success of a product

| |
|
 C+!

Ë Have a long run perspective

Idea is to penetrate first

Increase Volume
Make using the product a habit
Volumes to take care of the Margins
Keep eye on Competition Price

The following may help in addressing the issue

Low cost ±less amount (small packages- sachets)
Simple but colorful packaging ± eg. success of biscuits
Refill packs
Value engineering ± eg soya protein in place of milk protein

3 "! K|

1. Cost ±Plus Pricing = cost of product +distribution +profit

2. Value Pricing (VFM-Value for Money) High Benefit
3. Power Price ± eg Re 1, Rs 2, 3, 5,10
4. Penetration Price ± Introduce at low and hike price after success
5. Differential Pricing ±Different price for different market
6. Price Gap ± Comp prices ± range
 | |
"!| 

Physical Distribution Channel of Distribution

PHYSICAL DISTRIBUTION

Transportation

Warehousing Communication

   Railways, Roads ,Waterways, Animals

** ITC using internet, Mobile users by fisherman

ã   (Three Tier Rural Warehousing Set Up)

Central/State Warehousing
Cooperatives
Rural Godowns
ã3@3
! K"!| 

ËGeographical Spread
ËDealers are few ± hence required to bank on a number of resources
ËFinancial Viability
ËInadequate Bank and Credit Facilities
 
""|!!3
 +3

!
ËRely on Private Village Shops
ËSupply Chain Stores

ËRural Super Market

ËSmall companies tie up with large companies ± Leverage/Syndicate
Distribution network of Marico to sell Tide by P&G
ËSatellite Distribution

SD SD
R
D

SD SD
SD SD SD SD

Whole- SD
D Saler D
Town

SD SD
SD SD
SD SD

D D-dealer
SD- Sub Dealer
SD SD R-Retailer
 

K |!
!K |


 

SET THE PERSONAL SELLING OBJECTIVES

FORMULATE THE SALES POLICIES

STRUCTURE THE SALES FORCE

SIZE OF THE SALES FORCE

ASSIGNING SALES TARGETS

CREATING SALES FORCE- SELECT, RECRUIT, TRAIN

SALES FORCE COMPENSATION, MOTIVATION, SUPERVISION

SALES COMMUNICATION & REPORTING

SALES COORDINATION/SALES CONTROL

|
! K
| |
!
!|!

ËHardworking

ËHave Empathy

ËEnthusiastic Common to both

Urban & Rural Sales person
ËPerseverance

ËKnowledge

ËAttitude

ËSkills

Additional traits for making it Big in Rural Areas

ËWillingness to work in Rural Areas

ËAdopting to cultural differences

ËDown to earth approach

ËFluent in local language

ËDevelopmental approach ± Create not only Communicate

 ! 4&& !K 

ËThey are the face of the Organization ± the Ambassador

ËThey are the ones who have direct interaction with

The Potential Consumer/Customer

The Users
The Dealers
The Distributors
The Retailers

ËThey are a major link to the chain and establish the link

ËThey are the ones who help in building Trust

They need to break the rigid ideas and preconceived notions

 | |
  


Effective Communication goes a long way in establishing the right

Messages and thereby more interaction with Potential Customers
Communication, however, is not complete if there is no feedback
It is very important to re enforce messages in Rural areas

K 
| **

ËLiteracy level

ËMedia Habits

ËTraditional approach

ËHigh resistance ± more so initially

ËLavish at occasions (eg Marriage)

ËPurchasing power also depending on weather- the crops

ËInequitable distribution of wealth

ËToo many languages

ËCulture
 | |
"

Mass Media Traditional Media

(Conventional) (Non Conventional)

T.V /Cable network Puppet Shows

Satellite Channels
Folk Theatre/Opera
Radio
Demonstration
Print

Cinema/ Haats and Mela

Theatre
Wall painting
Word of
Mouth
Post card and posters
Video on
Wheels
Booklets/Calendar

&
&
>Excellent Reach >High involvement
ËLess expensive ,wider ËHigh Interest
coverage ËLocalized administered at low
cost
"&
ËAt times unnecessary Disadvantages
coverage ËCoverage
ËNo customized messages ËRepeat /Re enforcement
ËSkill of performer
* *&*
Levers, Onida, Videocon * *&*
Mahindra Tractors, Eveready Bajaj, Levers, HUL, ITC
You are the Marketing Director of A Company dealing
in Consumer Durables (TV, Fridge, Washing Machine
Music System, Microwave etc).
Your business has been growing steadily in the
Urban Market ± however, you are aware that the
Business will grow manifold if you also cater to the
Rural market. (Present growth rate has been 8%.
You are targeting a growth of 14%)
Present your case to the Managing Director and the
Board ± How you intend going achieving the desired
Objective ± with your plans for opening up the
Rural Market

Take into account the following

The Target Audience
The Product proposition
Distribution Strategies and Sales Forecast
Pricing Strategies
Promotional Strategies

How the above strategies will help in achieving the

Business Objectives.

While making the presentation ± you need to be clear on

1. Why you chose to launch the particular product
2. Why did you chose the particular location
(Opportunity Assessment)