Rural Marketing

Why marketing in Rural India (Facts)

 40 % of the World’s Market

 Every second person of the world lives in rural India
 Approx 70% Indian Population
 56% of Income
 64% of Expenditure
 33% of savings
 More than 6.30 lakh villages
Why marketing in Rural India (Facts)

“The future lies with those

companies who see the “poor” as
their customers”
Few More……………..

 Rural population has grown by 12% in last decade

 Rural market has distinguished characteristics,
accounts for 40% of Indian economy
 Rural India has huge, heterogeneous and growing
consumer market, which contributes more than 50%
to India’s total consumer market size
Evolution of Rural Marketing
 Phase 1 (Before 1960s): Agri product received
primary attention and inputs received secondary
 Phase 2 (1960-1990): Due to green revolution agri-
inputs gained attention and rural products like khadi
items received considerable attention
 Phase 3 (After 1990): Earlier due to non-existence
of market and accessibility problems, totally ignored
and gets attention after maturity, but due to LPG,
considerable growth was recorded
 Phase 4 (21st Century): Globalization, IT revolution,
over- congestion of market
Rural Marketing
“An entrepreneurial process of developing rural people
that involves assessing, stimulating and satisfying
demand for products and services through innovative
approaches with a concern for customer satisfaction
and corporate profitability”

“A process of managing all activities involved in

assessing, stimulating and converting the purchasing
power of rural consumers into an effective demand for
specific products and services and moving these to the
people in rural areas to create satisfaction and a better
standard of living
Rural Marketing

“Rural marketing is marketing to a

rural mindset not to a rural
market”
Rural Marketing Includes???

Intra Rural Urban to Rural

Rural to Urban Intra Urban

Rural Marketing Matrix
 Rural??

“A group of people who are traditional

in outlook, rooted to grass, and who
resist change”
 Rural Market??
 As per the census of India (2001): Rural which is not
urban. Urban defined;
 All locations within a municipality / corporation,
cantonment board or a notified town area committee.
 All locations that satisfy the following criteria:
I Minimum population of 5000
II At least 75% of the male workforce engaged
in non-agricultural activities
Iii A population density of over 400 persons
per sq. km
 Rural Market??

 Notuseful from marketing perspective

because:
A slum in the metro could have the attributes of a
rural market
Most of the towns are actually overgrown villages
 Rural Market??

 As per companies in the FMCG sector:

A place with a population of upto 20,000
 DurableGoods companies: Below 50,000
 RBI/NABARD: Up to 10,000
 Rural Market: Marketing Perspective

“ Any market that exists in an area with less

than 10,000 population, low density of
population and without significant
infrastructure facilities. Based on calculation
of MPV”
 Rural Market Classifications
A) Consumer Markets:
Constituents: Individuals & Households
Products: Consumables- food, toiletries
Durables: Watches, bicycles,
radios, TV
B) Industrial Markets:
Constituents: Agri & Alied Activities
Products: Consumables- Seeds, Pesticides
Durables: Tractors etc.
 Rural Market Classification
C) Services Markets:
Constituents: I/H, Offices, production firms
Services: Repairs, Transport, banking,
insurance, health care, and education
 Features of Rural Markets
 Population
 Occupation Patterns
 Scattered Market
 Rural Income
 Standard of Living
 Literacy level
 Land Distribution
 Land use patterns
 Features of Rural Markets
 Mass media
 Irrigation
 Urban Orientation
 Rural Credit
 Rural Marketing Concepts??
 Functional and Product Oriented Concept:
 Urban to Rural
 Rural to Urban
 Rural to Rural

 Socio-Economic Concept: Everything is low

“ Rural sales person is the carrier of
development message to the less informed
rural people rather than a mere order
taker”
 Factors Affecting Go Rural Decisions
 Urban push factors
 Rural pull factors
 Rural inhibiting factors
 Urban Push Factors

 SaturationStage
 Competition
 Changing Life Style
 Rural Pull Factors
 Risingaffordability
 Growing acceptance
 Increasing demand
 Improving accessibility
 Success stories of corporations
 Nature of Rural Marketing
 Elastic
 Developmental
 Innovation Driven
 Social Process
 Strategy-based
 Win-win process
 A discipline
 A growing profession
 Difference: Urban Vs Rural??

Difference Urban Rural

Philosophy Integrated and Inclusive Growth
Innovative
Relationship
Customers Style and Quality Value for money

Marketing Research Sophisticated Traditional

Segmentation Advanced Traditional

Targeting With relevant With or without

characteristics purchasing power
 Difference: Urban Vs Rural??

Difference Urban Rural

Marketing Goal Profit and Market Sustainable
Share Development
Development Limited CSR CSR
Strategy
Marketing Mix Four Ps 4 Ps with 4 As
 Rural Marketing Myths
 Rural India is wedded to agriculture only
 Rural markets are homogeneous
 Rural markets are urban market extensions
 Rural customers are illiterate
 Rural customers are poor
 Rural women consumers are powerless
 Rural consumers prefer cheap products
 One family, one brand
 Become a Rural Marketer??
 Motivation:
 Accepting the challenging assignment to prove
oneself
 Desire to take up a different job
 Staying in rural areas
 Serving the nation
 Helping the poor
 Expecting Acceptable reward
 Become a Rural Marketer??
 Knowledge:
 How to implement strategies
 Grass root knowledge
 Demographic and Geographic knowledge

 Skills:
 Socialskills
 Respect and humbleness
 Patience
 Courtesy and Concern
 Key features of Rural Markets??

 Wide variation in market potential

 Heterogeneity in rural markets
 Demographic segmentation
 Changing life style: Routine Change
 Need for exploring Rural Markets??
 Growing rural market
 Severe competition in major urban markets
 To change the attitude of rural farmers
 Rural Tourism
 Employment generation
 Population
 Brand Loyalty
 Media development
 Life cycle advantage
 Why Growth in Rural Maket?
 Favourable government policy
 Agricultural development
 Economic development
 Rising aspirations
 Media explosion
 Private Initiatives
 Opportunities?
 Growing prosperity
 Huge market
 Rising income
 Declining poverty
 Positive impact of government policies
 Literacy
 Strong influence of mass media
 TV penetration
 Minimal effect of global meltdown
 Challenges/ Inhibiting Factors?
 Uneven development
 Fragmented market
 Diversity in occupations
 Heterogeneity in life style
 Low-income streams
 Lack of steady & sustainable consumption
 Promotional agencies lack marketing skills
 Access difficulties
 Limited awareness and acceptance
 Low level of education
 Intensifying competition
Rural Marketing Model
 Rural Marketing Approaches/ Orientation

 Trickle-down Approach
 Undifferentiated Approach
 Differentiated Approach
 Bottom of the pyramid Marketing/ Approach
(BOP)
 3-I Approach (Integrated, Innovative, &
Inclusive)
 Trickle-down Approach
 Philosophy:
 Focus on urban areas
 Absolutely no need for designing marketing programme to
reach rural areas
 Assumptions:
 Rural market can be easily ignored; Top end rural market is
small in size and sales from this market only a bonus
 Top end urban society approximates the culture of West,
similarly, top end rural society culture comes close to the top
end urban one
 Rural households buy their products from the nearby feeder
towns either on special visit or when there is any work in
feeder towns
 Trickle-down Approach
 Suitability:
 Companies’ offering top end urban centric premium and
luxury products
 Do not have concern for rural people
 Rural Focus: Just for CSR
 Role of Marketing:
 Public relation and publicity
 Educating the target beneficiaries
 Corporate image building
 Undifferentiated Approach
 Philosophy:
 Rural market is growing
 Assumption of Trickle down inappropriate
 Minor modification in urban strategies would
serve the need
 Assumptions:
 Affordability:Top & middle income group are fewer,
affordability is lower due to large chunk of poor
 Accessibility: Poor infrastructure
 Acceptance: Same needs like counterparts
 Availability: Only few FMCGs, mainly agri products
 Undifferentiated Approach
 Suitability:
 FMCGs and CDCs offering products to middle and lower-end
market segments
 Rural Focus: Just for CSR
 Role of Marketing:
 Main focus on distribution, less on others
 Differentiated Approach
 Philosophy:
 Rural market is growing very fast
 Have large potential
 Separate marketing programme required
 Leverages on cause branding
 Assumptions:
 Affordability: Income substantially increase, stable
income due to non-farm occupations, Govt. Schemes
have boosted buying power
 Accessibility: Easily accessible
 Acceptance: Due to urban orientation
 Availability: many Indian firms and MNCs are
supplying
 Differentiated Approach
 Differentiators: Infrastructural constraints,
value conscious, price sensitive, value
relationship, adoptive, slow in processing

 Suitability:
 Considering rural market as heavy investment-low return
 Rural Focus: Market as well as rural
development
 Role of Marketing:
 Full fledge and separate field
 Bottom of the Pyramid Approach (BOP)
 Philosophy:
 Improvements in differentiated approach
 Integration of social entrepreneurship in
marketing

 Assumptions:
 Development is not CSR
 But; a business that benefits the co. and the poor
 Business can not succeed in a society that fails
 Win-win sustainable model is necessary
 Bottom of the Pyramid Approach (BOP)

 Why??
 New opportunities: the invisible BOP
 Demand innovation
 Bottom of the Pyramid Approach (BOP)
Tasks Outcomes Goal
Entrepreneurial Creating Buying
Inclusiveness Power

Shaping
Educative EMPOWERED
Aspirations
RURAL
CUSTOMERS
Tailoring Local
Innovative
Solution

Integrative Improving Access

 3-I Approach
 Integrated Marketing:Various means for
value delivery
 Innovative Marketing: marketing mix
 Inclusive Marketing: PPP model
 3-I Approach
 Integrated Marketing:Various means for
value delivery
 Innovative Marketing: marketing mix
 Inclusive Marketing: PPP model
 Rural Marketing Mix

 ACCEPTABILITY

 AFFORDABILITY

 AVAILABILITY

 AWARENESS