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UNIT: 1
RURAL MARKETING
Definition:-
Rural marketing can be defined as a function which manages all those activities in asserting,
stimulating and converting the purchasing power of rural people into an effective demand for
specific products and services and there by achieving the goals of the organisation.

Rural areas:-
Rural areas are large and isolated areas of an open country with low population density a
country side refers to rural areas that are open.

Q1. Explain the nature and scope of rural marketing?

Ans: Meaning of Rural marketing:-

Rural marketing is promotion of a company’s products in the rural markets by using

strategies which differ from that of urban market. The rural market more price sensitive but
it has preference quantity.

Nature of Rural market:-

1. Large, diverse and scattered market:-
Rural marketing in India is large, and scattered into a number of regions. There
may be less number of shops available to market products.
2. Major income of rural consumers is from agriculture:-
Rural prosperity is tied with agriculture prosperity. In the event of crop failure,
the incomes of masses is directly affected.
3. Traditional outlook:-
Villages develop slowly and have a traditional outlook. Change is a continuous
process but rural people accept change gradually. This is gradually changing due to
literacy especially in the youth who have begun to change the outlook in the villages.
4. Standard of living and rising disposable income of the rural customers:-
It is known that majority of the rural population lives below poverty line and has
low literacy rate, low savings etc. Today the rural customers spends money to get
value and is aware of the happening around him.
5. Rising literary levels:-
It is documented that approximately 45% of rural Indians are literate. Hence
awareness has increase and the formats are well informed about the world around
them. They are also educating themselves on the new technology for a better life
style.
6. Diverse socio economic background:-
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Due to differences in geographical areas and uneven land fertility, rural people have
different socio economic background, which ultimately affects the rural markets.
7. Infrastructure facilities:-
The infrastructure facilities like warehouses, communications systems and
financial facilities (or) inadequate in rural areas physical distribution is a challenge
to marketers who has found innovative ways to market their products.

Scope of marketing:-
1. Large population:-
According to 2011 census, rural population is 72% of total population and it is
scattered over a wide range of geographic area.
2. Rising rural prosperity:-
Average income level has unproved due to modern farming practices, contract
farming industrialisation, migration to urban areas etc.
3. Growth in consumption:-
There is a growth in purchasing power of rural consumers. The average per
capita house hold expenditure is 382 Rs
4. Change in life style:-
Life style of rural consumer changed considerably.
5. Market growth rate higher than urban:-
The growth rate of fast moving consumer goods [FMCG] market and durable
market is high in rural areas. The rural market share is more than 50% for products
like cooking oil, hair oil etc.
6. Life cycle advantage:-
The products which have attain the maturity stage in urban market is still in
growth stage in rural market.
7. Rural marketing is not expensive:-
To promote consumer durable inside a state costs 1 croreRs while in urban areas
it will costs in millions.

Q2. What is rural market? Importance of rural marketing ?

Ans:Meaning of rural market:-

On account of green revolution, the rural areas are consuming a large quality of
industrial and urban manufactured products. In this context a special marketing strategy
namely rural marketing has emerged. But often rural marketing is confused with
agricultural marketing – The letter denotes marketing of produce of rural areas to the urban
consumers or industrial consumers, were as rural marketing involves delivering
manufactured or processed inputs or services to rural producers of consumers.

Importance of rural market:-

1. Large market:-
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Approximately 75% of Indian’s population resides around 6,38,365 villages of

India spread over 32,00,000 Sq. kilometre 41% of Indian’s middle class resides in
rural areas. The Indian rural consumer leaves in 6,00,000 villages across the country
and they account for over 70% of population of the country. For several product
categories, rural markets account for over 60% of the national demand.
2. Higher purchasing capacity:-
According to “NCAER”[National Council for Applied Economic Research]. As
per NCAER study there are many middle income and above households in the rural
areas. As there are in the urban areas there are almost twice as many lower middle
income households in rural areas as in the urban areas. Because of this purchasing
power of power of rural people is on rise.
3. Market growth:-
“Hariyali kissan bajar” was set up by sri ram consolidated limited to facilitates
scale of agriculture inputs such as fertilizers, pesticides forming equipment, seeds
etc. Shakti- though the state governments and NGO’S involved in microfinance
women entrepreneurs in villages are identified to act as local distribution and sales
point for HUL products.
4. ITC:-
Itc’s internet enabled rural interface to help scale of agricultural outputs is presently
operational in 6 states market is growing at a rate of 3-4% p.a.

Q3. Define size of rural market and discuss?

Ans: According to the census of India village with clear surveyed boundaries not having a
municipality, corporation or board, with density of population not more than 400 Sq.km and
with at least 75% of the male working population engaged in agriculture activities would
quality as rural.

According to this definition there are 6,38,000 villages in the country of these 0.5% has
a population about 10,000 and 2% have population between 5,000 and 10,000 around 50%
has a population less than 200.
Interestingly, the FMCG and consumer durable companies, any territory that has more than
20,000 &50,000 population respectively in rural market so for them it is not rural India
which is rural.
According to the census of India 2001, there are more than 4000 towns in the country. It
has classified them into 6 categories around 400 class-I to towns with 1,00,000 and above
population, 498 class-II towns with 50,000-99,999 population, 1368 class-III towns with
20,000-50,000 population, 1560 class –IV towns with 10,000-19,999 population
It is mainly the class-II & class-III towns that markets term as rural.
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Demographical details of Indian rural market

• About 285 millions live in urban India where as 742 millions reside in rural areas.
• The No. of middle income & high income households in rural India is expected to
grow from 46 millions to 59 millions.
• Size of rural market is estimated to be 42 millions household and rural market has
been going at 5 times the growth of the urban market.
• More government, rural development programs.
• Increase in agricultural productivity leading to growth of rural disposable income.
• Lowering of difference between taste of urban and rural customers.

The Indian rural market with its vast size and demand offers great opportunity to marketers.
Our national is classified in around 450 districts & approx. 6, 30,000 village which can be
stored in different parameters such as literacy level, accessibility income levels, distance
from nearest town etc.
The rural market accounts for half of the total market for Tv sets, fans pressure cooker’s,
bicycle’s, washing soap, tea salt & tooth powder, what is more, the rural market for FMCG
product is growing much faster than the urban market.

Q4. Explain the distinction between rural market & urban market?

Ans: Definition:-
Rural marketing is similar as simply marketing. Rural marketing differs only in terms of
buyers here, target market consists of customers living in rural areas.Thus rural marketing is
application of marketing fundamentals {concepts, principles, theories etc} to rural marketers.

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

specific goods and services leading to desired exchange with rural customers to satisfy their
needs and wants, and also to achieve organisational objectives.

Differences between rural marketing & urban marketing:-

Although rural marketing offer immense potential marketers used to recognise the fact
that there are considerable differences in many aspects including the nature, characteristics,
buying patterns & behaviours of rural consumer when compared with their urban counter
parts.
While the urban economy thrives mainly on secondary and territory activities such as
manufacturing &service, the rural economy is driven mainly by primary activities such as
agriculture, fishing & forestry.
The consumer demand and consumption patterns also differ across rural and urban areas,
in many products rural consumption now accounts for a large share then urban. In in
washing soaps the rural share is over 60%. In popular both soaps it is more than 50% and in
batteries it is more than 56% similarly is the case with packed tea & hair oil’s
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Aspect Urban Rural

Philosophy Marketing &social concepts Marketing & social concepts development

& relationship market marketing

Demand High Low

Competition Among units in organized Among unorganised sector

sector

Consumers:‐
Location Concentrated Widely spread
Literacy High Low
Income High Low
Expenditure Planned &even Seasonal &variations
Needs High level Low level
Innovations Faster Slow
Product awareness High Low

Concept Known Less known

Positioning Easy Difficult

Usage method Easy grasped Difficult to grasp

Quality preference Good Moderate

Price sensitive Yes Very much in rural

Distribution channels Whole seller, retailers, Village shops

supermarkets, speciality
stores, authorised store
rooms
Transport facility Good Moderate

Product availability High Limited

Advertising Print, audio, visual media, T.v, radio, print media to some extent
outdoors, exhibitions etc

Personal selling Door‐to‐door Occasionally

Sales promotion Contest, gifts, price discount Gifts & price discount

Publicity Good opportunity Less opportunity

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Q5. What are the problems of rural marketing?

Ans: The problems of rural marketing are continuing in spite of efforts to improve in a 9 th five
year plan. The position is improving but slowly the rural marketer has many challenges. But the
vast & expanding markets call for good marketing strangers to create win situations to all
parties in the chain of rural marketing.

The problems of rural marketing are as follows:-

¾ Under developed people

¾ Under developed market
¾ Improper communication facilities
¾ Many languages
¾ Vastness & uneven spread
¾ Low per capita income
¾ Poor infrastructure facilities
¾ Seasonal demand
¾ Less distribution channel

1. Under developed people:-

Rural society is found by tradition, old customs, practices etc. The impact of
modern science & technology has made very less impact of the old beliefs are still
continuing.
2. Under developed market:-
Rural markets are not developing because of inadequate banking & credit
facilities. Rural market needs banks to enable remittance, to transact on credit basis
th
and to obtained credit support from the bank. At present every 48 village in India
only has bank.
3. Poor or improper communication facilities:-
Most villages even today largely depends on telegrams and phones for their
communication needs print media and visual media[Television cinema] etc reaches
only about 20% of rural Indians.
4. Many languages:-
India is a country of many languages. Language becomes a barrier in effective
communication in the marketing efforts. The languages vary from state to state,
place to place, district to district there are now 18 schedule national languages.
5. Vastness & unevenly spread:-
India is a vast time & major approximately 3214km from North to South
&2933km from East to West.
Rural market consists of approximately 75 cores rural consumers spread across
approximately 6,38,365 villages. Despite the urban migration, the rural areas
continue to be the place of living for a vast majority Indians.
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6. Low per capital income:-

Most farmers has small lands and many villages are brought prone, this result in
low per capita income.
Low per capita incomeResults in low consumption pattern as compared to the
urban population.
The marketers faces challenges in rural marketing to decide about quantities,
frequency of distributions, package size etc… due to the low per capita income of
the rural people.
7. Poor infrastructure facilities:-
Infrastructural facilities like roads, ware houses, powers etc… are inadequate in
rural areas. Infrastructural cost are very high and impact adversely in the rural
market activities.
8. Seasonal demand:-
Rural economic is seasonal, rural people have two seasonal namely khariff&rabi.
Villages have money mostly in this seasons. As village income are seasonal
demands are also.
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UNIT: 2
RURAL MARKETING ENVIRONMENT
Q1. Discuss about the rural marketing environment?

Ans:- An environment is that which surrounds an organization. It was sum total of external
factors and made up of tangible and intangible factors /both controllable and uncontrollable.
Rural marketing is basically focused marketing activity of a organization. The environment
out lines threats and opportunities of the market.
The Rural marketing environment is complex and is changing continuously.
The marketing organization should foresee and adopt strategies to change in requirements in the
market. One which doesn’t change perishes. An adaptive organization can stand competition or
have a modest growth. An organization which makes its effective marketing plans and its own
strategies or a creative one will prosper and creates opportunities in the change in environment.
Rural marketing environment changes will be in the area of

a) Social changes
b) Economic changes
c) Ethical changes
d) Political changes
e) Physical changes
f) Technological changes

SOCIAL ECONOMIC
Psychological
Sociological factors Factors
Price
Competition

Product & Packaging

Anthropological Consumer
Factors
Marketing
Price Promotion
Organisation

Technological Ethical
Place

Physical Political
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1.SOCIAL CHANGES:- The social factor consists of three factors,

1) Sociological factor:-
Consumer society or the community is important. The
consumer life style is influenced by the social setup. The social constitution and
changes influence customer habits, taste, and lifestyles.
2) Anthropological factors:-
The reasonable cultures and subcultures and living patterns
influence advertising sales promotion, selling strategies and packing. The consumers
in east India have different taste.

3) Psychological factors:-
Consumer behavior attitudes personality and mental make
ups are unique. The study of behavior is vital to evolve marketing mix.
2. Economic factors:-

1) Competition:-
A good and healthy competition brings in good and overall
improvement in economic activities. It also brings good quality, good quantity and
price.
2) Consumers:-
The consumer today is quite knowledgeable and choosy. His
progress and well being should be the aim of any economic activity.
3) Price:-
Pricing is a delicate issue where it should be market friendly, not
too high or to little. The marketers has to keep in mind to get descent returns on
investment and effects of producers and marketers.
4) Ethical forces:-
Business minus ethical values brings degeneration. In the long run
it brings problems. No standardization, exploitation and falsification are main
ethical values in such organization.
5) Political forces:-
The government polices towards trade and commerce, internal
taxation and preferential treatments have a influence on the marketing strategies.
The marketing environment has to meet the political frame work in which a
government is made to work.
6) Physical forces:-
The infrastructure availability for movement and storage of goods
play an important role in the physical distribution of goods and reaching the
consumers. Efficient and cheaper logistics helps the market in a big way.
7) Technological force:-
The fast changing science and technology gives a cutting edge to the
marketing of products. The changes warrant changes in marketing , inputs and
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strategies. Faster and efficient communication and transport systems have speeded
up marketer. The capital is made to work faster and harder .So in the case with the
marketer, He has to use these new marketing tools and facilities in designing and
implementing his marketing strategies which are adaptive to the change in
environment and ensure success.

Q2) what are the factors influencing rural consumer behavior?

ANS:- The various factors that affect buying behaviour of in rural India are:

1) Environment of the consumer:- the environment or the surroundings in which the

consumer leaves has a very strong influence on the buyer behavior. E.g.:-
electrification, water supply effects demand for durables.

2) Geographic influence:- the geographic location in which the rural consumer is located
also speaks about the thought process of the consumer. For instance, villages in south
India accept technology quicker than in other parts of india.Thus, HMT sells more
winding watches in the north while they sell more quartz watches in the south.

3) Influence of occupation:- The land owners and service can buy more of category2
& category3 durables than agricultural laborers.

4) Place of purchase:- Company’s need to access the influence of retailer on both

consumers at village shops.

5) Creative use of product:- The study of product and provides indicators to the
company on the need for education and also for new product ideas.
E.g.:- godrej hair dye being used as a pain to the color horns of ox. Washing
machine being used for making lassie.
6) Brand preference and loyalty:- the people in rural market will not give preference
for brand products but they give importance for loyalty of the product. 80% of the sale is
branded items in 16 product category.
Q3) what are the factors influencing Rural marketing operations?

ANS: - All business operations revolve around understanding customer needs, desires likes
and preference and offering products and services that will give desired satisfaction to the
consumers.
FACTORS INFLUENCING OR CONTRIBUTING CONSUMER BEHAVIOUR:-

a) Environmental
b) Cultural
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c) Social
d) Personal
e) Psychological

a) Environmental :-
I. Economic factors:-
The agricultural and rural development has enabled our
country to achieve self sufficiency in food production and we are now
exporting a variety of agricultural commodities to foreign countries.
Favorable monsoons during the last 10 years have let to increase in crop
yields and rural income. In addition, diversification of a agriculture,
development of village industries, migration of rural people into cities,
remittance of money, family members settled abroad have increased income
level and buying power of villagers.
II. Political factors:-
The government have taken initiative for economic
development of rural areas and have invested heavily in agriculture,
irrigation, electricity, khadi and village industries and infra structure facilities
such as roads, communication, hospitals, school, and banking. The initiatives
certainly let to rural prosperity and opportunities for the marketers.

III. Technological development:-

The rapid expansion of telecommunication facilities and mobile
phone has provided opportunities for rural people to keep in touch with men
and markets. Development of TV networks and reasonable channels has
enabled the marketers to pass on message about product and services to rural
people. In rural areas especially in large villagers and villagers near to towns
and cities, children and youth have accused to information such as job
opportunities, national news, weather conditions, bank loans etc..IT and
internet are sure to spread up exchange of information in rural india though
at a slower rate compare to urban market
IV. Legal :-
The government has come out with legislative measures to protect
the interest of consumers some of the important ones are:-
a. Money lenders:-
The money lenders advance long term loans against security of
land over period of time manipulate the records and seize the land. The government
protects the assets of farmers from money lenders.
b. Consumer protection act:-
Consumer protection act provides protecting the rights and
interest of consumers and we have a quasi judicial machinery operating at 3 levels
i.e. district forum, state and national forum.
V. Cultural factors:-
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a) Culture and sub culture :-

Culture represents an overall heritage a distinctive form
of environmental adaption by whole society of people culture is a system of
shared beliefs and customs that influence the behavior of consumers.
Traditional life, traditional occupation, traditional beliefs are the features of
rural life.
Culture provides people with a sense of identity and an
acceptable behavior with in a society. Technological advances education and
travel have considerable influence on culture and change the rural life style.
Culture offers direction and guidance to the members of a society in all
facets of life. It provides methods of satisfying physiological, personal and
social needs.

b) Sub culture:-
It exists within the dominant culture, with its own set of
values, beliefs and attitudes and behavior pattern. The pattern of behavior
would vary between north and south even in rural areas.

c) Social class:-
Consumer behavior is determine by social class to which
they belong and is determine by a combination of factors like education,
occupation, income and assets. It is seen that over a period of 10years there
has been considerable reduction in the per culture of destitute and increase in
other social classes in rural areas. This is a positive indication of the growing
rural market in our country.
VI. Social factors:-a)
Family:-
Family is a group of persons related by blood, marriage or
adoption who reside together. It is basic social group and consists of
rd
individual known as members. The 3 generation family is very common in
rural areas. The head of the family provides economic security to family
members. The members of family play different roles such as influencer
decider and purchaser is the buying process. Personal values, attitudes and
buying habits have been shaped by family influences. Family life cycle also
influences.
b) Reference group:-
It includes family and friends with whom an individual
interacts on a face to face basis. Word of mouth communication is a process
by which the messages are passed within group from one member to another
member. The consumer develops positive opinion towards a product or
service based on admiration (cricket players), aspiration (film stars) or
empathy. The consumer thinks that if he uses it, it must be good if use it, I
will be like him.
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VII. Personal factors:-a)

Age and life cycle:-
Life cycle of a person began with child birth, move to infancy,
teenage, adult, middle age, old, and then ends with death. Under each stage
buying behavior is different.
b) Occupation:-
About 500 millions of population depends upon agriculture for a
living. Income from agriculture is a seasonal and therefore demand
particularly consumer durables is high during post harvested period and
festivals. Many farmers have diversified into fish culture and small scale
industries in order to reduce their dependence on forming and to ensure
regular income. This leads to increase the demand for consumer durables.
c) Economic circumstance:--
Rural income is seasonal compare to an urban consumer who
receives regular income regarding saving habits, traditionally rural people
prefer to invest in jewelry and fixed deposits in banks and posts offices. A
farmer would like to invest these funds for development of agriculture and
buying lands. Another interesting observation is that for the same income
level, a rural consumer has relatively high disposable income.
d) Life style:-
Life style studies how people spend their money and time in day
to day activities. The life style dimensions are activities and demographic
features such as age, gender, occupation, education, and income. Rural
consumes prefer to spend, spare time, in activities. Such as visiting meals i.e.
commodity and religious fairs, company’s can use such meeting places for
product promotion.
e) Personality and self concept:-
Personality is a unique combination of different individual
characteristics. We find that many individuals are similar in terms of one or
more characteristics, but they are not alike in all characteristics. Personality
is a combination of factors such as
sociability, self confidence and dominance. Personality influences in many
ways.
VIII. Psychological factors:-a)
Motivation:-
When a buyer purchases a product or service, he has a reason.
Motive is a strong felling, desire or emotion that makes the buyer to take
decision to buy every human activity is a result of motivation. Each person
is motivated by his needs and satisfaction of one need shows that rural
consumers are satisfied by meeting the 2needs i.e. physical and security
need, where as urban consumers would like to satisfy social and needs .
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Motives can be also classified as psychological and psychogenic motives. In

rural areas there exits large population consisting of agricultural laborer,
small and marginal farmers, petty traders who have very limited income and
their needs are very basic i.e. food clothing and shelter.
b) Perception:-
All consumers are not alike; they see the world in their own
special ways. For instance, all the members of the family have viewed a
particular advertisement in different ways. This is because needs, wants,
values attitudes and personal experience vary from person to person.
Similarly, consumer’s perception means what he thinks about the product,
producer or the brand. Consumer’s action, buying habits, consumption
habits are based on perception and therefore the motor should have good
understanding of perception of consumers.
c) Learning:-
It is a process of acquiring knowledge about products, product
benefits, method of usage and maintenance and also disposal of the products
considering low literacy, low awareness, the marketers have to educate the
consumers through rural- specific promotion media and methods.
d) Belies and attitudes:-
In general attitude is a state of mind or feeling. Attitude
indicates our feeling about a product, service, brand and shop whether we
are positively or negatively disposed towards the object or class of objects.
Consumer attitudes or composed of beliefs, feelings and behavior intentions
towards a product, brand or store.
Belief may be positive, negative or neutral. The belief that
consumer hold need not be correct. Consumers also hold certain feelings
towards product and these feelings are based on the beliefs.
Examples:-
1) Many rural consumers belief that cool drinks are harmful and they prefer lime
juice, butter milk etc.. Change of attitudes and beliefs is very low in the case of rural
consumers. Once he is convinced, he will continue to use the product and become a
loyal consumer.
2) Majority of lower and middle income group continue to use lifeboy and soap and
about 70% of the sales of the life boy is in rural and semi urban areas.

UNIT – 3, 4 AND 5 – COMING SOON

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RURAL MARKET SEGMENTATION

Market segmentation means dividing heterogeneous market into homogeneous sub units
into homogenous sub units here heterogeneous means consider the market as a whole and
refers mass marketing. Homogeneous sub units means which have similar tastes and
preferences but not the same tastes and preferences.
Rural market segmentation is mainly based on demographic factors. The division is
based on the premises the different people have different preferences. The following are the
basic market preferences:-
¾ Homogeneous preferences where consumers have roughly the same preferences.
¾ Diffused preferences where consumers are scattered throughout the market by their
preferences.
¾ Clustered preferences were consumers are found in distinct preference groups.

Degree of segmentation:-
The segmentation is considered as a process with two polar points from zero to
complete, four distinct segment approaches are identifiable as follows

o.s Zero
Type Mass marketing Segment Niche Micro marketing
marketing marketing
Approach Considers all Identity’s people Serves very few Focus on
people as a differing groups of individuals
as a bunch group people are very small
groups

Mass marketing:-
th
In the early period of the 20 century many companies practiced mass production and
mass distribution as economics evolved as economy evolved and societies became
civilised, consumer choice and requirements came into focus until now the rural market
was considered as homogeneous mass as worse the Indian market till some 20 years ago.
Some companies depend on mass marketing while many do not.

Segment marketing:-
The principle of segment marketing rests on the realisation that buyer’s differ in their
needs, wants, demands and behaviours. The need for segment marketing arises when
ƒ Consumer’s have become more diverse, sophistically and choosy.
ƒ Competition has become tuff.
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Niche marketing:-
A niche is very small group with a different set of traits, who seek a special combination of
benefits. Niche marketing identifies special sub groups within larger segments and offers
different products and services.

Micro marketing:-
Micro marketing involves tailoring products and programs to suet the taste of specific
locations and individuals. It includes local marketing and individual marketing.
ƒ Local marketing:- It involves in the programs to suit the taste of specific locations
and wants of local group’s on a geographical bases.
ƒ Individual marketing:- Individual market is customized marketing or one to one
marketing. Tailoring unitshotels, tourist operators provide individualised services
for example building contractors builds houses of flats to specific requirements of
customers.

Types of rural market segmentation:-

Demographic factors:-
Demographic factors are taken into detailed consideration for market segmentation of
consumer goods and fast moving consumer goods (FMCG). In case of rural marketing i.e.
to sell outside goods in rural areas, demography came into the picture. However the
categories are much reduced. Some of the segmentations are as below.

Occupational segmentation(or)sociological segmentation:-

This segmentation is based on economy vice categorisation. This reflects the purchasing
power of a farmer and therefore the purchase power of his family they are
¾ Artisans, farm labourers
¾ Small farmers
¾ Tenant farmers
¾ Medium level farmers
¾ Large farmers
¾ Very large farmers, zamindars

Artisans and others

This covers carpenters, blacksmiths, handy-crafts, people are unemployed.

Tenant farmers
Working on rented land to share the crops with owners of the land.
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Small farmers
Who own small farms are jointly owned farms for getting food.

Medium level farmers

Who own small farms are jointly owned farms for getting food.

Large farmers(or)rich farmers

Who have large lands and all local leaders they spend types in urban areas and doing
other occupation.

Very large farmers, land lords(or)zamindars

Zamindars, rich money lenders and business men who owned big size lands and maintain
large size farm labour. Normally they spend time in nearby urban areas with politicians.
From the above the small farmers and tenant farmers will struggle for basic needs but
the medium level farmers struggle for comforts. But the large farmers will not struggle for
basic needs and comforts.
So the marketers target only large farmers and very large farmers for segmenting the
market.

Thomson rural market index(TRMI)segmentation

Hindustan Thomson associates ltd developed a guide to market segmentation in 1972
and revised it in 1986. They collected data in 335 districts based on 26 variables finally
they arrived on 10 selected variables having strong co-relation to rural market potential.

¾ Agricultural labourers
¾ Gross cropped area
¾ Gross irrigated area
¾ Area under non-food crops
¾ pump sets.

Fertilisers consumption

¾ Tractors
¾ Rural credit
¾ Rural deposits
¾ & village electrified.

Based on these factors, the districts are classified as A,B,C,D&E. Which are in order
of high potential market to low potential market.
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LINQUEST
This method is software developed by initiative media on data along the
following parameters
¾ Demographic
¾ Agriculture
¾ Income.
¾ Literacy &
¾ Civic amends.

As per the product to be launched, the marketer would be interested in certain

parameters like literacy levels, income levels, bank deposits, accessibility (rail, road, and
schools etc). in the software the marketer can give weighted average to different factors for
Eg:- To launch new audio cassette recorders, parameters could be villages above 1000
population and monthly income 2000 and distance from nearest towns within 30kms.
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BRANDING:-
Branding is a practise of giving specified name the specified name creates individuality
in the product and it can be easily recognised from rival product the term brand is broadly
applied to all identifying such as trade names, trademarks trade symbols etc… e.g.:- pepsi,
lifeboy are brand names it is recognisable by sight but he’s not normally pronounceable.
The rural consumer likes to stick to brands that give value for money

Importance of branding
1. Branded product can be easily recognised by the customer in the retail shop it offers
protection to the consumer as it identifies the firm behind the product.
2. Branding enables the firm assured control over market. It creates an exclusive
market for the product.
3. If a firm has one or more lines of branded goods it can had a new item to its list
easily & the new item can enjoy all the advantages of branding immediately.

Characteristic of branding

Attributes &benefits:-
Brands of a product plays an important role to attract the rural customers because they
mostly believe in the brands, just by seeing branded products they will purchase assuming
that they will be satisfied by product.

Values :-
By seeing the brand the customers will consider the performance of the product and the
safety of the product some customers felt that prestige while purchasing the branded
products.

Culture:-
By seeing the brand the customer assumes the product is efficient and they also assumes
high quality.

Personality:-
The person who is using that product
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 20

Types of brands

1. Individual brand name

Each product has a special and unique brand name the manufacturer has to
promote each individual brand in the market separately this creates a practical
difficulty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chik
shampoo etc….
2. Family brand name
Family name is limited to one line of a product i.e. products which complete
same cycles family brand name can help combined advertising and sales promotion
however if one member of the family brand is rejected by the consumers or
customers the prestige of all under the family brand may be adversely affected. The
manufacturers have to take extraordinary care to guard against the danger family
brand name enables creation of strong shelf. It helps to secure quick popularity it is
preferable to have separate brands for each product for eg:-amul for milk products,
pounds for cosmetics etc…
3. Umbrella brand name
We may all products such as chemicals, engineering goods, automobiles etc.
Manufactured by the Tata concerns will have the Tata as one umbrella brand such a
device will also obtain low promotion cost and minimise however experience in any
of the line of products, a solitary failure may be very dangerous to the rest of the
products sold by a particular business house under umbrella brand.
4. Combination device
Data house is using combination device each product has individual name to
indicate the business house producing the product eg:- Tata Indica, side by side
with the product image we have the image of the organisation also many companies
use this device profitably.
5. Private or middleman’s brand
Branding can be done by manufacturers or distributors such as wholesalers, large
retailers. In India this practise is popular in the wooden, sport goods and searches
other industries it helps small manufacturers who have to rely on the middlemen for
marketing. It is also used by big manufacturers the manufacturer merely produce
goods as per specifications and requirements of distributors and he need not worry
about marketing. Manufacturers make both national and private or middleman
brands. Consumers of the private or dealers brand.
http://www.miteshk.webs.com
 21

Some of the brand names that have created lasting impact on rural consumers are as
follows:‐

¾ Every day batteries:‐ Battery with cat as a symbol

¾ Lifeboy
¾ Asian paints mascot
¾ Dabur chawan prakash
¾ Parle
¾ Parachute
¾ Amul
¾ Zandubalm
¾ Tata salt
¾ Nirma
¾ Textile:‐ Chermas, Kumar shirts.

Q. Explain the brand awareness in rural marketing?

Ans: Rural product development:‐

The rural market is a fast growing one and has a huge

population with a great level of disposable income to encase this; products have to be
specifically developed to meet the creeds of rural market sometimes existing products
might have to be modified to suit these markets too accordingly.

Rural product development has a strong edifice on a great

deal of research like feasibility, studies, rural aspiration and soon. This paves way for a
great deal of infra structure and expertise in this area.

Rural branding:‐ Rural branding bears quit different from urban branding. The first step
towards rural branding is to search and gain insight into the working of rural markets. Based
on this communication campaigns products have to be developed with a lot of rural sensitivity.

Rural market research:‐ rural market behave most differently from urban markets. While
many marketers have tried to market their products in rural areas. Just a hand full of sum
only has succeeded. A strong insight into rural consumer behaviour and sensitivity to their
values and beliefs is essential to upgrade the rural market research not just gathering data
but analyzing them and linking the findings to promoting their products. Rural
communication campaigns communication for rural markets calls for a different kind of
outlook. There must be a strong ascent on helping the target relate to message. The entire
communication and media strategy has to device a system based on research findings.
These have to be developed in the regional languages and set in the local culture for
easier acceptance and reach to the customers. Besides mass and outdoor media rural
http://www.miteshk.webs.com
 22

extravaganza (cultures) like temple, festival, melas, and other events where the villagers
come together can be used for promotions.

Rural events: ‐ In the rural context, one of the best ways to capture the attention of the
audience is through event management. Since rural areas have limited venues for
entertainment, conducting an event in rural areas can bring a good response..

Rural direct marketing campaigns: ‐ Direct marketing is one of the most powerful ways
to meet the targets and build product awareness as well as promotion. The success of any
direct marketing campaigns depends on the field workers and their sensitivity and emotional
connectivity to rural markets.

Data base creation and management:‐ Marketing branding and promotional activities
in rural context can be highly effective and thereafter have to create a database of prospects.
This data is essential for marketers to reach their target accurately and helps marketing plan
and communication strategies.
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 23

RURAL MARKET SEGMENTATION

Market segmentation means dividing heterogeneous market into homogeneous sub units into
homogenous sub units here heterogeneous means consider the market as a whole and refers
mass marketing. Homogeneous sub units means which have similar tastes and preferences
but not the same tastes and preferences.

Rural market segmentation is mainly based on demographic factors. The division is based
on the premises the different people have different preferences. The following are the basic
market preferences:-

¬ Homogeneous preferences where consumers have roughly the same preferences.

¬ Diffused preferences where consumers are scattered throughout the market by their
preferences.
¬ Clustered preferences were consumers are found in distinct preference groups.

Degree of segmentation:-
The segmentation is considered as a process with two polar points from zero to complete,
four distinct segment approaches are identifiable as follows

o.s Zero
Type Mass marketing Segment Niche Micro marketing
marketing marketing
Approach Considers all Identity’s people Serves very few Focus on
people as a differing groups of individuals
as a bunch group people are very small
groups

Mass marketing:-
th
In the early period of the 20 century many companies practiced mass production and
mass distribution as economics evolved as economy evolved and societies became civilised,
consumer choice and requirements came into focus until now the rural market was considered
as homogeneous mass as worse the Indian market till some 20 years ago. Some companies
depend on mass marketing while many do not.

Segment marketing:-
The principle of segment marketing rests on the realisation that buyer’s differ in their
needs, wants, demands and behaviours. The need for segment marketing arises when

♣ Consumer’s have become more diverse, sophistically and choosy.

♣ Competition has become tuff.

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 24

Niche marketing:-
A niche is very small group with a different set of traits, who seek a special combination of
benefits. Niche marketing identifies special sub groups within larger segments and offers
different products and services.

Micro marketing:-
Micro marketing involves tailoring products and programs to suet the taste of specific
locations and individuals. It includes local marketing and individual marketing.

♣ Local marketing:- It involves in the programs to suit the taste of specific locations and
wants of local group’s on a geographical bases.
♣ Individual marketing:- Individual market is customized marketing or one to one
marketing. Tailoring unitshotels, tourist operators provide individualised services for
example building contractors builds houses of flats to specific requirements of
customers.

Types of rural market segmentation:-

Demographic factors:-
Demographic factors are taken into detailed consideration for market segmentation of
consumer goods and fast moving consumer goods (FMCG). In case of rural marketing i.e. to
sell outside goods in rural areas, demography came into the picture. However the categories
are much reduced. Some of the segmentations are as below.

Occupational segmentation(or)sociological segmentation:-

This segmentation is based on economy vice categorisation. This reflects the purchasing
power of a farmer and therefore the purchase power of his family they are

¬ Artisans, farm labourers

¬ Small farmers
¬ Tenant farmers
¬ Medium level farmers
¬ Large farmers
¬ Very large farmers, zamindars

Artisans and others

This covers carpenters, blacksmiths, handy-crafts, people are unemployed.

Tenant farmers
Working on rented land to share the crops with owners of the land.

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 25

Small farmers
Who own small farms are jointly owned farms for getting food.

Medium level farmers

Who own small farms are jointly owned farms for getting food.

Large farmers(or)rich farmers

Who have large lands and all local leaders they spend types in urban areas and doing other
occupation.

Very large farmers, land lords(or)zamindars

Zamindars, rich money lenders and business men who owned big size lands and maintain
large size farm labour. Normally they spend time in nearby urban areas with politicians.

From the above the small farmers and tenant farmers will struggle for basic needs but the
medium level farmers struggle for comforts. But the large farmers will not struggle for basic
needs and comforts.

So the marketers target only large farmers and very large farmers for segmenting the
market.

Thomson rural market index(TRMI)segmentation

Hindustan Thomson associates ltd developed a guide to market segmentation in 1972 and
revised it in 1986. They collected data in 335 districts based on 26 variables finally they
arrived on 10 selected variables having strong co-relation to rural market potential.

¬ Agricultural labourers
¬ Gross cropped area
¬ Gross irrigated area
¬ Area under non-food crops
¬ pump sets.

Fertilisers consumption

¬ Tractors
¬ Rural credit
¬ Rural deposits
¬ & village electrified.

Based on these factors, the districts are classified as A,B,C,D&E. Which are in order
of high potential market to low potential market.

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 26

LINQUEST
This method is software developed by initiative media on data along the following
parameters

¬ Demographic
¬ Agriculture
¬ Income.
¬ Literacy &
¬ Civic amends.

As per the product to be launched, the marketer would be interested in certain parameters
like literacy levels, income levels, bank deposits, accessibility (rail, road, and schools etc). in
the software the marketer can give weighted average to different factors for Eg:- To launch
new audio cassette recorders, parameters could be villages above 1000 population and
monthly income 2000 and distance from nearest towns within 30kms.

BRANDING:-

Branding is a practise of giving specified name the specified name creates individuality in
the product and it can be easily recognised from rival product the term brand is broadly
applied to all identifying such as trade names, trademarks trade symbols etc… e.g.:- pepsi,
lifeboy are brand names it is recognisable by sight but he’s not normally pronounceable.

The rural consumer likes to stick to brands that give value for money

Importance of branding
1. Branded product can be easily recognised by the customer in the retail shop it offers
protection to the consumer as it identifies the firm behind the product.
2. Branding enables the firm assured control over market. It creates an exclusive market
for the product.
3. If a firm has one or more lines of branded goods it can had a new item to its list easily
& the new item can enjoy all the advantages of branding immediately.

Characteristic of branding

Attributes &benefits:-
Brands of a product plays an important role to attract the rural customers because they
mostly believe in the brands, just by seeing branded products they will purchase assuming
that they will be satisfied by product.

Values :-

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 27

By seeing the brand the customers will consider the performance of the product and the
safety of the product some customers felt that prestige while purchasing the branded
products.

Culture:-
By seeing the brand the customer assumes the product is efficient and they also assumes
high quality.

Personality:-
The person who is using that product

Types of brands

1. Individual brand name

Each product has a special and unique brand name the manufacturer has to
promote each individual brand in the market separately this creates a practical
difficulty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chik
shampoo etc….
2. Family brand name
Family name is limited to one line of a product i.e. products which complete same
cycles family brand name can help combined advertising and sales promotion
however if one member of the family brand is rejected by the consumers or
customers the prestige of all under the family brand may be adversely affected. The
manufacturers have to take extraordinary care to guard against the danger family
brand name enables creation of strong shelf. It helps to secure quick popularity it is
preferable to have separate brands for each product for eg:-amul for milk products,
pounds for cosmetics etc…
3. Umbrella brand name
We may all products such as chemicals, engineering goods, automobiles etc.
Manufactured by the Tata concerns will have the Tata as one umbrella brand such a
device will also obtain low promotion cost and minimise however experience in any
of the line of products, a solitary failure may be very dangerous to the rest of the
products sold by a particular business house under umbrella brand.
4. Combination device
Data house is using combination device each product has individual name to
indicate the business house producing the product eg:- Tata Indica, side by side with
the product image we have the image of the organisation also many companies use
this device profitably.
5. Private or middleman’s brand
Branding can be done by manufacturers or distributors such as wholesalers, large
retailers. In India this practise is popular in the wooden, sport goods and searches
other industries it helps small manufacturers who have to rely on the middlemen for

http://www.miteshk.webs.com
 28

marketing. It is also used by big manufacturers the manufacturer merely produce

goods as per specifications and requirements of distributors and he need not worry
about marketing. Manufacturers make both national and private or middleman
brands. Consumers of the private or dealers brand.

`1 Some of the brand names that have created lasting impact on rural consumers
are as follows:-

¬ Every day batteries:- Battery with cat as a symbol

¬ Lifeboy
¬ Asian paints mascot
¬ Dabur chawan prakash
¬ Parle
¬ Parachute
¬ Amul
¬ Zandubalm
¬ Tata salt
¬ Nirma
¬ Textile:- Chermas, Kumar shirts.

Q. Explain the brand awareness in rural

marketing? Ans: Rural product development:-

The rural market is a fast growing one and
has a huge population with a great level of disposable income to encase this;
products have to be specifically developed to meet the creeds of rural market
sometimes existing products might have to be modified to suit these markets too
accordingly.

Rural product development has a strong edifice

on a great deal of research like feasibility, studies, rural aspiration and soon. This
paves way for a great deal of infra structure and expertise in this area.

Rural branding:-

Rural branding bears quit different from urban branding. The

first step towards rural branding is to search and gain insight into the working of rural
markets. Based on this communication campaigns products have to be developed
with a lot of rural sensitivity.

Rural market research:- rural market behave most differently from urban markets.
While many marketers have tried to market their products in rural areas. Just a hand
full of sum only has succeeded. A strong insight into rural consumer behaviour and
sensitivity to their values and beliefs is essential to upgrade the rural market
research not just gathering data but analyzing them and linking the findings to
promoting their products. Rural communication campaigns communication for rural
markets calls for a different kind of outlook. There must be a strong ascent on
http://www.miteshk.webs.com
 29

helping the target relate to message. The entire communication and media strategy
has to device a system based on research findings. These have to be developed in
the regional languages and set in the local culture for easier acceptance and reach
to the customers. Besides mass and outdoor media rural extravaganza (cultures) like
temple, festival, melas, and other events where the villagers come together can be
used for promotions.

Rural events: -

In the rural context, one of the best ways to capture the attention
of the audience is through event management. Since rural areas have limited venues
for entertainment, conducting an event in rural areas can bring a good response..

Rural direct marketing campaigns: - Direct marketing is one of the most

powerful ways to meet the targets and build product awareness as well as
promotion. The success of any direct marketing campaigns depends on the field
workers and their sensitivity and emotional connectivity to rural markets.

Data base creation and management:- Marketing branding and promotional

activities in rural context can be highly effective and thereafter have to create a
database of prospects. This data is essential for marketers to reach their target
accurately and helps marketing plan and communication strategies.

Q) What is meant by Product? And explain it with different strategies in rural

market?
Ans: Product is the most tangible and important dingle component of the marketing program.
Without product, there is nothing to distribute promote and to price. Product is a vehicle by
which a company provides consumer satisfaction. A product is a bundle of benefits
assembled in an identifiable form. In simple terms, products are anything that satisfies human
wants. The product mix includes product quantity, features, benefits, design, style, colors,
brand packaging, labeling, services and warranties.

Product market strategies:-

Markets have the following alternations to increase market share and profits

Existing product New product

Existing Market penetration Product development (or) product
markets differentiation
New markets Market development Diversification

Market penetration:- It involves expansion of sales of existing products in existing markets

by selling more to present customers or gaining new customers in existing market. The firm can
market its present products to existing markets. This is done through more aggressive marketing
mix.
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 30

Market development:- In Market development a present product is introduced to a new

market or a segment . Market development is the creation of new market by discovering new
application for existing goods. This is another alternative to expand market opportunity, prolong
product life cycles, profitability and survival.

Ex:- many companies are extending their activities to rural market to increase sales volume of
products like mineral water, chocolate, mobile phones etc.

Product development:-

Product development occurs when a firm introduces new

products to a market in which it is well established. Product development is the introduction
of new products in present market.

Diversification:-

Ex:- New syntactic fibers are known for textile products. The firm may decide to create new
products for existing market.

Diversification occurs when a firm seeks to enter a new market

Sturdy products:-
with completely new product. The innovations are introduced for the first time in the new
markets. The strategy is risky but the innovator can have speculator results.

Product strategies in rural market:- product strategies used by company’s in rural

markets are given below

Designing products:-

most of the rural consumers believe that

heavier the item, higher the power and durability, they prefer tough and long
lasting product.
EX:- bullet motor cycle continuous to be popular in villages; royal Enfield sells
about 65% of two wheelers in semi urban and rural areas; ambassador cars
continuous to be popular in rural areas.
The company’s can come out with new
products or promote existing products to suit field conditions in rural areas.

Small unit packing:-

EX:-
• L.G electronics came out with a unique product for rural market. It
launched sampoorna Indias first T.V with a Devanagari script on
screen display.
• Voltas has introduced a refrigerator for rural areas direct cold
technology keeps the refrigerator cold for several hours in case of long
 power cut.
• Nokia’s basic model is dust resistant and has a mini torch light for
using in rural areas.
It has been used for money consumer
products . Small units packing provide an opportunity for the consumers to try
the product and help the company to reach consumers like daily wage
earners.
EX:-

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 31

•
Ponds has gain market share over the past few years, focusing on rural
market ant it has introduced 20grams talcum powder.
• Cavin kare studied rural buyer behavior and introduced chik shampoo
in small sachet of 4ml at a low price of 50ps.
• Rasnna is now available in sachet pack priced at 1rupee each and one
sachet will make 2 glasses of soft drink
• Godrej Sara lee has single coiled sachet of goodnight coil for rural
products
Utility products:-The rural people are concerned with theutility of the
items rather than appearance or show
EX:-
• Philips has introduced free power radio RL117 priced at 995/- for the
first time in India. The radio requires no external battery’s or electricity
for operation.
• HMT watches are popular for utility value.

Q) What is meant by pricing and explain factors influencing

pricing?
Sol:- Economists defines price as the exchange value of a product or service always
expressed in terms of money. In simple terms price is the amount charged for the
product or service.

To the buyer price is a package of expectations and

satisfaction. To the seller price is a source of revenue and main determinant of profit.

Factors influencing pricing decisions:-

1.Objectives:-

many companies have established marketing goals or objectives

such as growth in sales, profits, market share and pricing plays a major role in
achieving the objectives.

2.cost of production:-The most decisive factor in pricing is the cost of production.

In the past, fixing of price was a sample affair: just add up all the costs incurred and
divide the final figure by the number of units produced.

The main defect with this approach is that it disregards the external
factors, particularly demand and the value placed on goods by the ultimate
consumer. Today on account of the various lines of production as well as
distributing, the overhead costs finding the cost of production are not simple.

3)Demand:- in the consumer oriented marketing , the consumers influence the price.
Every product has some utility for the buyer. It gives the buyer service,
http://www.miteshk.webs.com
 32

satisfaction, pleasure; the consumer would continue to buy the product. Higher the
demand for a product, lesser the need for giving additional discounts, credit, etc.. To
the distributors and dealers. This leads to higher price realization.

4)Competition:- another factor that influence pricing is competition. No manufacture

is free to fix his price without considering competition, unless he has a monopoly.

To avoid competitive pricing, a firm may decide that its

product may be sufficiently different from that of the others. This is achieved through
methods of advertising, branding etc.. Sometimes a higher price may itself
differentiate the product. This is known as prestige pricing.

5)Distribution channels:- Distribution channels also sometimes affect the price.

There are many middlemen working in the channel of distribution between the
manufacturer and the consumer. Each one of them has to be compensated for the
services rendered.

6)Supply of the product:-if the supply is less than demand, then the price of the
product will be more.

7)Availability of raw materials:- Availability of raw materials in domestic markets

generally enable the firm to bring down cost of production. The firm can fix a low selling
price.

8)If the brand is very popular among the consumers, then the manufacturer can charge a
higher price for the product.

9)If the purchasing power of the consumer is high, then the company can charge a
higher price for the product.

10) Promotion cost would normally increase the selling price as the company would like
to recover the cost from the consumers.

Q) What is meant by pricing and explain kinds of pricing?

Sol:- Economists defines price as the exchange value of a product or service always
expressed in terms of money. In simple terms price is the amount charged for the product
or service.

To the buyer price is a package of expectations and

satisfaction. To the seller price is a source of revenue and main determinant of profit.

Kinds of pricing:-

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 33

A firm may choose various kinds of pricing for their products:-

1) odd pricing:-

odd price may be a price ending in odd number or a price just

under a round number. Such a pricing is adopted generally by the seller of specialty
or convenience goods.

2) Psychological pricing:-

E.g.. Bata shoes are priced at399.95. Odd price may bring more sales. Under odd
pricing, buyers may feel that it is a mark down price.

it is stated that there are certain critical points

3) Prestige pricing:-
at prices such as 1,2,4,5,10 are psychologically appearing to consumers.

E.g.. Products such as shampoo, chocolates and biscuits are sold at certain price to

4) Consumers expectations:-
attract customers.

Prestige pricing is one that is fixed at a higher price, when

the producers near perfect substitute. Prestige pricing is adopted because many
customers feel that high price means high quality. Moreover the customer heels a
high status at a high price.

such prices are fixed by consumers.

Consumers are familiar with the rates and market condition and expect a particular
price to be charged for certain products.

5) Geographical pricing:- the distance between the seller and the buyer is
considered on Geographical pricing. When there is lot of distance between production
center and consumption centre, the producer or marketer can adopt different prices in
each area without creating any ill/will among customers. There are two ways of charging
transit cost.

a) F.O.B pricing( free on board):- F.O.B may be of two types…

i) F.O.B origin and F.O.B destination:- in the first case, the buyers will have
to incur the cost of transit a part from the price quoted and in the latter the price
quoted is inclusive of transit charges.

6)Zone pricing:- price is equal in the same zone. Market for a product is divided into
various zones. South zone, north zone etc.. In other words price are uniform with in a
zone.

7) price lining:- price lining is formed more commonly among retailers than among
wholesaler or producers. This system consists of selecting a limited number of prices at
which the store will sell it goods. E.g. A buyer of shirt can go into a shop where shirts
are retailed between 250/- t 500/-, it also helps the shopkeeper to plan his purchases..
 4

8)dual pricing:- when a manufacturer sells the same product at two different prices,
it is dual pricing. Under the dual pricing a producer is required compulsory to sell a part of
production to the govt or its authorized agency at substantially low price. The rest of the
product may be sold in the open market at a price fixed by the producers.

Eg. Sugar.

9)Negotiated pricing:- it is also known as variable pricing. This method is

invaluably adopted by industrial suppliers. In certain cases, the product may be prepared
on the basis of specification or designed by the buyer. In such cases the pricing has to be
negotiated and then fixed.

http://www.miteshk.webs.com
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