MBA PGP

Rural Marketing
 Syllabus

Unit – 1Rural Economy - Introduction to Rural Market, Definition & Scope

of Rural Marketing. Rural Market in India- Size & Scope, Rural development
as a core area, Efforts put for rural development by government (A brief
Overview). Emerging Profile of Rural Markets in India, Factors contributing
to Growth of rural markets.

Unit 2Rural Marketing – Concept and Scope - Nature of rural markets -

attractiveness of rural markets, Rural Consumer Vs. Urban Consumers – a
comparison. Characteristics of Rural Consumers.
Rural Market Environment: Demographics – Population, Occupation Pattern,
Literacy Level; Economic Factors – Income Generation, Expenditure Pattern,
Consumer Behavior- Social factors, Cultural factors, Technological factors,
Lifestyle, Personality.

Unit 3Relevance of Marketing mix for rural market/Consumers. Product

Strategies, Importance of Branding, Packaging and Labeling. Nature of
Competition in Rural Markets, the problem of Fake Brands, Segmentation,
Targeting & Positioning for rural market, Rural.

Unit 4Pricing Strategies & objectives pricing policies - innovative pricing

methods for rural markets.

Unit 5Distribution Strategies for Rural consumers. Channels of

Distribution- HAATS, Mandis, Public Distribution System, Co-operative
society, Distribution Models of FMCG, Companies HUL, ITC, etc.
Distribution networks, Ideal distribution model for rural markets. Promotion
strategy - appropriate media - Designing right promotion mix - promotional
campaigns.

Unit-1
 Rural Economy

Rural Economy: The rural economy holds significant potential for creating decent and
productive jobs, eradicating poverty, ensuring food security, and achieving social justice.

Agriculture-centric economy: Rural economy massively relies on agriculture (more than

50% of the population directly or indirectly depend upon agriculture), which is dependent
on unpredictable monsoon and prone to droughts and floods. This leads to low and erratic
income for farmers and agricultural workers.

Yet, decent work deficits persist, with many rural workers living in poverty and working
informally. As underlined during the United Nations Food Systems Summit in 2021, many of the
Sustainable Development Goals will not be achieved unless we take action to make decent work a
reality for all women and men working in agri-food systems and rural economies, thus ensuring
that we leave no one behind.

Contribution of Rural Economy in India:

India is an agricultural country with 70% of the workforce or two-third of

the population residing in rural areas. Half of billion strong Indians earn
their bread and butter from agriculture activities and allied products. The
growth of Indian GDP has substantial contribution from agriculture.
Rural economy contributes 46% towards the national income and 25-
30% of India's GDP. Therefore, it is extremely essential to focus on the
growth and development of India's rural economy in our journey by the
year 2025.
Initially, the primary source of rural economy was agriculture, but the
non-farm sector has replaced this place. Revitalization of the rural
economy is essential. Implementing modern technology and
mechanization in agriculture can improve productivity, efficiency and
profitability while reducing the cost. Helping farmers lead a better life is
imperative for country’s growth, and government is moving in that
direction. And for that reason, Rural Marketing is making its space
effectively.

Marketing: Identifying the needs of customers and potential customers, providing

products/services that satisfy the needs,and developing efficient processes or systems to
deliver your product/service to the market when,where,and how consumers want it.
Rural Marketing:

Rural Marketing is the term Rural marketing used to be an umbrella term for the people who dealt
with rural people in one way or another.

It got a separate meaning and importance in India after 1990.

Rural marketing refers to marketing activities in a rural area that covers a major portion of the total
geographical area and population of the country. Rural markets refer to marketing centers operating
in rural areas where favorable marketing infrastructure may not be present.

◉ Rural Marketing Meaning

Rural Marketing refers to the process of developing, pricing, promoting, and distributing rural-
specific product and service leading to an exchange between rural and urban market which satisfies
consumer demand and also achieve organizational objectives.

◉ Definition of Rural Marketing

 Rural marketing is defined as managing all the activities involved
in assessing, stimulating, and converting the Purchasing power of the rural customers
into Effective demand for specific products and services and moving them to the people
living in Rural areas.
 To create satisfaction and a better standard of living and thus achieve organizational
objectives.
 It involves the Planning & implementation of marketing functions for rural areas.

According to the National Commission on Agriculture,

Rural Marketing is a process that starts with a decision to produce a saleable farm commodity and it
involves all the aspects of the market structure or system, both functional and institutional that are
based on technical and economic considerations. It includes pre and post-harvest operations,
assembling, grading, storage, transportation, and distribution.

According to Thomsen,

The study of Rural Marketing comprises all the operations involved in the movement of agricultural
food and products, raw materials, and their derivations, such as textiles, from the farms to the final
consumers and the effects of such operations on producers, middlemen, and consumers.

◉ Concept of Rural Marketing

1. Rural to Urban Market
 It includes the outflow of products for production or consumption from the rural market to the
urban market. Further, agricultural products such as sugar, rice, wheat, and cotton are
transported from rural to urban areas.

2. Rural to Rural Market

It includes the exchange of products or services from one rural market to another rural market.
Cattles, agricultural products, carts, and other such things fall under this category.

3. Urban to Rural Market

Urban to rural marketing refers to the sale of goods and services in rural areas by urban
marketers. Agricultural inputs, as well as fast-moving consumer goods (FMCG) such as
detergents, soaps, cosmetics, textiles, and other items, commute from the urban to the rural.

► Nature of Rural Marketing

 Occupation pattern
 Large diverse and scattered market
 Socio-economic position
 Low literacy level
 Low standard of living
 Inadequate infrastructure facilities
 Traditional outlook
 Distance
 Diverse Socio-economic background
 Conservative lifestyle
 Poor Media reach
 Poor Medical facilities

► Importance of Rural Marketing

 Size of rural market
 Rural target population
 Employment
 Better living
 Contribution to national income
 Increase in farm income
► Scope of Rural Marketing
1. Large Population: According to 2001 census rural population is 72% of total
population and it is scattered over a wide range of geographical area

2. Rising Rural Prosperity: Average income level has improved due to modern
farming practices, contract farming, industrialization, migration to urban areas and
remittance of money by family members settled abroad.

3. Growth in Consumption: There is a growth in purchasing power of rural

consumers. The average per capita household expenditure is Rs. 382.

4. Changing Lifestyle: Lifestyle of rural consumer changed considerably.

5. Life Cycle Advantage: The products, which have attained the maturity stage in
urban market, is still in growth stage in rural market. E.g. popular soaps, skin
cream, talcum powder, etc.

6. Market Growth Rate Higher than Urban: As per the survey made by NCAER
the growth rate of FMCG market and durables market is higher in rural areas. The
rural market share is more than 50% for products like body talcum powder, toilet
soaps cooking oil, hair oil etc.

7. Rural Marketing is not Expensive: To promote consumer durables inside a state

costs Rs one crore while in urban areas it will costs in millions.

► Challenges in Rural Marketing

1. Understanding the rural consumer
2. Low per capita income
3. Low literacy levels
4. Seasonal Demand
5. Lack of infrastructure and physical facilities
6. Underdeveloped people and underdeveloped markets
7. Traditional outlook
8. Many languages and Dialects
9. Barter system
10. Inadequate Media coverage for promotions
 11. Availability of duplicate and cheap brands
12. Slow purchasing decision
13. Problems related to distribution and channel management
14. Cultural factors
15. Vast and scattered market

► 4 A’s of Rural Marketing

1. Affordability
2. Availability
3. Awareness
4. Acceptability

Features of Rural Marketing:

The main reason why the companies are focusing on rural market anddeveloping
effective strategies is to tap the market potential, that can beidentifiedasfollows:

1. Large and Scattered market:

The rural market of India is large and scattered in the sense that it consists of over 63 crore
consumer from 5, 70,000 villages spread throughout the country.

2. Major income from agriculture:

Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with
agricultural prosperity.

3. Low standard of living:

The consumer in the village area do have a low standard of living because of low literacy,
low per capita income, social backwardness, low savings, etc.

4. Traditional Outlook:
The rural consumer values old customs and tradition. They do not prefer changes.

5. Diverse socio-economic backwardness:

Rural consumers have diverse socio-economic backwardness. This is different in different
parts of the country.

6. Infrastructure Facilities:
The Infrastructure Facilities like roads, warehouses, communication system, financial
facilities are inadequate in rural areas. Hence physical distribution becomes costly due to
inadequate Infrastructure Facilities.
7.Higher purchasing capacity: Purchasing power of the rural people is
onrise.Marketershaverealizedthepotentialofruralmarkets,andthusareexpanding their operations in
rural India. In recent years, rural marketshaveacquired significanceincountrieslikeChina
andIndia,as theoverall growth of the economy has resulted into substantial increase
inpurchasingpowerofruralcommunities.

Importance of Rural Marketing:

Rural marketing implies applying marketing theory and directing marketing efforts to
create and satisfy needs and wants of rural market(customers).

Importance of marketing indicates the contribution of rural as well urban marketing. Rural
market is growing faster than urban, rural marketing results into overall balanced
economical and social development. Rural marketing turns beneficial to business units,
people residing in rural areas, people residing in urban areas, and to the entire nation. Let’s
see how grow than development of rural marketing contribute to overall prosperity and
welfare.

1. Reduced Burden on Urban Population: Rural marketing can contribute to rural

infrastructure and prosperity. People can also live comfortably in villages due to availability
of all goods and services in villages, even comparatively at low price. People, due to growth
of marketing activities, can earn their livelihood in rural places. Population pressure on urban
can be reduced.

2. Rapid Economic Growth: Naturally, marketing acts as catalyst agent for economic
growth. There exists more attractive business opportunities in rural than urban. Rural market
is more potential for consumer durables and services. Rural population largely depends on
agriculture and it can contribute nearly 50% to total national income. Agriculture enjoys
significant portion inexport business, too. Rural marketing improves agricultural sector
andimprovedagriculturalsectorcanboostwhole economyofthecountry.

3. Employment Generation: At present, nearly 70% of total Indian population feeds on

agricultural activities in rural areas. Rural marketing can generate more attractive
employment opportunities to rural and urban people. Growthof rural marketing leads to
increased business operations, professiona lactivities,and services that can generate a lot of
employment opportunities.

4. Improved Living Standard: Due to rural marketing system, rural buyers can easily
access needed standard goods and services at fair prices. In the sameway, rural marketing
improves rural infrastructure. Additionally, rural marketing can also improve their income.
These all aspects can directly improve living standard.

5. Development of Agro-based Industries: Rural marketing leads to set upagro-based

processing industries. Fruits, vegetables, cereals, pulses, etc., are used as raw-materials. Such
industries can improve farmers’ profit margin and employment opportunities.

6. Optimum Utilization of Rural Untapped Resources: There are unlimited

businesses opportunities exist in rural areas. Untapped and underutilized resources can
be utilized at optimum level and that can further accelerate overall economicgrowth.

7. Easy Marketability of Agricultural Produces: Growth of rural marketingimproves whole

 marketing system. Multiple options are available to farmersand local producers to market their
products. Big domestic corporate housesand multinational companies prefer to buy
agricultural products directly fromvillages by their own or through agents and small firms.

8. Improved Rural Infrastructures: Rural marketing and basic infrastructures gohand to

hand. Growth of rural marketing leads to improved transportation,insurance, banking,
communication, entertainment, and other facilities. Due toavailability of basic infrastructural
facilities, business units can easily reach thetargetruralbuyers.

9. Price Stability: Marketing results into better transportation, warehouses,and

communication facilities. Agricultural products can be
systematicallymarketedthroughouttheyear.Hugegapbetweendemandandsupplycanbeavoided
and, as a result, prices of most of commodities remain more or lessstable.

11. Balanced Industrial Growth: The gap between rural and

urbandevelopmentcanbereducedgradually.Ruraldevelopmentimprovesrurallifeandreducespres
sureonurbanlife.
12. Others: Apart from these points, there are a number of ways that
ruralmarketingcansignificantlycontributetoeconomicandsocialdevelopment.

Efforts put for Rural Development by Government

For uplifting the rural sector of our country,the Ministry of Rural Development and the
Government of India in coordination with Department of Rural Development and Department
of Land Resources have been carrying forwardvarious schemes. These schemes are formulated
to benefit the citizens of rural. India who willeventuallybecomethepillarsofIndianEconomy in
the longrun.

Some important schemes for Rural Development launched by Government ofIndiaare–

 Pradhan Mantri Gram Sadak Yojana(PMGSY)

Launched on 25 December 2000 by then Prime Minister AtalBihari Vajpayee,the scheme aims
at enhancing rural road connectivity.

Pradhan Mantri Gram Sadak Yojana began in 2000. Its purpose is to provide all-weather roads to rural areas.
Basic amenities like schools and hospitals have roads to connect them.

o The government wants to cover all rural areas by 2019. Around 60 thousand villages remain left to be
covered. Government allocates a large amount of money every year for this programme.
o Under the scheme, roads are built or improved. Existing roads which are narrow and kutcha, are
made bigger and broad with the pucca surfaces.

The roads connect villages with other villages too. Farmers can now take their crops to mandi easily.
Children go to school daily without any problem, even during rain. Patients reach hospitals faster in
case of an emergency.

o More money is allotted to hilly areas and remotely located villages. Service roads are also constructed
alongside major highways.
o Roads are built according to technical standards fixed by the government. Good quality material is
used for pucca roads. The work is monitored regularly.
 o Programmes of rural development in India, like Pradhan Mantri Gram Sadak Yojana, improve basic
facilities and bring development to rural areas. The construction of good roads acts as a catalyst for
the growth of villages.

 DeenDayalUpadhyayaGrameenKaushalyaYojana

DeenDayalUpadhyayaGrameenKaushalyaYojana, a part of NationalLivelihood Mission, has

the objectives of catering to the career aspirations of the rural youth and adding diversity to
the income of rural families. Launchedon 25th September 2014, the scheme’s prime focus is
on the rural youth ofpoor familiesagedbetween15and35.An amount of Rs1500crores has been
provided for the scheme which will help in enhancing employability. Theyojana is present in
21 States and Union Territories across 568 districts and6215 blocks changing the lives of
youth. Around 690 projects are beingimplemented by 300 partners. As per the government
reports, over 11 lakhcandidates have been trained till now and nearly more than 6 lakh
candidateshavebeenplaced in jobs.

Programmes of rural development in India aim to provide employment opportunities for rural youth. Deen
Dayal Upadhyaya Grameen Kaushalya Yojana is one such skill development scheme.

o It began in 2014 to provide skill training to rural BPL youth. The scheme enables poor rural
candidates to secure jobs as per their skills and aptitude.
o The government identifies job roles which are in demand. Based on this, training courses are offered
across various sectors. Candidates are enrolled for courses like ITIs, apprenticeships etc.
o The scheme focuses on placement-oriented training. At least 70% of trainees should get a job after
the course. Post-training support is also provided to help youth get jobs.

Mahatma Gandhi National Rural Employment Guarantee Act

Programmes of rural development in India focus on generating employment in rural areas. Mahatma Gandhi,
National Rural Employment Guarantee Act, is one such scheme.

As per the Mahatma Gandhi National Rural Employment Guarantee Act(MGNREGA) of

2005, 100 days of employment is guaranteed to any rural household adult who is willing to
dounskilled manual work in a financial year.The Act addresses the working people and their
fundamental right to live life with dignity. If a person does not get a job within 15 days, he is
eligible forgetting unemployment allowance. National Rural Employment Guarantee
Act(NREGA) also highlights the importance of basic right to work. Amendments have been
introduced to this act to minimize corruption in the scheme.

MGNREGA has covered more than 700 districts in India. Also, there are currently more
than14.8croreMGNREGAcardsthathave been issued in the country, and in total of 28 crore
individuals have reaped the benefits of this scheme in theyear2020-21.

o It began in 2005 to provide at least 100 days of wage employment every year to rural households.
The scheme guarantees work to improve the livelihood of the rural poor.
 o MGNREGA aims to build assets like roads, canals, ponds etc. Jobs are provided for public works
related to natural resource management.
o Any adult member willing to do unskilled manual work can apply under the scheme. Works are
identified, keeping local needs and resources in mind.
o The central government funds the scheme fully. Wages are paid as per the minimum wage fixed by
states. Extra wages are paid in case of delayed payment.
o At least one-third of the beneficiaries under the scheme should be women. Scheduled castes,
scheduled tribes and disabled people get preference.
o Public works taken up should not compete with local labour. Only such works where additional
manpower is needed are allowed.
o Transparency is ensured through proper maintenance of muster rolls and accounts. Grievance
redressal systems are put in place.
o Programmes of rural development in India, like MGNREGA, provide a safety net for the rural poor
during lean agricultural seasons. The additional income helps them meet basic needs.

Samagra Shiksha Abhiyan

Programmes of rural development in India focus on improving education facilities. Samagra Shiksha
Abhiyan is one such integrated scheme.

o It started in 2018 by merging schemes like Sarva Shiksha Abhiyan, Rashtriya Madhyamik Shiksha
Abhiyan and Teacher Education.
o The scheme aims to provide quality education from preschool to senior secondary level in rural areas.
It focuses on universal access, equity and quality improvement.
o Samagra Shiksha Abhiyan works to improve school infrastructure and equip classrooms with
teaching materials. Teacher training programmes are organised regularly.
o Digital initiatives are taken up under the scheme to introduce e-books, online lessons and digital labs.
Workshops are conducted on modern pedagogical practices.
o More stress is given to girls' education and children with special needs. Activities are planned for the
overall development of weak students.
o Financial support is provided for various interventions undertaken by states. Construction of new
school buildings and hostels is funded.
o Importance is given to vocational education from Class 9 onwards. Students are counselled about
career options and trained for employable skills.
o Programmes of rural development in India, like Samagra Shiksha Abhiyan, bridge the gap between
rural and urban education. Better school facilities and trained teachers ensure quality education for
all.

 DeendayalAntyodayaYojana/NationalRuralLivelihoodMission
Swarnjayanti Gram SwarozgarYojana which is redesigned as National Rural Livelihood
Mission was launched in 2011 by Ministry of Rural Develop. Alsoknown as Ajeevika , this
scheme aims at empowering women self-help modelacross the country. Under this scheme, the
government provides a loan of 3lakhrupees at aninterestrateof7% whichcanbe reducedto4% at
the time of repayment. The scheme was aided by World Bank and aimed at creating efficient
and also effective institutional platforms for poor people. It alsohelped in increasing the
household income by improving access to financial services. NRLM also helps in harnessing
the capabilities of the poor so that they can participate in the growth of the economy of the
country.

 PrimeMinisterRuralDevelopmentFellowsScheme

The Prime Minister Rural Development Fellowship (PMRDF) is a scheme initiated by the
Ministry of Rural Development, implemented in collaboration with State Governments. It
has dual goals of providing short-term support to the district administration in the
underdeveloped and remote areas of the country and develops competent and committed
leaders and facilitators who can serve as are source for a long-term.

 Sampoorna Grameen Rozgar Yojana(SGRY)

The Sampoorna Grameen Rozgar Yojana (SGRY) was launched in 2001 to provide
employment to the poor. It also aimed at providing food to people in areas who live below the
poverty line and improving their nutritional levels. Other objectives of this Yojana were to
provide social and economic assets to the people living in rural areas. The scheme did not
include the employment of contractors or middlemen.

 SansadAdarshGramYojana(SAGY)

SansadAdarsh Gram Yojana (SAGY) is a rural development project launched in2014 by the
Government of India in which each Member of Parliament will take the responsibility of
three villages and look after the personal, human, social, environmental and economic
development of the villages. This would substantially improve the standard of living as well
as the quality of life in the villages. No fundings have been provided to this project as
fundings can beraised throughexistingschemes.

 NationalSocialAssistanceProgramme(NSAP)

National Social Assistance Programme signifies the fulfilment of

DirectivePrinciplesinArticle41 and42 oftheconstitution whichstatesthatitistheduty of the state
to provide assistance to the citizens in terms of sickness,unemployment, old age in limits of
the economic capabilities. It is basically acentrally sponsored scheme of Government of India
which provides financialhelp to widows, elderly, people with disability in form of pensions.
The schemewas launched on August 15 in 1995. Until now the NSAP has more than 2.9crore
beneficiaries and by adding 1.5 crore state beneficiaries, the total
addsuptomorethan4crorepeoplewhoreapbenefits of thisprogram.

 PradhanMantriAwaasYojana(Gramin)/IndiraAwasYojana
Indira AwasYojana revamped as PradhanMantriGraminAwaasYojanain 2016is a welfare
programme created by the Indian Government to provide housingto rural poor people in India.
The goal of this scheme is to provide home to allcitizens till 2022. The cost of constructing the
houses will be shared by thecentre and the state. The scheme has been implemented in rural
areasthroughoutIndia,exceptinDelhiand Chandigarh.Housesdevelopedunderthis scheme will
have basic amenities such as toilet, electricity connection,drinking water connection, LPG
connection etc. The allotted houses will bejointly under the name of husband and wife. Until
now 1.2 crore houses havebeen sanctioned with almost 58 Lakh houses completed. In 2022,
thegovernmenthassanctionedoverRs48,000crore for the scheme in the budget,and the
government aim store a target of almost 80 lakh this year.

o It began in 2016 to provide pucca houses with basic amenities to rural households by 2022. The
scheme aims to cover all 2.95 crore eligible rural households with a new house.
o PMAY-G will focus on "Housing for All" by 2022. Financial assistance up to Rs 1.20 lakh is
provided for constructing a new house or improvement of an existing house.
o More funds are allotted to houses of SC/STs, minorities, scheduled tribes and disabled persons.
Assistance is provided in instalments based on construction milestones.
 o The scheme is implemented through state governments and their selected agencies. Individual
beneficiary-led construction is the main mode of implementation.
o Each state identifies eligible households. Beneficiaries are given the freedom to choose their
indigenous house designs.
o Programmes of rural development in India, like PMAY-G, benefit the poorest people who cannot
construct houses on their own. Houses reduce the effects of poverty and act as assets for the rural
poor.
o The scheme generates substantial employment opportunities for rural masons, labourers and material
suppliers. This, in turn, boosts the rural economy.

 AntyodayaAnnaYojana(AAY)

LaunchedbytheformerPrimeMinisterAtalBihariVajpayeein2000,
theAntyodaya Anna Yojana aimed at providing food grains to around 2 crorepeople at
subsidised rates. As per the scheme Below Poverty Line (BPL)families were provided 35
kgs of food grains. Rice was provided at the rate ofRs 3/kg and wheat at the rate of Rs 2/kg.
The scheme was first launched inRajasthanbuthas now beenimplementedinallIndianstates.

Classification of rural consumers

The rural consumersareclassifiedintothefollowinggroupsbasedontheireconomicstatus:

 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
formarketingfirmstodependon.WheatfarmersinPunjabandrice merchantsofAndhra
Pradeshfallin thisgroup.
 TheMiddleClass:Thisisoneofthelargestsegmentsformanufacturedgoodsand is
fast expanding. Farmers cultivating sugarcane in UP and Karnataka fallinthiscategory.
 The Poor: This constitutes a huge segment. Purchasing power is less, butstrength
is more. They receive the grants from government and reap
thebenefitsofmanysuchschemesandmaymovetowardsthemiddleclass.Thefarmers
ofBiharandOrissafallunderthiscategory.

Profile of ruralconsumers
IMRB (Indian Market Research Bureau) and NCAER “(National Council forApplied
Economic Research) have made available a few studies based on
whichruralconsumersprofilecanbearrived at.

 Literacy: 23% of rural Indian population is literate and people are getting added
to this list year after year. There are still some villages which are underdeveloped.
Maximum education is primary school or in some cases high school. To this group the
marketing promotional strategy to be adopted is demonstration of product features and
advantages. Print media and posters do not make any impact.
 Income: An average rural consumer has a much lower income than his urban
counterpart. The disposable income has increased in the recent years toconsiderable
extent. In spite of this, the common traits of rural consumers are low purchasing
power, low standard of living, low per capita income and low economic and social
positions.
  Density: Rural population is scattered across 7 lakh villages. This implies
thatrural demand is scattered and urban demand is concentrated. · Influencers:There
are many reference groups in a village. These include teacher, doctor,panchayat
members, health workers, bank manager and co-operative boardworkers. These
influencers need to be kept in mind when a marketer decidesonruralmarketing.
 Occupation: The main occupation is agriculture. The size and ownership of
landdetermines thebasisfordifferentiationandconsumptionpatterns.

 Culture: Rural consumers are traditional in their outlook. They associate

fasterwithmessagesthatmatchtheirculturalbehavior.

 Language:English is not a language of rural India.Hence a marketer should

aim for communication in the local language.
 Media Habits: Television, radio, video and theatre are some of the
traditionalmedia that a rural consumer identifies with. The above are some of the
factorsthat differentiate the rural consumer from his urban counterpart. A marketer has
to decide on all the above parameters while designing a marketing plan.

Changing profile of ruralconsumers

Rural consumers as studied are dependent on agriculture and were not very literate about
products and services available. This scenario is slowly changing due to increase in literacy
and disposable income. Not long ago, rural consumers went to a near by city to buy``branded
products and services".Onlyselect household consumed branded goods, be it tea or jeans.
Earlier, big companies flocked to rural markets to establish their brands. Rural markets today
are critical for every marketer - be it for a branded shampoo or a television. Earlier marketers
thought of van campaigns, cinema commercials and a few wall paintings to entice rural folks
under their folds. Today a customer in a rural area is quite literate about myriad products that
are on offer in the market place, thanks to television. Many companies are for aying into the
rural markets and educating them on newer products and services.
The rural youth today are playing a far more significant role in influencing the purchase
decisions. They travel frequently out in the village and are the drivers of purchase decisions
regarding radios, television (black and white as well ascolor), automobiles and other goods.
They may not be the end customers but often are the people who influence the purchase of
high value products and they decide on which brands to choose. Penetration levels of
consumer durables in the rural sector have risen dramatically in the last decade or so.
Even the rural woman is coming out of the closet. She is exercising her choice in selecting
categories - the choice of brands may still be with the males of the household. The
prerogative of making the final purchase decisions stills rests with the chief male. In other
words, the “chief wage earner” syndrome still applies in the rural markets.

Factors contributing to growth of rural markets

1. Government initiatives:
The initiatives taken by the Government of India to promote rural markets are as follows:
(a) Self-sufficiency (Operation Flood, White Revolution, Blue Revolution)
(b) Integrated Rural Development Program (IRDP), TRYSEM (Training Rural Youth for Self-
Employment), REP (Rural Electrification Program).
(c) PSU and cooperative banks lend farmers (for example, ‘Kisaan’ credit card byCanara and
 Andhra Banks).
(d) Contract farming: Companies give high-yielding variety seeds and tied up with farmers to
cultivate crops and sell them back to the company.
2. Rising literacy levels:
As per the 2001 census, about 50 per cent of the rural population is literate. This has
contributed to the increase in rural demand. This has changed the buying behaviour of rural
consumers and lifestyles. An increase in literacy levels has resulted in an increase in
demand for consumer goods.
3. Infrastructural facilities:
There is growth of infrastructure facilities and public service projects in rural India, which
includes construction of roads and transportation, communication network, rural electrification
and public distribution system. Because of these factors there is scope for rural marketing.
4. New employment opportunities:
Various socio-economic policies of the government have resulted in the development of rural
India, which has resulted in new employment opportunities; for example, IRDP (Integrated
Rural Development Program).
5. Rising mass media:
Improved penetration of mass media has resulted in the creation of awareness among rural
consumers (Press, TV, hoardings, radio, etc.).
6. Agricultural research:
Research in the field of agriculture has resulted in increased scope for rural marketing. In
India, agricultural research is being conducted by Indian Council of Agricultural Research
(ICAR) and other institutions. Use of new scientific methods has increased the crop yields by
manifold. It has led to Green Revolution.
7. Marketing efforts:
A large number of MNCs have entered rural markets. MNCs such as Hindustan Lever, LG
Electronics, Godrej, Philips and Bajaj have made innovative marketing efforts in the area of
availability, affordability, acceptability and awareness.
8. Urban influence:
The people in rural areas are influenced by the urban people in their buying behaviour and
lifestyle. This may be because of the exposure to mass media and the villagers working in
towns and cities influence the lifestyles and habits of youth in villages.

Unit- 2
 Rural Marketing
Nature of Rural Markets
The rural market has been growing constantly over the years, and more thanabout 800
million people live in villages in India. Today, Indian companies, aswell as multinationals
like Colgate, Godrej, and Hindustan Lever, are focusingon rural markets. Opportunities in
rural markets are very promising for thosewho can fathom the kinetics of rural markets and
squeeze them to their bestadvantage.
Unlike urban markets, rural markets are extremely unpredictable and possess special
features.The highlighted population is predominantly illiterate,have lower and irregular
income levels.They don’t possess a stable or a predictable reaction pattern due to
inconsistent income. Demand for a product depends on the availability of necessities like
power,transportation, schools,and hospitals. Rural markets largely depend on the
government’s contribution in the rural sector.

LARGESCATTEREDMARKET
 The rural market in India is large and scattered which means that
itconsistsofapproximatelyaround63crorecustomersacross5,70,000villagesthroughoutt
hecountry.
 Theruralpopulationhasincreasedby125inthelastdecadeandaccountsforover40%oftheIndi
aneconomy.
 The market offers great opportunities in comparison with the urban sector.It blankets the
maximum population and regions, hence consists of themaximum number of consumers.
Rural market accounts for almost 70% ofthetotalIndianpopulation.
DIVERSEANDHETEROGENEOUS
 Rural Market is unbelievably diverse and heterogeneous, which furnishes
amarketforallcategoriesofproducts andservices. It consists of as many as 20,000 ethnic
groups, which pronounces a hardchallengetothemarketer.
 There exist over 24 languages and 1,642 dialects or so, which makes
ittremendouslydifficultto comeupwithasinglepromotionalmessage.
 We find various types of buyers in rural areas; few are simple while few
aresophisticated, some are rich and the other poor, some might be educatedwhile the
others could be illiterates, few of them could be extremelydynamic and modern while
some are rigid and conservative, some rely onquality while a few might compromise on
quality responding to availabilityand pricing. So, it exhibits an extremely diverse and a
heterogeneousmarket.
 LOWSTANDARDOFLIVING
 Consumersinruralareashave arelativelylowstandardofliving,andruralcustomers
havediversesocio-economicbackwardness.
 Low standard of living is a result of lower literacy rates, low per capitaincome hence,
low purchasing power, social backwardness and because oflow ornosavings.
PRICING
 Price is the most crucial factor that influences the buying decision of acustomerin
aruralmarket.
 They can compromise on quality for a lower price and magnet towardsdiscounts
andsales.
 The payment mostly functions on a credit basis. They are accustomed
topostponingpayments.
PROMOTION
 Personalsellingworkswellforruralmasses.Rural customer’smagnet to
localandregional promotionalefforts.
 Their reference group is a combination of educated and illiterate familymembers
residing in urban areas. They strongly believe their religious orspiritual
readerswhoareadominantpartoftheirreferencegroups.
 Articles like knives, rings, bangles, key-chains, caps, gas lighters, portraits,lamps
calendars, and cards with religious impression are favourablepromotionalarticlesin
aruralmarket.
 Visualadvertisementspublishedinlocalmagazinesandnewspapersintheirregionallang
uagemightworkwonders.
PRODUCTS
 Customers in your rural markets bank on the utility of a product comparedto status and
prestige.
 They believe in simple and effective products thatservethemin thelongrun
They reciprocate to products that equate with their religious beliefs andsocialnorms.
 They favour products that can be used and that benefit all family
membersratherthanthepersonal-useones.
 Branding, packaging, and labelling have minimal influence on this marketsegment.
 They are less concerned or unaware of the after sales services associatedwithproducts
liketheguarantee, warranty, services,andsoon.
DISTRIBUTION
 Purchasesaremostlymadefromknownretailersandsalesmen.Ruralmarketsdon’tbelieveinmal
lcultureor thebiggerdepartmentalstores.
 Purchasemostlyhappensfromretailoutletssituatedinruralor suburbanareas.
 They are not keen on home delivery. They seek instant possession. Sincethey lack
patience, they are found eager to possess and use productsimmediately.
 Caste, religion, political parties, religious and spiritual leaders play
asignificantroleinchoosingretailers.
 Online marketing has not yet secured its place in rural areas. They
normallyplacefrequentsmallorderswiththeirretailersandlackstoragefacilities.

Ruralattractiveness
 1. PopulationGrowth:
Increased in population and, hence, increase in demand. At present ruralpopulation is
account for nearly 72 crores of total Indian population,
threetimesmorethanurbanpopulation.Morepopulationmeansmoredemand.
2. AgricultureProsperity:
Market increases due to agrarian prosperity. Profitable farming and bettermarketing options in
some states have made a large number of villagers thepotential consumers for FMCG (Fast
Moving Consumer Goods) companies. Thegreaterthe agriculture developmentinanarea,the
greaterthe ruralmarket.
3. RuralDevelopmentProgramme
Large inflow of investment in rural development programme from
governmentandothersourcescontributedtoimprovedlife styleofruralsegments.
4. IntensiveInteractionwithUrbanPopulation:
Increasedcontactsofruralpeople withurbancounterpartdue torapiddevelopmentof
transportationandtelecommunication.
5. IncreasedPopulationMobility:
Mobility of rural population to urban areas, metro cities and foreign
countriesintensifiedincomesand, hence,purchasingpowerofruralpeople.
6. IncreasedRuralAttraction:
Increasingattractionofrichpeopletostaytemporaryorpermanentlyinruralareas for better and
peaceful life. Agricultural land is being converted intoluxurious farm-houses. Such move is
leading to tremendous development ofruralmarket.
7. ImprovedLiteracyRate:
Increased literacy rate and education level among rural folks, and growth ofacademic and
training institutes in rural places have accelerated growth
ofruralmarket.Literacylevel25%beforeindependence– isnowmorethan67%.
8. ImprovedRuralInfrastructure:
Improvedinfrastructurehaspositiveimpactsonruralmarketinseveralways.Availability of
electricity, education, health, transportation, communicationand entertainment, and so on
contributed to rural development and, hence,ruralmarket.
9. GrowthofAgro-processingIndustry:
Establishment and growth of agro-processing industries, and
activeinvolvementofthegiantbusinessunits(Forexample,RelianceFresh)indistributionofagro-
productslikefruits,vegetables,serials,etc.,havechangedincomeandlifestyleofruralpeople.
10. PoliticalInfluenceofRuralPopulation:
Improved and increased political influence of rural people can
significantlycontributetoruraldevelopment.
11. ForeignIncome:
Inflow of foreign remittance (transfer funds) and foreign-made products
intoruralareassignificantfueled toruralmarketboom.
12. ReformsinLandTenureSystem:
Significantchangesinlandtenuresystemcausingastructuralchangeinownershippatternaffectedp
ositivelythelifeof farmers.
13. RuralDevelopmentPriority:
Liberal assistance from national and international financial institutions
andagenciesforruraldevelopmenthaschangedrurallifestyle.WorldBankhasgrantedbillions
ofrupeeforruralinfrastructure.
14. RoleofGiantBusinessTycoons:
Increased corporate business interest in rural areas resulted into rapid ruraldevelopment
and,consequently,has fueledtogrowthofruralmarket.
Corporatetycoonsareliberallydonatingforimprovingruralinfrastructures.

15. RapidSocio-economicChanges:
Socio-economic changes (e.g., lifestyle, habits and tastes, economic status,etc.) resulted into
drastic changes in living pattern of rural people resulted intogreater potential for cosmetics
and durable products along with automobiles.After the basic needs of food, cloth and shelter,
they are looking at how to livebetter.
CharacteristicsofruralconsumerEducation
Consumersarelessliterateduetofewereducationalfacilities.

The marketers need such strategies which generate product awarenessconsidering this
characteristic. They can incorporate an audio-visual medium ofcommunicationin
theirmarketingcampaign.

Low-Income Levels

The incomeoftheruralconsumerhasgrownoverthe years.Butstill,theirdisposable income is

spent on basic necessities. They prefer affordableproducts
andpurchaseonlytherequiredquantityof goods.
The marketers must launch their products in small packaging and at lowerrates.

Occupation
The consumption pattern of rural consumers largely depends upon theirincome and
occupation. It is observed that the occupation of a rural consumerisframingin general.
There exist other professions as well, like service providers, technical workers,etc.
Thecompaniesmustlaunchsuchproductsinmarketsthatsatisfyallconsumergroups.

ImpactofReferenceGroups

In rural areas, the consumer is often influenced by a few people.

Consequently,thereisasignificantchangeintheirbuyingbehavior.
The rural marketers must plan their strategies that positively impact theseinfluencers.
Thepeoplewho mayinfluence ruralconsumersmayinclude:
 1. LocalVendors
2. Teachers
3. BankManagersLocalLeaders
4. HealthWorkers,etc.
5. MediaHabits
People residing in rural areas are less literate, as discussed above. Thus,
printmediadoesnothavemuchimpactonruralconsumers.
The companies must use those communication channels that reach consumersquickly.

BrandLoyalty

Rural consumers tend to be loyal to brands. With the development,

ruralconsumersarewellawareoftheavailablebrands.
Some brands have successfully created a strong consumer base in the ruralmarkets.

Valuefor Money

It is the main characteristic of rural consumers. Consumers look for qualityproducts

atjustifiedprices.
Rural marketers should try to create a sense of trust in the mind of theconsumers. And
offer products that deliver maximum benefits as per theirvalue.

Ruralvs.Urban Mindsets
Humansettlementsareclassifiedasruralorurbandependingonthedensityofhuman-
createdstructuresandresidentpeopleinaparticulararea.Urbanareascan includetown
andcitieswhileruralareasincludevillagesandhamlets.
Whileruralareasmaydeveloprandomlyonthe basisofnaturalvegetationandfauna available in a
region, urban settlements are proper, planned settlementsbuilt up according to a process called
urbanization. Many times, rural areas arefocused upon by governments and development
agencies and turned intourbanareas.
Unlike rural areas, urban settlements are defined by their advanced civicamenities,
opportunities for education, facilities for transport, business andsocial interaction and overall
better standard of living. Socio-cultural statisticsareusuallybasedonanurbanpopulation.
While ruralsettlementsarebasedmoreonnaturalresources andevents,the
Urbanpopulationreceivesthebenefitsofman’s advancementsinthe areasofscience and technology
and is not nature-dependent for its day to dayfunctions. Businesses stay open late into the
evenings in urban areas while,sunset in rural areas means the day is virtually over goods/
service for somevalue in return such as Money".
So the Market is same everywhere .But, thedifference is in the consumer behaviour. There will
be different buyers in eachmarket. This is because of different factors which Influence them. So
the sameway there is a difference between Rural and Urban Market. The factors are somany to
define. There is a difference in all the marketing Variables. That iswhere most of the companies
approach with different Marketing Mix andStrategies to Rural Market. The strategies differs
from the urban to ruralmarket.

The companies which have understood the phenomena of ruralmarket have succeeded in the
market, For Ex: HUL, ITC, Colgate, RajdootMotorcycle. These companies have done a perfect
homework andImplemented in terms of effort and Operations. These companies approachshows
thatthereisadifferencebetweenRuralandUrbanMarket.
Infrastructure: The facilities like Electricity, Internet, Roads and Buildings,Educational
Institutions, Financial Institutions, Communication and OrganizedMarket, Other Facilities
differs in urban and rural market. In urban everythinggets implemented soon and Availability
is also there. Where as in rural marketeverythingtakesagoodamountoftime.
Economy: Here the Economy means, the earning Capacity in a rural Market.The cost of
Living always depends upon their way of earning. So, the Incomelevels are unreliable, as
Most of them are depended upon the seasons andAgriculture. SotheIncomelevelscannotbea
fixed one.
Lifestyle: The Lifestyle, that is living pattern of both the markets differ a lot.This can be
important factor which influences the companies to think of whentheyapproachruralmarket.
Socio- Cultural Background: Due to the illiteracy level and Culture adaptabilityfrom long
time the rural market always gets differ than the urban market. Thesuperstition and other
belief as well as the way of thinking towards productsandgoodsdifferin thesetwomarkets.

Availability or Reach: Due to the areas which are diverted geographically

andHeterogeneous market the reach is very difficult. The logistics for rural
marketisatoughtaskthantoreachtheUrbanMarket.
Habits: The daily routine of the people makes them to cultivate differenthabits. Apart from
due to the awareness is low in Media terms there will be adifferencein thehabits.
Competition: The competition in the market for brands and Companies alwaysdiffer. As in
rural markets it is always the channel Partner and Retailer plays
avitalrole.ButwhereasinUrbanMarketBrandplaysa greatrole.

Rural Market Environment

Rural marketing environment means all those factors like demographic –Physical,
Economic, Social etc. which affect the rural marketing. When marketing activities are done
in the rural areas, it is necessary to know the conditions of rural markets in terms of
environment which is ever changing. Rural marketing requires an understanding of the rural
environment in which companies have to operate to deliver product and services.
Rural marketing is basically a focused marketing activity of an organization. The environment
gives the complete picture of threats and opportunities of the markets.

Environment means external conditions or surroundings, those in which people live or work
and it includes all elements, factors, conditions that have some impact on growth and
development of certain organism.

Marketing cannot take place in isolation. Marketing being a dynamic activity isalways
affected by its environment. A successful marketing is customer-centric; it starts from
understanding the customers. Consumer decisions andactions can be properly understood only
when the force field in which they areoperating isunderstood.

Featuresofruralmarketing environment
 Affected by External Factors – Main feature of rural marketing environment is
 that it is greatly affected by external factors like demographic, economical,
political, socio culture etc. It is necessary to study these external factors from the
point of view of rural markets because these factors are different in rural markets
as compared to urban markets.
 Flexibility – Rural marketing environment is not static or rigid. It is highly
dynamic and keep changing as compared to last few decades. Rural markets have
shown a greater change now a days in terms of various factors like income, birth
rate, housing pattern etc.
 Complexity – Another feature of rural marketing environment is complexity.
There is not only one or two factor which affect rural markets but there are
various factors. So, it is not easy to study all factors and hence, it is complex in
nature.
 Relativity – Impact of rural marketing environment may differ from company to
company or country to country. Some environmental factors may affect some company
a lot while these factors may have less effect on other company.
 Uncertainty – It is very difficult to predict the changes of marketing environment.
As environment is changing very fast. For example, rural markets have great change
in term of IT, fashion revolution etc.

Importance of rural market environment

1. To Study the Developments and Complexities of Rural Environment:

Complexities of environment refer to those factors which influence the business. These
factors affect the business in different ways. Marketing environment is studied for
measuring these complexities because in environment, changes occurs regularly like
change in interest of consumers, income profile of rural consumers, size, qualities,
availability of goods, occupation etc.
In short, these complexities and changes can be ascertained easily through the study of
marketing environment. Study of rural marketing environmental is also important for
marketers in order to realize the developments and trends in rural markets rather than to know
the static picture of rural market environment.

2. To Make Company Policy:

In order to prepare the company policy, it is responsibility of marketing manager to change
the company’s policy along with change in environment. Company’s policy will be different
in rural markets as compared to urban markets. Moreover, he should make timely changes in
these policies and strategies according to changes occurring in the environment. Success of
any business depend on the fact that how fast it can make changes in the policies and
strategies on the basis of change in environment.

3. Help in Taking Various Marketing Decision:

A marketing manager has to take various decisions regarding marketing at different times.
Appropriate decisions can be taken only if marketing manager has integrated knowledge of
marketing environment. On the basis of these decisions, he can establish proper coordination
among marketing departments.

Understanding of rural marketing environment help in taking various marketing decisions

like product decision, price decision, demand estimate decision etc. Demographic, socio
cultural, economic factors in rural areas help in preparing marketing plan for the marketer.
 4. To Recognize New Market Opportunities:
Opportunities are the favourable situations of the business. If a marketing manager has
adequate strength, then he can take benefit of these opportunities. Through environment
analysis, timely knowledge of available opportunities for business is received.
Thus, marketing manager can take benefit of these opportunities by making plans in suitable
time period. Marketing opportunity is an area of buyer need or potential interests in which a
company can perform profitably.
Opportunities can be in many forms and marketers must have an ability of spotting them. For
this, it is necessary to study rural marketing environment to tap the potential of rural markets.

5. To Understand Rural Market Conditions:

A marketing manager has to sell his product in the market for which he should have
knowledge about the customers, competitive units, suppliers, etc.
Information about market conditions like change in demand and supply of goods, fashion,
taste, competition, boom, recession in market, etc. is beneficial for the business. A marketing
manager gets all this information through the study of marketing environment.

6. Helpful in Providing Information Regarding Threats:

Threats refer to adverse situations which increase the risk of business. This risk can be due to
technical changes, increase in competition, change in fashion, economic changes and lack of
material. Thus knowledge of marketing environment is necessary for getting the timely
information regarding problems, challenges and possible threats of marketing

7. Helpful in Facing the Competition and to Get Information Regarding New

Challenges and Problems:
Study of marketing environment is necessary for keeping the products of the organization in
existence for long period. For this, marketing manager has to regularly study the products of
competitive units, their cost, marketing strategies, promotion plans, etc. A marketer can get
the information about new challenges and problems with the help of marketing
environment.

8. Importance in Studying Rural Consumer Behaviour::

Rural consumers are very different from urban consumers in terms of thinking, lifestyle,
culture, behaviour etc. Consumer decisions and actions of rural consumers can be properly
comprehend only when the factors in which they are operating is understood.

9. To Protect Themselves from the Effect of External Factors:

External factors like, economic, demographic, socio-cultural etc., keeps changing. These
factors are uncontrollable and their effect is unbearable. These factors provide threat as
well as opportunities. So, in order to protect themselves and to exploit opportunities, it is
important for the marketers to study these external environment factors.

Rural marketing environment- internal and external factors

These environmental factors are majorly divided into two parts like internaland
external:
(i) InternalEnvironment:
It refers to those elements which influence the internal activities of
anorganizationsuchas–Money,Material,MachineandLabour.
(ii) ExternalEnvironment:
It refers to those elements which influence the outside activities of anorganization like
– Demographic, Physical, Socio-Cultural, Technological,PoliticalandLegalinfluences.
So, an organization has its own internal strength and weaknesses as well ascommon external
opportunities and threats. They have to play effectively toconvert their hurdles into suitable
aid which can be controlled by them. In thefollowing sessions, we will discuss about the
major external factors whichinfluencetheorganization’sactivity.
Rural Marketing Environment means the opportunities and threats available infront of the
marketers while promoting their sales very particularly in the ruralareas. If the marketers are
concentrating both in rural as well as urbanmarkets, they can mutually tackle rural and urban
environmental threats in apositive manner. For example, while paying tax, Government is
giving taxbenefits or sometimes tax holidays (i.e., exempted to pay tax) to the
corporatethatarestarting theirproduction unitinruralareas.
This is just because to improve rural employment opportunities, their incomeand overall
rural prosperity. If a manufacturer constructs or shifts theirproduction place to rural area,
he/she can avail the tax benefit. In this way,one of the major environmental threats (i.e.,
liability to pay huge corporatetax) can be overcome and will reflect in the reduced
production cost. At thesame time, rural environmental threat such as – low literacy level,
reach ofmedia,etc.,can betackledbytargetingurbanconsumers.
Inrealsituation,itis verydifficulttoconductStrength,Weaknesses,Opportunities and Threats
(SWOT) analysis in this environment because of thefrequent occurrences of changes.
Marketers, who are ready to take effectivesteps to change their marketing plans and
strategies, will prosper in thischangingenvironment.
STRUCTUREOFRURALMARKETINGENVIRONMENT
Rural marketing structure includes the various types of environments whichare very
important and to be understood by the marketers who want to
selltheirproductsintheruralareas.
DemographicEnvironment:
Growing population is not a sign for growing market unless they haveconsiderable
purchasing power. Generally, people between the age group of15-35 are the largest
consumption group for many goods. More particularly,consumers who falls in the age group
of 20-35, accounts almost 25% of India’stotal consumption. If the corporate gear up their
marketing policies to attractthe people below the age group of 35, they can easily tap nearly
70% of ruralpotential.
EducationandLiteracyLevel ofRural WomenandYouth:
Fortunately, here also, the change is taking place and the rural literacy rate isrisen nearly 25%
over the last two decades. The improved literacy ratenaturally leads to the growth of demand
for education oriented products like –pen, pencil,notebooksandelectronicgoodssuchas–
digitaldiaries,calculators,etc.It alsoincreasestheruralemploymentopportunities,disposable
income and finally rural purchasing power for several products inthe sectors of consumer
durables as well as FMCG. So, the growth in ruralliteracylevel,resultsinnoticeablechange
fortheimprovementofrural
people’ssocio-economicstatus.
Although the Central and State Governments have implemented manyschemes, severe
punishments etc., to stop childhood marriage, keep awayfrom education to girls, killing
female child at the stage of birth itself, etc.,unfortunately, these customs are still exist in
many states of India such as –Bihar, Haryana, Rajasthan, Tamil Nadu, Uttar Pradesh and so
on. These are alljust because of higher illiteracy level among rural people and particularly
lackof literacylevelamong ruralwomen.
But the rural youth education and literacy level shows a good progress andprosperous rural
India. Here, the contribution given by both State and CentralGovernments to improve rural
youth literacy rate is noticeable one. Thisgrowth in youth literacy level increases the demand
for modern, fashionable,currenttrendproductsamongtheyoungergeneration.
Also it increases the brand awareness of rural consumers for various
products(nationalandinternationallevel).Marketerscanmakeserious effortstocapture these
adults group (falls in the age group of 20-35), for their productssuch as perfumes, two-
wheelers, western outfits, etc., which accounts nearly25%ofIndia’sconsumption.
Density ofPopulation:
Although the rural population has come down over the years, there has beenconsiderable
increase in real terms of total number of rural population. If wecompare
theruralproportiontototal populationin thepastthreedecades,itis slightly decreasing. But still the
total number of rural population is increasinginaconsiderablemanner.

RuralHousing:
One can easily assess the economic status and growth of any sector with thehelp of housing
pattern they have. Over the decades, there has beenspectacular change in the trend of
housing pattern. People are showinginterest to shift from less permanent (semi-pucca) type
of houses to morepermanent(pucca)typeofhouses.
In the decade of 1980s, kuccha and semi-pucca houses were more whencompared with the
more permanent houses. Just 22% of houses only felt inthe category of pucca houses. In
1990s, 31% of houses were in the type ofpuccaandtheremainingwereinthetypeofsemi-
puccaandkuchha.
In the millennium decade, the more permanent natured pucca houses hitsmore than 40 % of
rural houses (approximately 50 million houses) and the rest60% of housing
typecumulatesbothsemi-puccaandkuchha.
In this also, kuchha type of houses accounts only 23% (when compared withpast decades,
these type of houses are following down) and the balance 36% isa little bit improved semi-
pucca. Various state governments are putting moreefforts to increase semi-pucca and pucca
houses and to reduce kuccha houses.
RuralHouseholdPattern:
Rural household pattern consists of family structure and housing pattern. Inrural areas also,
Indian tradition joint family system is slowly goes down andthenuclearfamily
cultureisspreadingalikeintheurbanareas.
FamilyStructure:
Different types of family structures are existing in the demographic India.These can broadly
be classified based on the number of households in a
familyundertwogroupsnamely;Jointfamily andNuclearfamily.
Again following the same classification pattern, nuclear family can be
dividedintotwotypessuchas –nuclearfamily withelders andwithoutelders.
JointFamily:Group of people (grand-parents, parents, their brothers and sisters,
theirchildren) living together and using common property and dwelling house.Generally,
the elder person is the head of the family and he is responsible
tomakedecisionsinallissues.
NuclearwithElders:
It is a shrieked form of big joint family. It consists of grand-parents, parents andtheir children
alone (not living with parent’s brothers and sisters’ family). Here,also final decision is taken
by the senior person. This lack of individual decisionmaking capacity is one of the major
marketing hurdles for the marketers whilepromoting theirproductsinvillages.
NuclearwithoutElders:
This is the exact nuclear family which is commonly seen in urban sector Father,mother and
their children (nowadays, not even children only with single child)is the total family members
and they can take individual decisions in allmatters.
Recently, one more different type of nuclear family system is emerging inIndia. In this
system, all are living in a big common house but, having
separatekitchens,savings,assets/properties, etc.
OccupationalPatterns:
Agricultural and allied activities are the main occupation for the rural people.An allied
activity includes Horticulture, Forestry, Fishery, Animal Husbandry(dairy, poultry, and
goat), Floriculture etc., the everyday needs of the villagersare also met by many other types
of occupations. In rural sector, agri-basedoccupationcan bedifferenttypes.
Theoccupationswhich canbegenerallyseeninthevillagesare:
1. Farmlaborer
2. Milkman
3. Washerman
4. Pot maker
5. Blacksmith
6. Barber
7. Carpenter
8. Cobbler
9. Priest
10. Weaver.
Other rural occupation which are non-agricultural and support
agriculturalrequirements andtheruralpeople intheirdaily lifeare:
1. Villagedoctor
2. Policemen
3. Traditionalvillagenurse
4. Anganwadi workers
5. Teacher
6. Peon
7. Grocer
8. Mechanic
9. Cybercafeowner
10. Venders
11. Agriculturalexperts
12. Electriciansetc.
Census of 2001 reports that, this agri-based occupational trend is slowlychanging and a
gradual shift towards non-agri based work has been takenplace. As per the NSSO Rounds
Survey, for the year of 1999-2000, rural India’sPrimary sector workforce accounts for 76.1%,
Secondary sector 11.3%, Tertiarysector 12.5% and finally non-farm sector hits 23.8%, which
is next to thePrimarysector.
EconomicEnvironment:

There is a tremendous growth in rural Indian economy. The higher incomeclass in the rural
sector has almost grown six times. There is an increase in
theruralpercapitaincomealso.Let’sunderstandtheprogress.

IncomeGeneration:
The occupation pattern reveals the income generation pattern also. From theTable 3.7, we
can find out more than 40% of rural people are engaged inagriculturalandalliedactivities.
Nextfollowedbythe wage earners,salary
earners, and small shop keepers and so on. If we compare with urban sector,rural
sectorhitsverylittlepercentageofprofessionalsandbusinessman.
In contrast, nearly 40% of urban people are earning regular salaries and just3.45% of
people alone engaged in agriculture and related activities. Wageearners and small shop
keepers comes in the second and third placerespectively which is similar in the rural sector
and followed by the artisan,businessman etc.
ExpenditurePattern:
If we compare the availability of disposable income in the hands of rural andurban
population, generally less is with the rural people. This is reflected
intheirexpenditurepatternalsowhichisevidencedfromTable3.8.
From Table 3.8, it is clear that the rural population is spending more than halfof their income on
food items. If we particularly analyze their proportion ofexpenditure on food items, nearly 33%
is spended on cereals and the restalone is spended on all other food items such as – milk and
milk basedproducts,vegetables,edibleoil,beveragesandothers,etc.
If we compare with the expenditure pattern on non-food items of urbanpeople, approximately
41% alone accounts in the rural sector. Here, the majorproportion of rural people spending on
fuel and light is nearly 21% of totalexpenditureon non-food items.
SavingPattern:
As the time is changing the earning, consumption and saving pattern of theIndian consumers
are also changing. The research made by Centre for MacroConsumer Research (CMCR) of the
National Council of Applied EconomicResearch (NCAER) reports that there will be rapid shift
of 42% in the incomelevel of the rural households by 2015. This would become possible due to
thedevelopment in agriculture, and other activities like construction, retail,trading,etc.
There is a huge dramatic change in the rural sector with a change with the shiftin the income
earnings and the consumption patterns of the rural consumers.But there is a huge disparity
between the income generation and consumptionpattern among the various states of rural India.
Bridging this gap is a bigchallengefor themarketersandgovernment.
The study further reveals that the top 44% of the households in the countrycurrently have 93% of
the country’s surplus income. Further it states that eventhe bottom 60% of households have 40%
of total household expenditure. Thisshows the consumption power of the rural consumers who
are at the bottomof the pyramid. Hence, for any marketer it is inevitable to ignore the
ruralconsumerswhoareatthebottomof thepyramid.
Poor education is another factor that affects the size of the rural work force.Only 14% of the
rural population have a graduate and above as a chief breadwinner accounting for over 28% of
the total household income. Thus, theeducation factor directly links to the growth of the
income level of ruralhouseholds.
Rural people are also becoming aware of saving their income during the crisissituation. Based on
some research it has been reported that around 81% of therural householdssavea
portionoftheirdisposableincomeforthe future.
Because of their savings for the future more than 50% of the rural
householdsareveryconfidentabouttheirsteadyandbrightfuture.
PhysicalEnvironment:
Indian land is a mixture of both domestic land as well as cultivation land. Butunfortunately,
urban side cultivation land also slowly utilized for householdpurpose such as constructing
factories, apartments, buildings, multiplexes andso on. In contrast with the urban side, the rural
cultivation land is still used fortheagriculturepurpose.
DistinguishingFeatures:
Rural land is a combination of cultivation land and farm houses. Farmersnormally live in their own
farm houses and those houses falls in the category ofkuchhaingeneral.
If we observe Indian villages, construction of houses are majorly based onReligious, Caste and
Relationship. Some examples are – Agraharam – colony ofBrahmins, Vysiyar Street – Vaishyas
residing place and separate colony forScheduledCasteandScheduledTribes.

ScatteredandClusteredSettlement:
Rural India is inevitably connected with towns and villages. Most of the townsare nothing but
the developed villages and they have Municipalities instead ofPanchayats. But still, other
attributes such as dependency on weekly haats,mandis and melas for buying and selling of goods
in towns are as same as inthevillages.
People in towns are involved in various jobs, such as – teachers,
officers,professionals,businessmen,farmersandsoon.Allthoughtheyhavedifferent
occupations, we can simply group them under two categories like, stable
salaryearnersandunstableorirregularincomeearners.
OtherMajorMacroEnvironments:
As India is growing and has more opportunities for the lower-income group. Ifwe take the data
from the past ten years, the lower-income group shifted tohigher-incomegroup.
LandDistribution:
It has been clear that nearly 75% of income from rural area is generatedthrough agriculture and
allied activities. Land is the basic resource for allagriculture based activities. Land which is an
unrecognized asset has changedthe living style and attitude of farmers. Rural people enjoy the
closeness withnature,soil,animalsand other naturalthings.
Land can beclassifiedinmanyways such as:
Land Based onTopography:
i. Plains
ii. Plateaus
iii. Hills
iv. Mountains.

LandBased onUse:
 i. Cultivableland
ii. Uncultivable land
iii. Landforpublicinfrastructure
iv. Forestland.
Land management is becoming very important due to increase in demand
forlandbecauseofgrowth inIndianpopulation.
So, land distribution plays a vital role in the distribution of rural income.Proportion of
households and cultivated area under different land holdingpatternsinruralarea.
If we observe, approximately 80% of holdings accounts for 39% total landcultivated and the
balance 20% of holdings accounts for 61% of land. It showsthe uneven distribution of land and
ultimately leads to the uneven incomedistribution. In rural areas, less number of families only
falls in the higherincome groups when compared with the larger lower income groups’
category.From the marketer’s point of view, this is very important situation who aredealing with
agricultural inputs. Because unlike the common demand for agro-inputs (such as – fertilizers,
pesticides etc.) irrespective of income level orstreams, durable inputs like tractors, power tillers,
etc., may have moredemandfromhigherincomegroupsonly.
One more thing to be noticed here is the number of holdings is increasing. Ifwe compare the
land holdings pattern with the past three to four decades,nearly 70% of increase is affected due
to the fact of subdivision andfragmentationsystemwhichiswidely spreadinruralareas.
Even though the total consumption of rural sector exceeds urban sector,individual family
consumption is comparatively less. Marketing efforts shouldbe geared up to cater nearly 100
million rural families. Thus, the rural market
ischaracterizedbyampledisparitiesinconsumptionlevels.

LandUsePattern:
If we observe our land use pattern, from the total cultivation area,approximately 74% is occupied
by food crops and only 26% is occupied by non-food crops. This situation clearly exhibits the
excessive dependence on foodcrops rather than non-food commercial crops. It is because of the
farmer’sattitude towards food security i.e., they used to retain sufficient quantities ofproduction
for their own consumption and the rest alone goes – to the market.Take the food crops such as
rice, wheat, vegetables etc., as example whoseretentionquantityisestimatednearly50%.In
contrast,theentireproductionofnon-foodcropsgoes
tothemarketwithoutnoticeableproportionofretention like food crops. For example, almost the
entire production of cotton,sugarcane, groundnut, etc., are marketed. This has an implication in
generationof disposableincome.
In general, large farmers are able to generate adequate disposable incomesbecause they can
grow food as well as non-food, commercial crops with thehelp of sufficient land holding
pattern. But the small farmers are in a positionto grow only food crops that too in a little
quantity and are able to generatesmalldisposableincome.
So, the marketers surely show interest to target the large rural farmers.Anyway this situation is
slowly changing due to the introduction of latesttechnologies in the agricultural sector for the
result of high yield such as, highyield seeds,cross-culturedseeds,pesticides,etc.
Irrigation:
Irrigation plays a vital role while increasing the potentiality of rural market.Actually, in
agricultural sector, many new technologies were implemented inirrigation only such as
energized pump sets and so on to improve the overallyield and economy. To improve the
irrigated area, many kinds of investmentschemes like minor, medium and major are
continuously framed andimplemented bytheGovernment.
For example, states like Gujarat, Madhya Pradesh and Maharashtra areexpected to irrigate
about 19 lakh hectares of land from the project SardarSarofar Project across river Narmada.
We can imagine the prosperity offarmersinthesebeneficiary states.
The major source of irrigation is wells followed by canals. Nearly about 40% ofgross cropped
area is from approximately 80 million hectares of gross irrigatedarea. The important point to be
noted here is, still nearly 60% of rural India isdependentonrainfallfortheiragriculturalactivities.
Anyway, many steps have been taken and major and medium level irrigationprojects also
initiated to improve the rural irrigation potential. One
moreimportantschemelaunchedbytheGovernmentintheyearof2005was
‘National ProjectforRepair, RenovationandRestorationofWaterBodies’.
It mainly focuses on the restoration and augmentation of water bodies storagecapacities and
recovering and extending their lost potential. ‘Drip Irrigation’programme was launched to cover
more areas under irrigation. Currently,aboutthreelakh hectaresareunderdrip irrigationin
variousstatesofIndiaand a great scope to extend this method under the context of shrinking
groundwatersupply.
So, it is very clear that the availability of irrigation facilities leads to the highertechnology
development and finally results in the increased
productivity,incomeandimprovedruralpurchasing power.

Socio-CulturalEnvironment:
It is very difficult to define a definite boundary for the identification of socio-cultural differences
in a country. Because every country has different societyand polity and that too varies from
region to region. It also varies between sub-regions, different religious, caste and community
groups. So, some commonfactorshavebeengrouped together toformsocio-culturalregions.

The major factors which are used to construct different socio-cultural regionsin
anenvironment are:

i. Sociological factors – It cumulates the habits, tastes, lifestyle and

preferencesofdifferentconsumers.Thesocialconstitutionandchangesintheconstitutionsinfluencesthe
seinabig way.
ii. Anthropological factors – Existence of regional cultures and sub-
culturesplaysapredominantrolehere.

iii. Psychological factors – It includes the consumer’s attitude, interest,personality and mind
set. These psychological factors influence more in theoverallbuying behaviourofconsumers.
Sales promotional schemes, selling and distribution strategies, advertising areall influenced more
by the above mentioned factors. So, the marketers areusing these socio-cultural regions as a
yardstick for their market segmentationandtargetingpurpose.
In a nutshell, we can conclude that the urban environment shows degrees ofhomogeneity across
the socio-cultural regions, whereas the rural environmententirely differs.
ValuesandBeliefs:
Values are nothing but genetic traits and simplicity is the main ingredient. It
iscustomarytorespectelders andtouchtheirfeetastoseektheirblessings.
Occasions or festivals demand a lot of participation in terms of rangoli drawing,diyas and an array
of yummy treats made in the authentic variety as per thecasteandgeography.
Hindu rituals are a lot about song and dance and each family has a natural wayto adjust to these
formats. It is a ritual to pray to the Goddess of learning
MaaSaraswathitoachievesuccess.Similarly,business peoplealwaysinsistondrawing the Swastika
which marks prosperity and worship the Goddess ofwealth.
The values in India are about living life with an enthusiasm and observing thebelief that there is
one God existing despite so many religions. Respectingelders, understanding cross culture
traditions, free mingling to accommodatetolerance, staying interested in rural welfare are the
values of India. Thehistorical object, cuisine handicrafts, attire and lifestyle of the rural folks is
stillfollowed and preservedbyIndians.
Even though India is a country of various religions and caste, our culture tellsusjustonething
‘phirbhidilhaiHindustani’.

ExistenceofSub-Cultures:
Before we understand about the sub-culture, let us know about the culture.Culture is defined
as a complex of values, ideas, attitudes and othermeaningful symbols created by man to shape
human behaviour and theartifacts of that behaviour as they are transmitted from one
generation tonext.
We are all aware that India is the place for existence of a number of sub-cultures. It is easy to
identify people through their sub-culture, which isreflected by the race, religion, region,
nationality, etc. It varies from state tostateandeven districttodistrict.
People are likely to behave in the same manner, follow same
religiouspracticesandevenrepresentthesameracewhentheycome fromthesame
state or nation. For example – An Indian will behave like an Indian whichevercountry she/he
goes. Similarly, a Kannadiga or a Bihari will always presentherself/ himself as belonging to
her/his state. Even he/she will be morecomfortableinthecompanyofpeoplefromhis/herstate.
Rural people follow their culture very rigidly. A marketer has to understand theculture very
deeply before launching the product in a particular region or stateof India. The symbol or
language used to give message about the product andeven people selected (brand Ambassadors)
to communicate the message alsohavetobe selected carefully
dependingupontheregion,religion,etc.
CasteSystem:
The Indian caste system is a system of social stratification and social restrictionin India in which
communities are defined by thousands of hereditary groupscalled Jatis.
Indian society stands strongly on four pillars, such as, Brahmins, Kshatriyas,Vaishyas and
Shudras. Other sub-castes and cults are constructed on thesepillarsonly.
The Brahmins got first priority and supremacy position among the others. Theyhave separate
colony (popularly called as Agra haram) for themselves andothersareprohibitedeventoenter
inthatcolony.
The next priority was given to Kshatriyas (i.e., warriors), followed by Vaishyaswho belongs to
business or trade group. And finally, Shudras were given
lowestpriorityamongthefourclassesandweresufferedbylotofsocialandeconomic disadvantages such
as restricted to enter into temple, use commonwell,roads,school,hospitalsandotherfacilities.
They were supposed to live in the prescribed boundaries only. For example,
forthesurvivalofthosepeople,separateareaisallottedwhichisfaraway toreach in general. If they
entered in the common place or use any resources,severe punishment are given by the supreme
community people. After somedecades, fortunately, these caste based priorities were wiped out,
and all aretreated inequalmanner.
Basic human rights got supreme priority instead of all other things because ofthe
continuouseffort takenbyourGovernmentandothersocialservicevolunteers.
Even though, the old Zamindari system and untouchability were removed, stillsome sort of
social imbalances exist in many remote villages of India. Somepeople in village who are in
the decision making capacity, are more sensitivetowardsthe
castebasedfeelingsandtoorigidtoevenapproach.

Their values and beliefs should be honored; otherwise, reach and survival willbe more difficult
to the corporate. So, the marketers should be very consciouswhile drafting their promotional
policies, advertising schemes to spreadmessagesaboutproducts.
Caste system is very strong in rural India. People cannot do things against theircaste. Rural
people have to marry themselves or their children within theircaste. If they don’t do so, they may
have to pay heavy penalty such as – outcasting them from the village and community or even
sometimes parents killtheir own daughters and sons if they try to marry outside their caste or
withintheircaste(Honor Killing).
RuralRecreation:
Recreation is a vital part of rural social life. For retaining the physical andmental health the
recreation plays a major role. There are several centresavailable in the towns providing
recreating facilities as this is one of the waysto recreate people out of dull and monotonous life.
The rural recreations arenotpolished,homegrown andlesscostly.
Thereareseveralcharacteristicsof ruralrecreationthataregivenbelow:
i. Part of a rural life – It has become a routine work for the villagers to
recreateafteradayofhecticworkasapartoftheirsociallife.
ii. Collective participation – Musical shows and dramas are the best recreatingactivities that
the villagers perform. These are practised and performed ingroups. The villagers contribute
together and also offer several prizes in ordertoenjoycollectively.
iii. Family influence – During some festivals or any other auspicious occasionsthe family
members actively participate and arrange several recreationalprogrammes.
iv. Religious Recreation – Religion is a part of socio-cultural and recreation ofrural India.
Various religious stories are narrated or enacted in a
 particularfashionwithmusicthroughdramasandpuppetshowsetc.
v. Simple – Rural recreation activities are very simple in nature. There is
noelementofcommercializationinit.
vi. Universal – The biggest advantage in the rural recreation activities is thatthe whole village
population takes part and enjoys every bit of life with theirkithandkin.
However, nowadaysthereisaslightchangetakingplaceintheruralrecreational activities. The new
technologies involved in recreation in theurban areas have also influenced the rural recreation
programmes such as –nowtheruralprogrammesare
forashortertimeascomparedtoearlierwhichwasslowandtimeconsuming.Someevilelementsofurbanr
ecreationsuchas– smoking and drinking have also damaged spirit of rural traditional
recreationenjoyment.
AdministrativeandLegalStructures:
Panchayat Raj is a south Asian political system mainly in India, Pakistan andNepal. In India, it
has a four way administrative structure namely; Gram Sabha,Gram Panchayat, Panchayat Samiti,
and Zilla Parishad. Traditionally, it is anassembly of villagers under the head of five respective
elders to settle theirdisputes. Later on, its functions are stream lined. The top level and
bottomlevelofPanchayatRajareexplained here.
1. PanchayatRajInstitutions(PRIs):
PRIs ensure the direct participation of people from the grass root level itself.The salient
features of panchayat raj under the 73rd amendment of theconstitutionalact,1992, are:
i. To provide 3-tier system of Panchayati Raj for all states having population ofover2million.
The3-tiersystemof panchayatirajconsistsof thefollowing:
a. ZilaParishadatthe DistrictLevel;
b. PanchayatSamitisattheBlockLevel; and
c. GramPanchayatattheVillage Level.
ii. ToholdPanchayatelectionsregularly afterevery5years.
iii. To provide reservation of seats for Scheduled Castes, Scheduled Tribes
andWomen(notlessthan 33%).
iv. To appoint State Finance Commission to make recommendations as
regardsthefinancialpowersofthePanchayats.
v. To constitute District Planning Committee to prepare draft
developmentplansforthedistrictasawhole.
Powersandresponsibilitiesdelegatedtopanchayatsare:
I. Preparationofplanfor economicdevelopmentandsocialjustice.
II. Implementationof
theschemesforeconomicdevelopmentandsocialjusticeinrelationto29subjectsgiveninElevent
hSchedule ofthe Constitution.
III. Tolevy,collectandappropriatetaxes,duties,tollsandfees.
Thepanchayatsreceivefundsfromthreemainsourcessuchas:
I. Local bodygrants,asrecommendedbythe CentralFinanceCommission;
II. Fundsforimplementationofcentrally-sponsoredschemes;and
III. Funds released by the State Governments on the recommendations of
 theStateFinanceCommissions.
2. GramSabha:
Gram Sabha constitutes the lowest level of Panchayati Raj. A common GramSabha exists for
very small group villages with a population of 200 or more andit should meet at least once in
each quarter for making decisions which affectstheirday-to-day lifesuch as–
i. Levyingandcollectinglocaltaxes.
ii.Construction and maintenance of resources like – roads, school buildings,watertanksand
drainageetc.,and
iii. To execute government schemes with respect to generation of
employmentopportunitiesinvillagesandsoon.
iv. The main eligible criteria to be a member in Gram Sabha is-a person shouldattained
theageof18and havethevotingright.
v.Its main function is preventing the Panchayats from misusing money and/orfavouring a particular
group or religious or individual person. It also keeps aneye on the elected representatives to
monitor their services and to make themresponsibletothepeoplewhoelectedthem.
vi. Gram Sabha receives funds from the following three main sources for
theirdevelopmentprograms–
I. Amount collected fromhousetaxes,marketplacesetc.
II. FundreceivedfromvariousGovernment department schemes.
III. Donationsreceived forcommunity worksetc.
TechnologicalEnvironment:
The major three revolutions, Green Revolution in the agriculture sector, WhiteRevolution in the
dairy sector, Fibre Revolution in the textile sector and therole of Non-Government Organizations
were geared up many changes in thetechnologicalenvironment.
1. Green Revolution:
From the year 1967 to 1978, is termed as Green Revolution period. The mainmotive of the
government to initiate this program is to improve food grainproduction in India by using
advanced equipments and to attain self-sufficiencyintheareaoffoodproduction.
Somenotableeconomicresultswhich weregenerated bythisrevolutionare:

i. Crop areas under high-yield varieties required fertilizers,

pesticides,fungicidesandotherinputs.Farmequipmentslike tractorswithfarmimplements; diesel
pump sets, etc., introduced mechanization into the farmsectorforthefirsttime.
ii. The increase in farm production also introduced mechanized processing,spurringgrowth
ofthelocalmanufacturingsector.
iii. The modernization and mechanization of the farm sector boosted farmproductivity, triggered
industrial growth, created jobs and initiated a change inthequality oflifeinvillages.
2. White Revolution:
With the successful implementation of Green Revolution, the Governmentinitiated White
Revolution to achieve self-sufficiency in the area of milkproduction. The main motive of this
policy was, the producer cooperativesociety (producer cooperatives) should try to match urban
demand with thesupplyofruralproduce.
 It means, the producer cooperatives acts as a middleman in rural area forselling the rural
produce among the urban consumers. At the same time, thedemand for dairy products like –
ice cream, flavoured milk, yoghurt, butter,cheeseetc.,alsogrowninaconsiderablemanner.
Urbanization, changing lifestyle and food habits of people also played asignificant role for this
increased demand. This resulted in a big way of successintheareaofmilkproductionand
processing.
In India, most successful states in dairy development through producers’cooperative societies
are – Gujarat, Punjab, Haryana, western Utter Pradeshand Andhra Pradesh. If we compare the
results, nearly 80% of increase isaffected inthefieldof milkproduction fromalloverthecountry.
3. YellowRevolution:
To improve the production of oil seeds and its output (edible oil), Governmentinitiated Yellow
Revolution. This recorded a spectacular increase in both areas.The production was doubled from
11 million tonnes in the year of 1986-87 to22million tonnesin1994-95.
4. BlueRevolution:
Before 50 years, Indian fisheries sector produced 6, 00,000 tons of fish only. Toincrease the
overall quantity, India introduced Blue Revolution. Its main
focuswastoincreasefishproductioninsmallpondsandwaterbodies.
5. SomeOtherMajorRevolutions:
Nearly, 12 more revolutions also took place in India to improve production invarious sectors,
such as – petroleum, leather, cocoa, jute, cotton, honey,tomato,potato,eggand soon.
Revolutions:
I. BlackRevolution–PetroleumProduction
II. BrownRevolution–Leather/CocoaProduction
III. GoldenRevolution– OverallHorticultureorHoneyProduction
IV. GoldenFibre Revolution–Jute Production
V. GreyRevolution– FertilizerProduction
VI. PinkRevolution–Onion/Pharmaceutical(India)/PrawnProduction
VII. RedRevolution–MeatandTomatoProduction
VIII. RoundRevolution–Potato Production
IX. SilverFibre Revolution–CottonProduction
X. Silver Revolution–Egg/PoultryProduction.
6. TheNon-GovernmentOrganization(NGO)Movement:
Non-Government Organizations (popularly known as NGOs) and othervoluntary agencies play a
vital role in creating awareness, developing skills
andintroducingnewtechnologies,etc.,intheruralareas.
They identify the grassroots in those areas and introduce latest technologies
inthefieldsoffoodprocessing,naturalresourcemanagement,leatherprocessing, low-cost spindles,
weaving machinery, etc., to bring change in thelife of the rural people. Many Government
programs were implementedthrough NABARD, CAPART, KVIC and so on are fine-tuned with
the help oftheseorganizations.

SomeotherassistanceprovidedbyNGOsare:
i. Basichealthcareservices
 ii. Childcare services
iii. Educationandtraining

They also provide assistance to create awareness and develop skills

andintroducetechnologyetc.
Top 10NGOs-lndia:
i. HelpAge India-Rank1
ii. SangramSanstha-Rank3
iii. LepraSociety
iv. Deepalaya
v. Karmayog
vi.

Unit- 3
RELEVANCE OF MARKETING
MIX FOR RURAL CONSUMERS

Marketing mix comprises of various controllable elements like product, price, promotion and place.
Success of any business enterprise depends on marketing mix and these four elements are like
powerful weapons in the hand marketers.

Since behavioral factors of rural consumers are different and almost unpredictable in nature, the
marketers have a challenging task to design marketing mix strategies for the rural sectors. Due to
considerable level of heterogeneity, marketers need to design specific programs to cater needs and
wants of specific groups.

Product Mix- Product is a powerful tool of an organization’s success. The products must be
acceptable to rural consumers in all significant aspects. The firm must produce products according
to the needs and future demands of rural buyers. The product features like size, shape, color,
weight, qualities, brand name, packaging, labeling, services, and other relevant aspect must be fit
with needs, demands and capacity of buyers.
Product must undergo necessary changes and improvements to sustain its suitability over time. The
effectiveness of other decisions like pricing, promotion and place also depends on the product.

Price Mix -Price is the central element of marketing mix, particularly, for rural markets. Rural
consumers are most price sensitive and price plays more decisive role in buying decisions.
Pricing policies and its strategies must be formulated with care and caution. Price level, discounts
and rebates, then credit and installment faculties are important considerations while setting prices
for rural specific products.
Normally, the low-priced products always attract the rural buyers, but rarely some rural customers
are quality and status conscious.

Promotion Mix - Rural markets are delicately powerful to cater to the rural masses. The promotion
strategies and distribution strategies and Ad makers have learned to leverage the benefits of
improved infrastructure and media reach.
Most of the companies advertise their products and services on television and they are sure it
reaches the target audience, because a large section of the rural India is now glued to TV sets.
Marketers have to decide on promotional tools such as advertisement, sales promotion, personal
selling and publicity and public relations.
The method of promotion needs to meet the expectations of the market. Vehicle campaigns,
edutainment films, generating word of mouth publicity through opinion leaders, colorful wall
posters, etc. — all these techniques have proved effective in reaching out to the rural masses.
Village fairs and festivals are ideal venues for projecting these programs. In certain cases, public
meetings with Sarpanch and Mukhiya too are used for rural promotion. Music cassettes are another
effective medium for rural communication and a comparatively less expensive medium.

Different language groups can be a low budget technique and they can be played in cinema houses
or in places where rural people assemble. It is also important that in all type of rural
communication, the rural peoples must also be in the loop. The theme, the message, the copy, the
language and the communication delivery must match the rural context.
Eventually, the rural communication needs creativity and innovation. In rural marketing, a greater
time lag is involved between the introduction of a product and its economic size sale, because the
rural buyer’s adoption process is more time consuming.
Nowadays, educated youth of rural area can also influence decision-making of the rural consumers.
Rural consumers are also influenced by the western lifestyle they watch on television. The less
exposure to outside world makes them innocent and the reach of mass media, especially, television
has influenced the buying behavior greatly.
Place Mix - Rural market faces critical issues of distribution. A marketer has to strengthen the
distribution strategies. Distributing small and medium sized packets through poor roads, over long
distances, into the remote areas of rural market and getting the stockiest to do it accordingly.
Both physical distribution and distribution channel should be decided carefully to ensure easy
accessibility of products for rural consumers. Choosing the right mode of transportation, locating
warehouses at strategic points, maintaining adequate inventory, sufficient number of retail outlets at
different regions, and deploying specially trained sales force are some of the critical decisions in
rural distribution.
Normally, indirect channels are more suitable to serve scattered rural customers. Usually,
wholesalers are located at urban and semi urban to serve rural retailers. Not only in backward states,
but also in progressive states, local rural producers distribute directly to consumers.
For service marketing, employees of rural branches can do better jobs. Various sectors like banking,
insurance, investment, satellite and cable connection, cell phone, auto sales and services etc. — the
market for these sectors is booming in villages of some states in a rapid speed. Service industries
are trying to penetrate into rural areas by deploying specially trained employees and local rural area
agents.
Nowadays, online marketing is also making its place gradually in rural areas of the progressive
states. Marketers must design and modify their distribution strategies time to time taking into
consideration the nature and characteristics prevailing in rural areas, may be quite differently than
that of urban markets.

RURAL MARKETING STRATEGIES

Product Strategy
(a) Study Products:
Most of the rural consumers believe that heavier the item, higher the power and durability.
Examples- (1) Bullet motor cycle continues to be popular in villages due its ruggedness. Royal
Infield sells about 65 per cent of two wheelers in semi-urban and rural areas. (2) Ambassador car
continues to be popular in rural areas due to sturdiness, roomier rear seat and luggage space.
(b) Designing Products:
The companies can come out with new products or promote existing products to suit field
conditions in rural areas. Examples- (1) LG Electronics came out with a unique product for rural
market. It launched ‘Sampoorna’, India’s first TV with a Devanagari script on screen display. The
word Sampoorna meaning ‘Wholesome’ cuts across all linguistic barrier in our country. It is
affordable and aimed at semi-urban and rural areas. It can withstand power fluctuations and has sold
over one lakh 20″ TV in towns with a population of over 10,000. (2) Godrej has introduced a
refrigerator Chotukool for rural areas. (3) Chota coke in 200 ml packing priced at Rs.5/- has
increased the sale of coca cola in rural market.
(c) Small unit packing have been used for many consumer products. Examples- (1) Tiger brand of
biscuit is available at rupee one for a packet of four biscuits. (2) Ponds has gained market share over
the past few years by focusing on rural market and it has introduced 20 gm. talcum power. (3)
Cavin Kare studied rural buyer behaviour and introduced Chik shampoo in small sachet of 4 ml at
low price of 50 paise and (4) Rasna is now available in Sachet pack priced at Rs.1 each and one
sachet will make two glasses of soft drink. The product is available in a variety of flavours such as
mango, lemon, etc.
(d) Utility Products:
The rural people are concerned with the utility of the items rather than appearance/show. Examples-
(a) Philips has introduced Free Power Radio priced at Rs.995/- for the first time in India. The radio
requires no external batteries or electricity for operation. A one-minute winding of the lever runs the
radio for about 30 minutes, (b) HMT watches are popular for utility value.
(e) Branding:
Brand is a name, word, symbol, design or a picture or a combination of them used to identify the
product and distinguish it from that of the competitions. A brand name not only represents the
product but also conveys the quality of the product.
Examples:
(1) Tata Steel has branded its galvanised corrugated sheets as Tata Shakthi, a sign of power.
Similarly the galvanised corrugated sheet produced by Ispat Industries has been named as
IspatKavach .The brand name conveys strength, durability and toughness.
(2) Some of the brands that have created a lasting impact on rural consumers are Billy wali cell
(Eveready batteries- battery with cat as symbol), Lalsaboon (Lifebuoy). Ladkawala paint (Cattu-
Asiant paints Mascot), Nirma girl (Nirma detergent) Rishi (DaburChawanaprash), Parle baby (Parle
biscuits) and Coconut tree (Parachute), Amul (From Sanskrit word ‘Amoolya’ Meaning Priceless).
Peedhari Balm (Zandu Balm), DeshKaNamak (Tata Salt).
2. Pricing:
Price refers to exchange value of the product and includes- (a) Maximum retail price, (b) Discounts,
(c) Credit, (d) Terms of delivery and (e) Maintenance charges. Rural retailers generally require
credit and, therefore, product pricing has to be adjusted to meet their requirements.
(a) Low Price:
A rural customer is price-sensitive mainly because of his relatively low level of income and unit
price of a product will have an impact on sales. Pricing the product at a lower price really attracts
rural population for trying the products. Though rural incomes have grown in the past decade, the
money earned by the average rural consumer is still much lower than that of his urban counterpart.
A large part of the income is spent on the basic necessities, leaving a smaller portion for other
consumer goods. Examples- (1) Bharat Petroleum has introduced five kg gas cylinders to reduce
initial deposit and refill cost for rural consumers. The deposit for 5 kg cylinder is Rs.350/- against
Rs.700/- for 14 kg cylinder and refill cost is Rs.90/- against Rs.250/- for 14 kg cylinders. (2) Small
unit packs of shampoo, hair oil, toothpaste, biscuits and bathing soap.

(b) No-Frills Product:The production cost can be lowered by using less sophistication and rather
concentrating on sturdiness and utility of the product. Examples- 1. Maharaja Appliances Ltd., sells
a sturdy Bonus washing machine, without a drier for rural market at Rs.2,990/-. 2. The rural
markets operate on a price-value proposition. LC Electronics has knocked off some of the frills in
the products.
The idea is to give features that are absolutely indispensable. The rural consumer does not require
Colden Eye feature and therefore base models do not have this feature. Again not all consumers
need 200 channels and therefore they have provided 100 channels in the base model. Everybody
may not require a sound output of 350 watts and therefore they have given an output of 200 watts in
base sets. The rural consumer is value conscious. He will buy the product that gives value for
money.
(c) Refill/Reusable Packaging:
By giving refill packaging marketers can add value to the pricing of the product. Examples- Bourn
vita available in refill pack and detergents made available in reusable packaging.
(d) Credit Facilities:
Success or failure of crop depends upon climatic conditions. Favourable conditions give bumper
yields and unfavourable conditions result in very low yields, and, therefore, rural income is seasonal
in nature. The farmer requires credit for meeting cultivation expenses as well as running the family
between marketing of produce and the harvest of next crop.
He avails credit facilities from the village merchant for buying household necessities. The rural
retailer in turn requires credit facilities from the distributors of consumer goods. Many companies
extend credit to the village retailers to persuade them to stock the company’s products and push it in
the market.
(e) Discounts:
Discounts are offered to motivate the retailers to sell more of the companies’ products. A discount
of about 10 per cent is given on the maximum retail price in the case of fast-moving consumer
goods. Many Companies offer attractive additional discounts to motivate the retailer to stock the
products during off-season.

(f) Promotional Schemes:

Normally farmers purchase consumer durable items after the harvest of crops. Similarly, Diwali,
Pongal, Onam, Dassera, Id and Christmas are the festivals for buying household articles. Special
promotion schemes such as new product introduction scheme, festival offer by way of special
discounts, exchange offer i.e., taking back used consumer durables are aggressively promoted
during harvesting and festival seasons in rural areas for increasing sales of the products.

3. Place (Distribution):
Place refers to distribution of the product and includes distribution channel, area coverage, channel
remuneration, warehousing, inventories, banking and transportation.
Major obstacles to reach the rural customers are as follows:
(a) The distribution chain requires a large number of intermediaries and this increases the cost of
distribution
(b) Non-availability of dealers
(c) Poor viability of retail outlets due to low business volume
(d) Inadequate banking facilities.
(e) Interior villages get flooded during monsoon and only about 70 per cent of the markets are
connected by road and
(f) Transport and communication facilities are poor in villages.
Penetrating Interior Markets:
Many companies are making use of innovative as well as traditional channels to reach interior
markets and a few examples are given below:
(a) Satellite Distribution:
In this system, the company appoints stockists in important towns. These stockists are responsible
for placing orders with the company, receiving the stocks, sorting of stocks and supply the goods in
small lots to the retailers and merchants situated in rural areas and in and around the towns.
The stockist is given 15-30 days’ credit by the company. Over a period of time, along with increase
in business, some of the good retailers will be elevated as stockists. Therefore, many retailers hover
around a particular stockist. The advantage of this system is it enables the organisation to penetrate
interior markets. Example- Companies like Nestle, Marico, Eveready batteries have appointed
stockists to service the village merchants and the merchants are met at fortnightly/monthly intervals
through van operations.
(b) The Hub and Spokes Method:
In the rural areas, Coca-cola has developed Hub and Spokes method of distribution. In this method,
the manufacturer in the area appoints main distributors (Hub) in important markets. These
distributors, in turn, appoint sub-distributors (spokes) to handle smaller markets within the territory.
The sub-distributor supplies to the retailers and these retailers finally deliver it to consumers.
(c) Syndicate Distribution:
Companies selling non-competitive goods can join together and distribute the products through a
common distribution channel. Example- P&G has made use of the distribution channel of Marico
for selling their product.
(d) Project Shakti:
HLL has come out with a new distribution model with main objective to develop income-creating
capabilities of underprivileged rural women by providing a sustainable enterprise opportunity and
to improve rural living standards through health and hygiene awareness.
Typically, a woman from the Self Help Group is selected as a Shakti entrepreneur and receives
stocks Lifebuoy, Wheel, Pepsodent, Annapurna salt, Clinic Plus, Ponds, LUX, Nihar, 3 Roses tea,
etc. at her doorstep from the HLL rural distributor. She sells directly to consumers as well as to
small merchants in the village.
Each Shakti entrepreneur services 6-10 villages in the population range of 1000-2000 people. With
training and hand-holding by the company for the first three months, she begins her journey selling
the products door-to-door. Normally the entrepreneur has a turnover of Rs.10,000 to Rs.25,000 per
month and earns a profit of Rs.800 to Rs.2,000 a month.
(e) Melas:
Our country is a land of melas and we have religious (Kumbh Mela), cattle and commodity fairs
which are held for a day or even a week. Many companies have come out with creative ideas for
participating in such melas. The company can put up a stall and decorate the same with posters, cut-
outs and banners. A trained salesperson answers queries about products and services.
Lucky draws, surprise gifts and scratch cards can be organised to attract the people to the stall and
sell the products. Examples- (a) Kisan Mela in Ludhiana is an annual feature and companies like
Maruti have been able to book orders for cars by participating in this Mela, (b) Display and sale of
consumer goods.
(f) The Haats:
By participating in haats and melas, the company can not only promote and sell the products but
also understand the shared values, beliefs and perceptions of rural customers that influence his
buying behaviour. Weekly markets i.e., Haats are held regularly in all rural areas. The sellers arrive
in the morning in the haat and remain till late in the evening. Next day, they move to another haat.
The reason being that in villages the wages are paid on weekly basis and haat is conducted on the
day when the villagers get their wages. For the marketer, the haat can be an ideal platform for
advertising and selling of goods. Example- Tata salt, Parachute oil are promoted through Haats. The
wholesalers buy from urban markets and sells to retailers who sell it in Haats.

Rural Marketing Strategy

4. Promotion:
Though 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?
Considering the dynamics of rural market, uniqueness of rural customer and the distribution of
infrastructure, the marketer has to formulate an appropriate promotional strategy to reach the rural
population. The promotion media and methods could be broadly classified into Formal media and
Informal/Rural Specific media.
Promotion Media #
(A) Formal Media:
Reach of formal media is low in rural households (Print- 14 per cent, TV- 36 per cent, Cinema- 16
per cent, and Radio- 18 per cent) and, therefore, the marketer has to consider the following-
(1) Local Language Newspapers and Magazines:Local language newspapers and magazines are
becoming popular among educated families in rural areas. Examples- Newspapers- Eenadu (A.P.),
Dina Thanthi (Tamil Nadu), DainikBhaskar (North), Anand Bazaar Patrica (West Bengal) and
Loksatta (Maharashtra) are very popular in rural areas.
(2) Television:
Television has made a great impact and large audience has been exposed to this medium. Regional
TV channels like Alpha Punjabi, Alpha Marathi, Surya, Eenadu and Sun have become very populat
in rural areas. Example- Dabur promotes Vatika brand of shampoo through local TV channels such
as Alpha Marathi, Surya TV
(3) Radio:
Radio reaches large population in rural areas at a relatively low cost. The farmers have a habit of
listening to Regional news/Agricultural news in the morning and late evening. The advertisement
has to be released during this time to get maximum coverage in rural areas.
(4) Film:
Viewing habit 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. Examples- (a)
Advertisement films on Lifebuoy soap and Colgate toothpaste are regularly shown in rural cinema
theatres, (b) A telegu film “Nee Premakai” has been shown in rural theatres to ensure top of the
mind salience of Bata in the minds of people
(5)Direct-Mailadvertising:
Direct-mail Advertising is a way of passing on information relating to goods or services for sale,
directly to potential customers through the medium of post. It is a medium employed by the
advertiser to bring in a personal touch. In cities, lot of junk mail is received by all of us and very
often such mails are thrown into the dustbin whereas a villager gets very few letters and he is
receptive to such mails.
The mailing list has to be updated on a yearly basis. The message should be in local language and
should contain pictures and local phases. Example- Mails in Regional Languages for promoting
Insurance, Seeds and Pesticides.
(6) Wall Painting:Wall painting 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 company need
not have to pay any rent for the same in rural areas. The matter should be in the form of pictures,
slogans for catching the attention of people.

IMPORTANCE OF BRANDING, PACKAGING AND LABELLING

BRANDING IMP-
• Identification
• Local media more and less of mass media
• Generates goodwill
• Market share
• Loyalty
• Promotes new distribution
PACKAGING AND LABELLING IMP-
• Brand difference is less
• Options is less
• Competition is less
• That’s why companies are shifting focus in rural market
• Tomorrow’s market
• Better than cut throat competition
• Price selective
• Product differentiation based on utility
• Emotionally balanced
NATURE OF COMPETITION IN RURAL MARKETS-
• Brand difference is less
• Options is less
• Competition is less
• That’s why companies are shifting focus in rural market
• Tomorrow’s market
• Better than cut throat competition
• Price selective
• Product differentiation based on utility
• Emotionally balanced
PROBLEM OF FAKE BRANDS
 Fair and lonely
 Likebuoy/ likeboy
 Illiteracy
 Ponds to bonds
Types of fake brands-
a) look-alike- same packaging but name diff
 b) Spell-alike- paracute to parachute
Duplicates- exact copy
WHY PEOPLE BUY FAKE-
 Affordable
 Famous in low income countries
 Travel abroad duplicates are common
 Fun
REASONS FOR INCREASING FAKE PRODUCTS-
 Heavy profit
 Low income group
 Low literacy
 Lack of awareness
 Lack of enforcement of law
 availability
PROBLEMS BY FAKE PRODUCTS-
• Loss of faith
• Original companies get less profit cuz of low sales
• Loss of original companies reputation
• If edible are fake, can create health problems
Segmentation, targeting and positioning for rural marketing
Segmentation can be done based on-
• Geographic-
• Demographic- income, education, lifestyle, gender, marital status, family size,
occupation and religion
• Psychographic- social class, personality, life style
• Behavioral- occasion, benefit sought, status, usage
TARGETING
• Evaluation and setting the target market
• Selecting-
 Undifferentiated marketing- targeting whole market with one offer. Ex- coca cola, maggi.
 Differentiated marketing
 Niche marketing- sub segmentation
 Micro marketing- for individuals, one to one marketing, customization
POSITIONING
 To set image, perception
 Positioning on- feature, benefits, occasion, against competitor, quality, price
 Identify the unique features
 Selecting the differences that have competitive advantages
 Communicating the advantages to the target audience
UNIT 4
PRICING STRATEGIES
Pricing strategy can help a company use pricing to achieve its goals, such as achieving penetration,
market share or profits. However, much of the pricing theory fails in rural marketing.
This is because companies have to work around low purchasing power, availability of local brands
that are priced cheaply and price points that are convenient for customers. That is why, prices for
rural markets must fit market conditions and satisfy the need for affordability. In addition, the
pricing must cover costs, which are quite high in rural markets.
Some of these methods are:
o Cost-Based pricing.
o Value-Based pricing.
o Demand-Based pricing.
o Competition-Based pricing.
1. Cost-Based Pricing:
Cost-based pricing policy rests on the principle of recovering all costs in manufacturing and selling
a product. It is a pricing method in which a fixed sum or a percentage is added to the total cost of
producing and selling a product to arrive at its selling price. The company thus recovers the costs
incurred and achieves a profit as well. This method is simple and is based on internal information
from financial and accounting records to give a figure of fixed costs (FC) and variable costs (VC).
Cost-based pricing can be represented as a simple equation:
Selling price = (FC + VC) + Mark-up
In rural markets, apart from FC and VC, the cost of selling and distribution must be added. These
are often hidden and difficult to calculate. They are also very high, because economic modes of
transport do not exist. As a result, cost-based pricing method does not work in modern market
conditions. It may lead to high prices in weak, scattered markets, making the effort of selling
difficult. Moreover, in rural markets the challenge for companies and brands is to establish
themselves.
A purely cost-based pricing may lead to high prices that turn away rural consumers. By bearing in
mind the prices they can charge and the costs they can pay, companies have to determine whether
their costs will enable them to compete in low-cost markets where customers are concerned
primarily with price, or find richer customers in the premium-price market in which they are
primarily concerned with quality and features.
2. Value-Based Pricing:
Value-based pricing is a method in which price is set on the basis of the value perceived by the
customer in buying and using a product. The perceived value of a product is the sum of attributes
and psychological value. Consumers derive value from a product or service from their needs,
preferences, expectations and desires. The job of a manager is to find out from customers and
research the market to determine how value is placed on a product or service.
Value-based pricing is a psychological pricing strategy. Value in the minds of the consumer is
achieved by creating desire by product attributes, advertising or adding status to products. Value
has to be communicated and this is not so easy in rural markets. Much of communication and
consumer engagement has to be done directly by companies in the absence of mass media. Except
for high-end brands, rural consumers are more likely to be swayed by functional benefits than by
features that merely enhance aesthetics.
3. Demand-Based Pricing:Demand-based pricing follows the classic demand curve taught in basic
economics classes; it simply means that if prices are low, demand will be high and vice versa.
Demand-based pricing focuses on the level of demand for a product or service, not on the cost of
materials or of making it. According to this policy, companies try to assess demand at different
prices, or the amount of products or services they can sell at different prices.
Some companies, selling luxury or aspiration goods, limit supplies in order to sell their products at
high prices. Others, dealing with mass production goods, use pricing policy to sell goods at low
prices and hope to achieve volumes because of that. Production and sales are based on these
calculations.
However, it is quite difficult to estimate demand of any product based on different price levels,
more so in villages. Estimating demand in rural areas is even more difficult than in urban areas,
because a host of factors are at play, many of which are simply not apparent.
4. Competition-Based Pricing:
Competition-based pricing is relatively simple, because the company sets its prices by looking at
prices of similar products offered by competitors. Prices of competing products are used as a
benchmark for setting prices.
Once prices of competitors are known, the company may decide any of the following three
strategies:
i. Pricing at Par with the Competition:
The company chooses to price its products exactly at the same price as competitors. For instance, if
a cold drink is being sold at Rs. 25 per bottle in a market, a competing manufacture will also price
its product at Rs. 25 per bottle.
ii. Pricing above the Competition:
The company sets a price higher than its competitor by highlighting the superiority of its products
over those of others, hoping that customers would like to buy their superior or longer lasting
product.
iii. Pricing below the Competition:
The company prices its products lower than those offered by competitors hoping that customers
might like a cheaper product than other, more expensive but similar products.
In competition-based pricing, the company does not consider its costs of manufacturing and selling
or the demand of the product, but only prices of similar products.
Each of the mentioned strategies has advantages and disadvantages. For instance, while pricing at
par, the company must have a similar cost structure as that or the competitor. If the costs are higher,
competition-based pricing will lead it to ruin. This method is fraught with another danger—if a
company prices its products at par with local brands, it will impact consumer perception –
consumers will perceive its products being of the same inferior quality as the local brands.
While pricing above the competition, the company runs the risk that customers may turn away from
expensive products. Pricing below the competition carries the risk of a price war—if the competitor
also reduces prices, the company is forced to reduce prices even further, which could lead to losses.
In rural markets, competitors are usually low-cost local brands. Pricing at par or below the
competition is almost impossible for big brands, which have higher costs. Such brands have to
compete on communicating value rather than price. Innovative strategies have to be thought of
rather than competing on price.
However, competition-based pricing policy is easy since competitor prices are easy to find,
allowing companies to set prices quickly and with little effort.
OBJECTIVES OF PRICING POLICIES
(i) Achieving a Target Return on Investments:
This is the most important objective which every concern wants to achieve. The objective is to
achieve a certain rate of return on investments and frame the pricing policy in order to achieve that
rate. For example, the concern may have a set target of 20% return on investment and 10% return
on investments after taxes. The targets may be a short term (usually for a year) or a long term. It is
advisable to have a long term target.
Sometimes, it is observed that the actual profit rates may be more than the target return. This is
because the targets already fixed are low and new opportunities and demand of the product
exceeding the return rate already fixed.
(ii) Price Stability:

This is another important objective of an enterprise. Stability of prices over a period reflects the
efficiency of a concern. But in practice, on account of changing costs from time to time, price
stability cannot be achieved. In the market where there are few sellers, every seller wants to
maintain stability in prices. Price is set by one producer and others follow him. He acts as a leader
in price fixation.
(iii) Achieving Market Share:
Market share refers to the share of the company in the total sales of the product in the market. Some
of the concerns when introduce their product in the competitive market want to achieve a certain
share in the market in the initial stages. In the long run the concern may aim at achieving a sizeable
portion of the market by selling its products at lower prices.
The main objective of achieving larger share in the market is to enjoy more reputation and goodwill
among the people. The other consideration of widening the markets by lowering prices is to
eliminate competitors from the market.

(iv) Prevention of Competition:

Modern industrial set up is confronted with cut throat competition. Pricing can be used as one of the
effective means to fight against the competition and business rivalries. Lesser prices are charged by
some firms to keep their competitors out of the market. But a firm cannot afford to charge fewer
prices over a long period of time.
(v) Increased Profits:
Maximisation of profits is one of the main objectives of a business enterprise. A firm can adopt
such a price policy which ensures larger profits. However, such enterprises are also expected to
discharge certain social obligations also.
Recent Trends & Innovation in Rural Marketing
Following are innovation and recent trends in rural marketing, which give a new dimension to
the rural market and rural consumers.
 Huge population
 Green revolution
 Smartphones
 Increased education level
 Increased employability of rural youth
 Enhanced purchasing power
 Government Incentives and policies
 Media
 IT penetration
 Brand conscious
 Objectives of Rural Marketing

INNOVATIVE PRICING METHODS IN RURAL MARKETING

I. Rural Market Segmentation

 The first and most important strategy of rural marketing is the proper segmentation of the
rural market.
 In this process, a potential rural market is segmented into distinct sub-markets of
consumers with common needs and characteristics.
 Rural market segmentation is the initial stage of implementing a rural marketing strategy.
 Once the segmentation is done, the marketer targets the identified customer groups with
the appropriate marketing mix so that the target segments can perceive the company’s
product/brand.
 Market segmentation is a method of obtaining a maximum market response from limited
marketing resources by recognizing differences in the response characteristics of different market
segments.
To get started, the organization can do the following:
 Focus on selected markets
 Concentrate on selected makes
 Focus on selected villages
2. Competitive Strategy
( a) Supplier – In this process, marketers have to focus on supplies. For this, the brands not only
produce high-quality products but also sell them reasonably.
( b ) Customer Power – With increased literacy, the advent of television, promotional efforts
and increased exposure to urban markets, rural consumers have become more knowledgeable and
empowered about products than ever before. Therefore, markets must offer good quality products
to meet their needs effectively.
(c ) Potential Entrants – Rural marketing companies in India operating in the rural market
should work to remove entry barriers by first living there and build good relationships with
retailers so that new entrants are less likely to arrive and survive.
( d ) Alternative Products – Due to high levels of illiteracy, low awareness and dependence on
retailers in rural areas, counterfeiting is prevalent, and alternatives flourish. Hence the company
should have an adequate strategy to counter this menace so that millions spent in the brand
building are not wasted. Companies have to ensure the education of rural consumers through
packaging, promotion, and brand recognition to get exactly what they want.
( e ) Competitor – The nature of rural marketing competition is very different from that in the
urban market. Thus, the competitive strategy concerning the rural market differs on almost all
five forces, which suggests that the strategic approach required for the rural market is very
different from the approach adopted in the urban market.

3. Product Strategy
Product strategy in rural marketing is an essential step for good marketing. So, for this, check out
the points mentioned below:-
 Understand product value
 Packaging
 Branding
 Logos & Symbols
4. Pricing Strategy
 Companies must price their products competitively and provide maximum value for
money spent in their rural areas.
 Indian companies can do this by creating an aggressive cost structure. Redesigning of
products for the rural market should be done to maintain a low cost of products.
 Refill packs are an excellent example in this case.
5. Advertisement Via Hoardings & Wall Paintings
 Advertisement through hoarding is quite an old and effective way of branding. And it
sounds strange that it is the best option for rural marketing.
 In this process, the marketer or adviser put hoardings on the side of the road.
 Apart from hoarding, wall painting is most effective in rural areas for branding.
 Markets and advertisers decide the design of wall painting. Then, it is handed over to a
local artist to complete the artwork of the layout.
 The rural area of India prefers to live in simplicity and traditional values.
 Thus, wall painting is a sure way of attracting the attention of the people of the village.
 So, if you want good product branding in rural markets, then this method is best for you.
6. Mobile VAN
 Videos and audios create a more impactful impression for anything. Similarly, these
mediums create highly affected impressions of brands in rural areas. So, for rural marketing,
mobile vans must be a good option.
 Mobile vans also work to spread the brand’s image and message across multiple locations
in a single day in a single village or even in several villages.
 Placing leaflets, flyers and product samples in the mobile van will further enhance the
brand’s image among the local people.
7. Kiosk Setup
 When branders want one-on-one interaction with rural people, then kiosk setup is one the
best ways or rural marketing strategies.
 For this, you have to set up the kiosk in the popular areas of the village like a post office,
the marketplace, near a high school, etc., to attract them. Then, as a result, they will be
influenced to reach the kiosk out of their curiosity.
 Kiosk setup also helps you to have a detailed conversation with potential consumers about
the brand. This, in turn, helps in building a solid image of the brand among the villagers.
 Distribution of leaflets and flyers, product/service display and sampling, goes a long way
in strengthening the brand’s reach.
8. Shop Branding
 Shop branding is another best strategy to make your brand popular among rural people.
 In this process, you have to advertise your brand in and around the village shop, which
will create an immediate response between the rural consumers.
 Shop branding in rural marketing is the same as mall advertising in cities.
 Advertisement of a brand near a retail outlet induces the customer to buy the product out
of curiosity.
 Thus, it is a very impactful way of rural marketing.
9. Fairs (Melas) & Events
 Melas or village fairs are the most anticipated events in the village.
 These village fairs or events are held in the various festivals that locals observe.
 Almost the entire village and the crowds of the surrounding villages participate in these
fairs.
 Hence, putting up a stall in these fairs is a prudent way to draw the attention of a village
towards a brand.
These rural marketing strategies help the brands to reach rural markets efficiently. Many brands
are available in India that want to take a position in the rural market because this market is vast
and now a developed market. Nowadays, most marketers, whether old or new, want to enter this
market. So, if you are one of them, you have to follow these rural marketing strategies and ways
mentioned above.

UNIT-5
DISTRIBUTION STRATEGIES FOR RURAL CONSUMERS
DISTRIBUTION STRATEGY
A distribution channel is normally envisioned as a series of intermediaries, who pass the product
down the chain to the next entity, until it finally reaches the consumer or end-user. Every element of
the chain has its own specific requirements, stimulus and ability to deliver in a unique operating
environment, which the producer must take into account, along with those requirements of the end-
user. Latest innovations in rural distribution models have expanded the role of the distribution
partner. The distributor-role is no longer restricted to physical distribution of products alone, but
has also expanded to provision of several other inputs, which influence a consumer’s purchase
decision, such as credit and post-sales service.

Challenges of Distribution Strategy

The challenges of distribution strategy are as follows:
 Large number of small markets
 Dispersed population and trade
 Poor road connectivity
 Multiple tiers
  Poor availability of suitable dealers
 Low density of shops per village
 Inadequate banks and credit facilities
 Poor storage system.
 Low investment capacity of retailers
 Poor visibility and display of products on rural shop shelves.
 Poor communication of offers.
Distribution Strategy
Distribution strategy is explained in the paragraphs below.
Ensuring reach and visibility
The thing which is important is to get the Stock Keeping Unit right, as rural retailer can’t afford to
keep many different SKUs. Being first on the shelf in the product category and develop a privileged
relationship with the retailer is a source of competitive advantage to consumer goods companies, in
such an environment.
Reaching up to mandis, towns, semi-urban centres
Organisations can cater to rural requirements for consumer durables, clothes, kitchen equipment and
agri-input by making their products available up to feeder towns, semi-urban centres or mandis.
Targeting larger villages
There are just 85,000 large villages out of more than 6, 38,000 villages. However, they have 40% of
the rural population and 60% of total consumption.
Understanding of peak seasons
Peak season times in rural parts are harvest, festivals and marriage seasons. Bulk of the demand for
the consumer durables is concentrated during these times. The rural consumers have the cash at this
time for shopping and are willing to buy. Organisations have to ensure that their products are
available at these times.
Collaboration for distribution
Organisations with comparatively lesser distribution reach can work together with organisations
that already have achieved high penetration levels in rural areas. E.g., P&G had tie-ups with Godrej,
Marico Industries and now it’s planning one with Nirma for distribution of soaps.
Converting unorganised sector manufacturers into distributors
Small-scale manufacturers have good knowledge of the territory and have good sales network.
Organisations like Exide are attempting to change these small-scale manufacturers to become their
dealers.
Company’s own distribution network
Project Shakti of HUL is the example of a company’s own distribution network.
Distribution Channels in Rural India
Distribution channels in rural India are discussed in the paragraphs given below.
Use of cooperative societies
There are more than 4 lakh co-operatives operating for different purposes like credit, marketing and
dairy cooperatives in rural areas. E.g., for rural consumers Farmers Service Co-operative Societies
function like a mini super market, where they sell soaps, detergents, cloth, fertilizers, seeds,
pesticides, etc., at economical and reasonable prices. As these societies have necessary
infrastructure for storage and distribution, companies may contact these societies to sell their
products.
Use of public distribution system
The public distribution system is well organised in India. There are about 4.37 lakh fair price shops
operating in the country. As the PDS outlets cover the entire country, they can be utilised for
marketing consumable items and low value durables in rural areas.
Utilisation of petrol pumps
These petrol pumps, in addition to petrol/diesel, oil and lubricants are also selling consumables,
such as soaps, detergents, biscuits, etc., particularly on the highways. These bunks may also think of
stocking certain consumable agricultural inputs like fertilizers, seeds and pesticides.

Agricultural input dealers

In the country, there are about 2, 62,000 fertilizer dealers. Most of the dealers don’t have business
during off season; hence the companies may try to motivate them, so that they can sell other
products also during their free time.
Shandies/Haats/Jathras/Melas
Shandies are periodic markets which operate in a weekly cycle. They offer a ready distribution
network and are cheap, steady and appropriate. ‘Haats’ can be effectively used for demonstration;
distribution and sampling of the daily need products. ‘Melas’ work best for introducing new brands
and building brands through the organisation of events at the venue.

Haats/Shandies
Haats are the periodic markets and the oldest marketing channel in India. These markets
provide people an opportunity not only to purchase consumer goods, but also to sell surplus
agricultural and allied products. They provide a first-contact point for villagers with the
market, a means for distributing local products and exchanging rural surplus, an opportunity
for buying daily necessities as well as farm supplies and equipment and a place for social,
political and cultural contact. Each haat caters to the need of a minimum of 10 to a maximum
of 50 villages, drawing around 4000 persons who come to buy and sell a range of daily
necessities and services

Public Distribution System (PDS)

PDS is a system of distribution for necessary commodities to a large number of people through a
network of FPS (Fair Price shops, often referred to as ‘ration shops’). The commodities are rice,
wheat, sugar, edible oil and kerosene. PDS has been evolved to reach the urban as well as the rural
population in order to protect consumers from the fluctuating and escalating price syndrome.
It has emerged as a major instrument of the Government’s economic policy aimed at ensuring
availability of food grains to the public at affordable prices as well as for enhancing food security
for the poor. PDS has a network of about 4.76 lakh. FPS is the largest distribution network of its
type in the world.
HUL's Project Shakti Project Shakti is HUL's smart way of reaching 10 lakh homes directly in the
villages where traditional distribution system cannot hope to enter through the use of Self Help
Groups (SHGs). The project was started in 2001 in 50 villages involving women belonging to
micro-credit SHG in the Nalgoda District of Andhra Pradesh. 50 SHGs were selected. These SHGs
were covered by three Mutually Aided Cooperative Thrift Societies (MACTS). Each MACTS had
14 to 15 SHGs under them. HUL along with a social service organization, Marketing & Research
Team (MART), assisted the women in getting micro-credit to set-up an enterprise to distribute
HULs range of products. HUL selected a woman from an SHG as Shakti entrepreneur to start an
enterprise with an initial loan from her SHG. After three month training, each woman began serving
6 to 10 villages having population of 1000 to 2000. HUL delivered stocks at her doorstep. From
there on, she had to supply to village retailer as well as sell directly to consumers. She would pocket
different profit margin for each different sale
ITC’s ChoupalSagarChoupalSagar, a farmer’s Mall of ITC, is a place where the rural consumer gets
almost all of his requirements under one roof. From clothes, FMCG goods, watches, home
furnishings and consumer durables to automobiles to tractors, pumping sets, fuel, pesticides, seeds
to health care, retail banking to restaurants and much more are available in the Sagars.Initial
investment in each shopping is Rs 5crore (Rs 50 million). Till now ITC is able to setup only 24
ChoupalSagars across Madhya Pradesh, Uttar Pradesh and Maharashtra.
ITC Choupalsagar model can concentrate only to selected areas, the expansion of such type of store
becomes problem due to high setup cost. The HUL project shakthi model can cater only at the
micro level with limited product choice for the customers.

IDEAL DISTRIBUTION MODEL FOR RURAL MARKETS

Devising a robust approach to the last mile

To reach India's rural markets, rural masters adopt a multipronged approach to reach the rural
fragmented markets. They mix and match their channel strategies as needed - switching among
strategies that may include a centrally directed hub-and-spoke model and a reliance on village
entrepreneurs, or "feet on the street." Take two-wheeler manufacturer Hero Motors, which added
authorised representative dealers to its existing hub-and-spoke network. Appointed by dealers, the
representatives make it easy for locals to buy bikes and get them serviced. This new role added
5,000-plus touch points to Hero's channel strategy, enabling the company to extend its reach to 20
percent of India's six lakhs villages.

ITC, on the other hand, uses four distribution approaches to reach the last mile - traditional
distributor vans to serve customers directly; sub-distributors in defined geographies to provide
intensive distribution focus; direct reach through two- and three-wheelers to seed activities in
villages with high market potential. Finally, ITC leverages its well-known parallel sales and
marketing platform known as eChoupal and ChoupalSagars for consumer activation activities.

Companies are also adopting channels that are mostly used in urban markets. E-commerce is a
prime example. According to the eBay India Census, one out of every 10 purchases, and one out of
every 20 sales are from rural India, with almost 1,270 rural hubs transacting online. In the future,
the online channel can become a game changer for companies trying to access rural markets. It can
provide a costeffective means to extend a company's reach exponentially by overcoming geographic
barriers.
Focus on market expansion

Rural masters identify specific customer segments - clusters of villages and consumer groups - they
want to target for penetration. A few big clusters centred in four or five large states can have the
same market potential as a large number of clusters dispersed across the country. Setting priorities
helps leading companies deploy sales people effectively and tailor their marketing strategies. They
use detailed market scanning and segmentation to understand important nuances across clusters and
spot the best opportunities.

For instance, when Maruti made its initial foray into rural India in 2007, it identified many small
clusters for potential car sales, including turmeric farmers in Tiruchengode in Tamil Nadu and apple
growers in Himachal Pradesh. Today, these clusters generate consistent sales. According to
company data, many clusters buy 35-50 vehicles per month-and that number doubles during harvest
time. Rural masters also use new technologies to build a complete picture of their target clusters.
Consider consumer products giant Dabur. The company uses GIS tools to analyse its own and
rivals' market penetration. It then integrates economic and geographic data to identify opportunities.
The company defines a new cluster of markets every month that its distribution network is expected
to cover. And it uses route mapping to define van routes as well as criteria for selecting distributors.
Rural sales representatives cover villages in a 60-mile radius from Dabur's headquarters. The
company supplies them with inexpensive tablets that track their daily activity and provide
information on van routes, work schedules, and order status.

Forging sustainable channel relationships

The hotter the competition in rural markets, the more crucial channel relationships become. Yet
many aspiring channel partners don't have the scale and capabilities needed for success in rural
India. Companies compete fiercely to snap up the good ones, only to see partners get lured away by
rivals promising bigger, better deals.

To overcome these challenges, rural masters work hard to engage their partners and keep them
loyal. They start by demonstrating their commitment to building mutually beneficial relationships.
Many provide training to their partners. For example, they may teach them advanced selling and
promotion techniques.

Others outfit their partners with infrastructure to make them even more valuable. Mahindra, the
world's largest tractor company, is a case in point. In 2007, the company set out to transform its
channel partners from mere tractor dealers into real partners for farmers. It redefined its dealerships
as "SamriddhiCentres" to emphasise how they can spread prosperity. Using initial investments of
about $7,500 from the dealers, Mahindra upgraded the dealerships' infrastructure so they could
provide farmers with information on weather, crops, pests, agricultural market locations, and prices;
offer soil- and water-testing facilities; and run farm-productivity demonstrations. These offerings
attract farmers to the dealerships and boost the odds that they'll become loyal Mahindra customers.
Through 155 SamriddhiCentres, Mahindra has helped more than 150,000 farmers, and it aims to
boost that number to 10 million by 2020.
Some rural masters also build familial bonds with their channel partners to strengthen trust and
loyalty.

For example, dairy cooperative Amul invites its channel partners to the company's headquarters.
During these visits, partners gain exposure to Amul's network of cooperative institutions and visit
the company's plants. The programme wins partners' trust and loyalty by establishing a personal
bond with partners.

Poor infrastructure and fragile channel relationships often frustrate companies' efforts to seize the
growth opportunities arising in rural India. But as Accenture's research on rural masters reveals,
companies can overcome the challenges by using the right channel strategies, understanding their
target customers, and finding and keeping the best channel partners.

PROMOTION STRATEGY

Personal Selling
It is a process of face to face interaction between the salesperson and the prospective customer.
Through a proper training and guide, a salesman can be a valuable medium between the marketer
and the prospective customer.
A good salesperson is the one who has thorough knowledge about the product he is about to sell
and tries to strike a common point of link between the product and the customer needs.
Personal Selling in Rural Region
Most of the marketers think personal selling is not feasible in rural areas because of various reasons
ranging from scattered population to a large number of villages to be covered.
Though still not a prevalent practice adopted by the national level marketers, personal selling is
widely done by the local manufacturers of utensils, garments, edible good etc.
For the marketer to adopt personal selling as a tool of promotion in rural area, following are few of
the basic requirements that need to be present in their salesperson −
 Familiarity with the Rural Area − It is difficult for the salesperson to be familiar
with rural area. As the population of rural region is scattered, it becomes a lot more important
for the salesperson to have sufficient knowledge about rural area which he is supposed to
cover.
 Proficiency in Local Language − Fluency in the local language is another key skill
that must be present in the salesperson. It acts as a major communication point in converting
prospective customer into an actual one.
 Acquaintance with the Rural Folks − It is a common tendency among rural people
that they only pay attention to those people whom they can consider as a part of their social
group. Thus, if the salesperson belongs to the particular rural district, in that case his job not
only becomes easy but also chances of success in achieving his sales target increase strongly.
  Be Persuasive but not Pushy − A good salesperson is one who is persuasive but not
pushy in nature. Rural people are always skeptical in nature about the new product and
strongly hesitate to purchase it due to lack of faith.
Here a salesperson needs to remove the doubts of the prospective customer and make him
believe to purchase the product. But being too pushy in his approach can ruin the chances of
sale of the product.
 Public Relations − Public relations in case of marketing promotions in case of rural
areas are highly important so as to create the formal relationship with the newly acquired
customers. Also, dissemination of information concerning the rural folk is possible only
through effective public relations.
Educating rural people about the importance of administering polio drops to children, vaccination to
mother and child, sanitation, hygiene etc. has become possible only through the publicity health
campaigns.
Sales Promotion
It is a short term tool adopted by the marketer to increase the sales of the particular product / service
in a particular area for a particular period of time.
According to marketers, sales promotion includes those sales activities that supplement both
personal selling and advertising, and coordinating. It also involves making the advertisements
effective, such as displays, shows and exhibitions and demonstrations.
Types of Sales Promotion
The following are the different types of sales promotion −
Push-up Sales Promotion
It is the technique where marketers persuade third parties i.e. intermediaries like dealers, retailers
etc. to stock the products of the respective company and push them towards the ultimate customers.
Marketers started providing various incentives, pop material etc. to the intermediaries which
encourage them to sell the products to the customers. To increase product sales ratio push-up sales
promotion is the important part of promotion efforts taken up by the companies.
In case of rural marketing the companies also follow push-up sales promotion strategies. The
commonly followed push-up sales promotion strategies include –
 Free display materials − Free display materials like banners, sign boards, neon lights
etc. are distributed among dealers to attract and inform the customers about the products.
 Storage materials − Storage materials like racks, shelves, refrigerators etc. are
distributed among shopkeepers who help in visual merchandising and also aid in storing the
product.
 Demonstrations − Important technique of push-up sales promotion, free demos at
dealers’ shops inform the consumers about the handling of the product.
 Incentives to dealers − Under the push-up sales promotion special incentives are
provided to dealers on the number of units sold to the ultimate consumers.
 Lucky draw contest − It is to motivate dealers to stock the company’s products and
promote sales, and lucky draw contest are organized among dealers.
  Free gifts − It is a common strategy adopted by the companies and free gifts are often
distributed among dealers during festive seasons to increase the consumer base.
 Pull-up sales promotion − As the name suggests, pull-up sales promotion is the tool
where marketer pulls the customers towards their product through various promotional
strategies and advertising.
Customers come through schemes like Buy 1-Get 1 Free, discounts, exchange offers etc. These
schemes attract customers towards the product and the customers end up purchasing the products.
In context of rural marketing, the following pull-up sales promotional strategies can work well −

Free Distribution of Samples

Distributing free samples among rural people not only popularize the product but also gain huge
acceptance among them. When the company decides to enter into new market and launch the new
product, in such cases free distribution of samples is an effective pull-up sales promotional activity.
As compared to urban consumers, the tendency to try the new product is low in case of rural
consumers because they have lack of faith about the new products. Free samples encourage trial
purchase among consumers.

With-pack Premiums
Here, a free product is given either inside the pack or outside the pack. This attracts the rural
customers to purchase the product. This is successful only when the free product is either
complementary or useful to the consumers. For example, a free toothbrush that comes
complementary with toothpaste.

Price-off Premiums
This refers to the cut-price technique for a product. This is useful not only in case of FMCGs but
also in case of consumer durables if the discount is appropriate.

Money Refund Premiums

It refers to the price of the product, which is partially refunded to the consumers on the repurchase
of same product by showing of proof of previous purchase like cash memo, empty wrapper, poly
packs etc.

Exchange Premiums
It is quite similar to the above strategy, under which instead of refund of money a new product is
given to consumers on showing of proof of previous purchase.

Interactive Games
Innovative fun-filled games generate interest among the rural crowd. The winner of the game can be
rewarded with the product of the company which sponsored such games. Sometimes such games
ensure high customer involvement and also increase the interaction between the marketer and target
customers.
Fairs and Exhibitions
Fairs are a part of rural people’s life. For the rural people, they are the source of entertainment and a
good opportunity to launch their products for the marketers in the rural market. It has mass appeal
as several villagers come to fairs.
Customers may be attracted by using the mass media like organizing folk songs competition, folk
dances, magic shows, puppetry shows, street theatre, acrobatic skills, juggler, etc.

Another important thing is the use of vibrant colors in the company’s stalls. This pulls the
crowd towards buying the product.

Village Haats
Haats are the weekly markets from where rural people buy the items of daily necessities, garments,
farm inputs etc. They are the source for rural people and a place of social gettogether. The existence
of haats can be traced back to ancient times — the times of Chandragupta Maurya.
Haats provide to the marketers an opportunity to display their products. Consumers are ready to try
the product by overcoming all inhibitions and can get the touch and feel of the product and this will
further generate sales as most of the people come to the haats with an intention to buy.

Melas
Melas are again the essential element of India’s culture and pull masses. In a trade mela, one can
find variety of products. Melas are held usually in festive seasons like Dussehra, Diwali, Holi, Eid
etc.
During melas, marketers get to interact with a large number of consumers and encourage for trial
purchase. These melas help the marketers target large audience.

Mandis
Mandis are the place for agricultural produce and inputs. Mandis can be a good platform for
manufacturers of agri-inputs ─ both durables and non-durables. Durable are tractors, pump sets,
threshers etc. Non-durable includes seeds, fertilizers etc.

DESIGNING PROMOTION MIX

1. Advertising: Companies pay to advertise their service or product to a high number of people at
the same time. Common forms of advertisements include ads in television, newspapers, direct mail,
radio, magazines or online.

2. Sales promotion: Sales promotions are short-term incentives to encourage people to buy a
product or service. Examples include coupons, rebates or games and contests that the public can
participate in.
3. Public relations: This type of promotion communicates a company’s services and image to the
public. Examples can include news conferences or press releases.

4. Direct marketing: This strategy is a more personal approach, targeting customers directly
through in-person promotions, catalogs, e-mail, telephone calls or mail.

PROMOTIONAL CAMPAIGNS IN RURAL MARKETS

1. Cultural shows like folk shows

2. Village melas
3. Regional newspaper
4. Promotional activities in the concerned village school.
5. Puppet shows; and
6. Involving the members of the village panchayat or the gram sabha.