Rural Marketing

Changing Face of Rural Markets in

India
Government Initiative
IRDP, J RY, NABARD, RLEGP, Green Rev., White Rev.
Demographic factors
Huge rural population to cater to.
Raising Prosperity
NCAER
Growth in Consumption
Many new products have entered the consumption basket of
rural consumers.
Rural India-Accounts for sizeable share of total consumption
of a variety of consumer goods.
Changes in Rural Consumption
Patterns
Economic Factors
Infrastructure, Increased per capita income, Std. of Living.
HUL Project Shakti/ ITC e choupal/ Dr.Reddys Foundation
Social factors
Increased purchasing power/ Changing mindset/ Increase in
earning family members.
Political Factors
Liberalization/ Five Year Plans
Technological factors
ITC E-choupal/ HUL I-shakti/ IFFCO/ KRIBHCO
Selling in Rural India- MNCs lead
the way
TO expand the market by tapping the
countryside, more and more MNCs are foraying
into India's rural markets. Among those that have
made some headway are Hindustan Lever,
Coca-Cola, LG Electronics, Britannia, Standard
Life, Philips, Colgate Palmolive and the foreign-
invested telecom companies.
Selling in Rural India- MNCs lead
the way
THE 4A APPROACH
Availability,
Affordability,
Acceptability
Awareness

Rural Marketing: Strategies
O&M launches rural link drive in UP
PARAM
Pilot project- Beta I

Rural Marketing: Strategies
BPCL moves to sell products thru e-choupal
network
`One-stop truckers' shop- Ghar
Rural Marketing: Strategies
Coke uses art to reach out to rural folks
`Chotta Coke'
Pro-rural advertising campaigns
`Thums Up Chowfulla'
Rural Marketing: Strategies

HUL's Shakti

ITC's E-Choupal

Rural Marketing: Strategies
The Rural Network to bring market issues
centrestage
THE Rural Network, an alliance of leading rural
marketing organisations in the country, is
spearheading a series of initiatives designed to
put rural marketing issues squarely in the
reckoning of corporates looking for new markets.
The Network partners:Anugrah Madison,
Chennai,MART, New Delhi, Rural Relations,
Pune and Sampark, Mumbai.
Rural Marketing: Strategies
Inagriline by EID Parry
The agri-portal of EID Parry,
www.indiagriline.com
Rural Marketing: Strategies

Amul's Dairy Portal
Innovative Rural Marketing
Strategies
M&M: Brings even small customers to its
shop floors. Incorporates new ideas &
innovates products to suit local conditions
Pepsi: Trains farmers to improve their potato
& tomato growing techniques.
Arvind Mills: Teaches farmers to get better
quality & yield in cotton.
Brooke Bond Lipton India: Sales persons
paints shops, clean them, & offer hygiene
tips in the process
Innovative Rural Marketing
Strategies
TATA Steel: has implemented the concept of
Social Marketing. It has developed the
surroundings also along with the product.
The tribal areas of Bihar & Maharashtra have
seen enormous development because of the
company.
Rural India:
Challenges & Innovations in Marketing
Lower per Capita Income
Focus on large volumes rather than margins
Products should be simple & functional
Quality products at an affordable price
Innovative advertising programs
Lack of Formal Sales & Distribution Network
Very small retail outlets
Nature of Retail & Distribution Network
Consumer goods companies need to build an
extensive distribution network.
Rural India:
Challenges & Innovations in Marketing
Retail Power
Rural Retailers have substantial power in
driving consumer purchases
Relative Cheapness of Labor
In case of labor intensive market-manufacturing
& distribution through human labor remains
economical
Innovation & Cultural Sensitivity>>Mantra
for Success


Rural Marketing: Communication Strategy
The most important element in rural
communications is that you have to integrate
3 things as you communicate :
Communication( the exposure to a message)
Trial or Demonstration (convincing)
Final sale
Effective communication is the key to reach
the rural consumer. It has been observed
that the rural consumers are generally more
brand loyal than the urban consumers.
Rural Marketing: Communication Strategy
Word of Mouth Oriented Communication for
Effective Rural Marketing :
Usage of mass media (to create brand
awareness) has to be synergised with the
planning of WOM in the rural marketing
communication program
Rural Marketing: Communication Strategy
Limited Mass Media Reach in Rural Market
Scattered Consumer Group in Rural Market
Rural Consumer wants more Credible
Information
WOM orientation decreases the cost also
Reference of Others Worth More in Rural
Buying Decision Process
Influencing Opinion Leader
Rural Marketing: Communication Strategy
EFFECTIVE RURAL MARKETING:
Exclusive Advertising for Rural Consumer
Exclusive Product for Rural Consumer
Using Rural Tradition
Haats/ Melas/ Folk Media/ WOM by Live
Demonstration/ WOM by Rural Retailer/
WOM by Direct Marketing/ WOM by Rural
Opinion Leader
Rural Marketing: Communication Strategy
Despite all diversities & challenges, the
reality for a marketer in the rural scenario is
that they have to explore Integrated Unique
Product Strategy, Pricing Strategy,
Promotion Strategy, & Distribution Strategy.
Branding in Rural India
Some Successful Brands in Rural Markets
Lifebuoy
Dabur Lal Dant Manjan
Hero Cycles
Rajdoot Motorcycles
Branding in Rural India
The Winning Mantras:
Opinion Leaders
Penetration Pricing
Small Pack Sizes to generate trials
Different Means of Communication
Use Captive Audience Points
Understand Product Needs
Free Samples
Penetrating the rural market for
consumer durables Time for cos to
think `out-of-the-box': Study
According to a study conducted by Marketing
and Research Team (MART), consumer durable
companies require non-conventional marketing
methods and techniques to win the hearts and
pockets of the discerning customer from the
hinterland. The study was conducted in 24
villages across three districts each in Uttar
Pradesh and Punjab
Penetrating the rural market for
consumer durables Time for cos to
think `out-of-the-box': Study
Apart from the use of melas, mandis, haats and
vans to disseminate product information and
increase awareness, the MART study identifies
the following, as vehicles of effective
communication.
Mills
Game/ tournament sponsorships
Loan/exchange melas and service camps
Local brand ambassadors
Presentation on
Rural Marketing: Lessons for the Future
By C. K. Sabharwal - Managing Director,
Crop Health Products Ltd. Agrochemicals and bio
products for crop protection.
RURAL MARKETING
LESSONS FOR THE FUTURE
BETWEEN NINETEEN SIXTIES AND EIGHTIES THE DIVIDE BETWEEN
RURAL AND URBAN INDIA WAS WHITE AND BLACK. WITH THE TURN
OF THE CENTURY THE DIFFERENCE HAS BECOME BLACK AND GREY
AND OFFWHITE DEPENDING ON WHICH TERRITORY YOU OPERATE.
EXPANDING INFRASTRUCTURE, WIDESPREAD EDUCATION, EASY
COMMUNICATION, MASS MEDIA PENETRATION, IT REVOLUTION,
SECOND GENERATION DISTRIBUTION DIVERSIFICATION, THE DESIRE
TO IMPROVE QUALITY OF LIFE, FAMILY PRESSURES TO ACQUIRE
NEW PRODUCTS AND SERVICES HAVE UNLOCKED A MARKET
POTENTIAL OF VERY LARGE PROPORTIONS TO BE EXPLOITED BY
THE LEARNED FEW.
MANY COMPANIES HAVE ENTERED RURAL MARKETS WITH GOOD
PRODUCTS, BUT FAILED TO USE THE OPPORTUNITY OR SUSTAIN
THEIR EFFORT AND GROWTH.
WE EXAMINE THE REASONS WHY? AND SOME LESSONS THAT CAN
BE LEARNT KEEPING THE OLD KOTLER MARKETING PRINCIPLES IN
MIND.
MOVING BEYOND 4 Ps.

WHO IS THE CUSTOMER?
THE RURAL HOUSEHOLDS IN VILLAGE CLUSTERS
ARE THE FOCAL POINT: THE USER, PERSON
BUYING, THE PERSON SPENDING, AND THE
MEMBER DECIDING MAY NOT BE THE SAME
INDIVIDUAL. WE NEED VERY FOCUSSED
CUSTOMER PROFILE FOR DIFFERENT
PRODUCT/SERVICE CATEGORIES. AND TREAT
EACH FAMILY MEMBER DIFFERENTIALLY. RURAL
YOUTH ARE THE EMERGING FORCE.
MARKET SURVEYS, RESEARCH FORUMS, AND
AUDITS PROVIDE THE ANSWER.
CORPORATE COMMITMENT AND
OBJECTIVES
ORGANISATIONS ENTER RURAL MARKETS TO DIVERSIFY,
SOMETIMES ON A NATIONAL BASIS, ALLOCATING SCARCE
RESOURCES FOR DISTRIBUTION DEVELOPMENT,
COMMUNICATION, CORPORATE IMAGE BUILDING AND
MARKETING. THEY INVARIABLY FAIL! - CORPORATE
COMMITMENT TO RURAL MUST BE FROM THE
STAKEHOLDERS AND THE BOARD WHO MUST EXPRESSLY
SPELL OUT THEIR COMMITMENT AND LONG TERM RURAL
MKTG. STRATEGY/OBJECTIVES.
COMPANIES MUST ESTABLISH SPECIFIC RURAL
MARKETING DIVISIONS MANNED BY RURAL COMPETENT
MANAGERS WHO ARE ASSURED RESOURCES AND AN
UNDERSTANDING OF THE CORPORATE AND MARKETING
OBJECTIVES.

ORGANISATIONAL/ MANUFACTURING AND
MARKETING CAPABILITY MUST CONFORM TO
PRESENT AND FUTURE CUSTOMER NEEDS
PRODUCTS MUST BE SPECIFICALLY DESIGNED/MODIFIED
FOR RURAL COSTOMERS THROUGH INDUSTRIAL
ENGINEERING. EXCERCISES FOR TRANSPORTATION,
STORAGE, PERFORMANCE, OPERATION, PACKAGING AND
SERVICING REQUIREMENTS. THRUSTING URBAN
TECHNOLOGY DOWN RURAL MARKETS IS NOT
DESIRABLE.
CHECK TRANSPORT AND PACKAGING FOR RURAL
OREINTATION.
AUDIT MANUFACTURING COMPETENCE
UNDERSTAND IMPACT OF AGRO CLIMATIC AND
CROP PERFORMANCE POSITIONS ON DURABLES,
WHITE GOODS AND AGRO INPUTS.
SALES FORECASTING, POSITIONING, INVENTORY
MANAGEMENT, INTER TERRITORY TRANSFERS, PRICING
AND CREDIT MANAGEMENT ARE FUNCTIONS OF HOW
THE AGRICULTURE IN THE AREA IS FARING. MANAGERS
MUST LEARN TO CORELATE AND RESPOND TO
DROUGHT, FLOODS, IRRIGATION,GOOD AND BAD
MONSOONS, HARVESTING AND SOWING SEASONS AND
IMPACT OF THESE ON DISPOSABLE INCOMES OF RURAL
HOUSEHOLDS.
FOR AGRI INPUTS, POSITION INVENTORY THAT CAN BE
LIQUIDATED,MONITOR PRODUCT MOVEMENT. HANDLE
COMPLAINTS. DEVELOP KNOWLEDGE.
SELECT THE RIGHT COD WITH FEW TIERS USING
APPROPRIATE CRITERIA FOR APPOINTMENT
LOCATION, SHOP PROFILE, DEALER NETWORK, FINANCIAL
POSITION, CASH TO CREDIT OUTLOOK, REPUTATION, TRACK
RECORD, ALLIED LINES, ACCOUNTING, ABILITY TO IMPLEMENT
COMPANY POLICY, COMPETITIVE PRODUCTS POSITION, ATTITUDE
AND PARTNERSHIP STATUS ARE SOME USEFUL CRITERIA.

DO NOT CHANGE NETWORK OFTEN. APPOINT CAREFULLY AND
DEVELOP. CHANGE WITH CAUTION AND TRANSPARENCY. SETTLE
DISPUTES.

UNDERSTAND RURAL BUYING IS NOT A FUNCTION OF PRICES OR
DISCOUNTS ONLY BUT OF BUILDING RELATIONSHIPS AND VALUE
CHAINS.
COD MUST BE DEVELOPED TO FUNCTION WITHIN
COMPANY NORMS.SO SHOULD THE CO. STAFF!
EMPLOY MANUALISED TRADE MANAGEMENT PRACTICES WITH COD
AND SALES STAFF. DO NOT DEVIATE. DO NOT GIVE VERBAL
COMMITMENTS. PUT EVERY DEAL IN WRITING, ADVISE ALL
CONCERNED, ACT ON THE COMMITMENT. HE WHO SELLS
COLLECTS.
DO NOT ALLOW JUNIORS TO TACKLE A PROBLEM. CATCH THE BULL
BY THE HORN, RESOLVE YOURSELF. MAKE IT A WIN -WIN POSITION.
KNOW WHO TO DEAL WITH MANAGING PARTNER.
INVOLVE COD IN PROMOTIONS, EVENTS, ROADSHOWS, COMPLAINT
HANDLING, FIELD DAYS, DEMOS, CUSTOMER MEETS AT HAATS
AND MELAS. INNOVATE AND TALK TO CONSUMERS.
DO NOT EXPAND DISTRIBUTION WITHOUT CONSOLIDATION. GET
MORE OUT OF YOUR NETWORK, PUTTING PROCESSES IN PLACE TO
TRACK OUTLET COVERAGE, MARGIN CONTROL AND RATE
STABILITY.
SELLING WITHOUT LIQUIDATION HAS
LITTLE MEANING
SALES SHOULD BE ON THE BASIS OF WHAT IS
LIQUIDATED FROM THE DEALERS SHELF - EXPIRED
STOCKS, OLD INVENTORY, MARKET RETURNS ARE A
FUNCTION OF THIS.
DEMAND GENERATION PROGRAMS SHOULD BE
CARRIED OUT THROUGH TEAMS WITH DAILY REVIEW BY
TEAM LEADERS. DGP MUST RESULT IN BRAND
AWARENESS AND MOVEMENT FROM DEALER SHELVES.
INTER DEALER TRANSFER OF STOCKS SHOULD NOT BE
PERMITTED AS A RULE WITHOUT ACCOUNTING
PROCESSES.
BRANDS MUST HAVE VISUAL IDENTITY, BE REGULARLY
AVAILABLE, AND PROMOTED WITH FEW PRICE
CHANGES.
UNDERSTAND AND IMPLEMENT CREDIT
MANAGEMENT PRACTICES

COLLECT MONEY WHEN AVAILABLE SEASONALLY THROUGH
SCHEMES.
RECOGNISE TELL TALE SIGNS OF SICKNESS OF YOUR
DISTRIBUTOR WELL IN TIME.
GO INTO DETAILS AND ANTICIPATE EVENTS.
TAKE BACK STOCK, CASH, USE INFLUENCE, SELL
COLLATERAL, POSITION MANPOWER, CHECK ACCOUNTS, GO
TO LINKED DEALERS.
TAKE LEGAL ACTION ON CHECK BOUNCING, CHARGE
PENALTIES, DO NOT NEGOTIATE ON BAD PERFORMANCE.
SETTLE DISPUTES AND KEEP EGO ASIDE.
REWARD TIMELY PAYMENTS, PUNISH ERRING STAFF
COD WIIL BE AS LOOSE OR FIRM AS PER THEIR PERCEPTION
OF COMPANY IMAGE.
LOOSE A LITTLE FOR LONG TERM GAINS.
USE INTEGERATED COMMUNICATION AND CONFIDENCE
BUILDING STRATEGY
SELECT RURAL ADVERTISING, SALES PROMOTION AND PUBLICITY
MEDIA WITH CARE AND COST EFFECTIVENESS
HAVE A CENTRAL MESSAGE WITHOUT CONFLICTS
USE LOUD VISUALS, STRAIGHT FORWARD MESSAGE GIVING
PRODUCT VALUES, NO SUBTLE SLOGANS, OR RELIGION, OR
UNRELATED CELEBRITIES DO NOT OVER CLAIM.
SALES PROMOTION MEASURES MUST FOLLOW ASP BLITZ.
MAKE TERRITORIAL DISTINCTIONS IN PROMOTION CAMPAIGNS
TEST MARKET. USE HAATS AND MELAS. WORD OF MOUTH.
EXAMINE THE TANGIBLE IMPACT OF COMMUNICATION STRATEGY
BY MID TERM AUDITS AND TAKE CORRECTIVE STEPS.
CAN YOU SUSTAIN YOUR PROMOS? IN OFF SEASON?
BUILD REMINDER CAMPAIGNS ON A SMALLER SCALE. TALK TO
YOUR CONSUMER AND BUILD CONFIDENCE.
STRUCTURE SIMPLE MIS and RESEARCH
FUNCTION USE IT
MAKE AN IT ENABLED SYSTEM FOR REPORTING,
INFORMATIOM, DATA COLLECTION, AND PERIODICITY
AREA WISE, MANDIWISE.

DESIGN FORMATS

FREQUENT TRAINING IS NECESSARY

REVIEW MIS EFFECTIVENESS YEARLY.

MARKETING AUDIT FOR CORRECTIVE ACTION.

MAKE MARKET RESEARCH AN ONGOING ACTIVITY
ORGANISATIONAL RESTRUCTURING FOR RURAL
PENETRATION
HIRE AND TRAIN STAFF WITH APTITUDE FOR RURAL MARKETING
TRANSFER MANAGERS FROM ONE TERRITORY TO ANOTHER
CARRY OUT CROSS TERRITORY AUDITS
SENIOR MANAGERS MUST TOUR DURING MARKETING CAMPAIGNS
AND MONITOR ACTIVITY IN THE FIELD.
LEARN FROM COMPETITION, YOUR STAFF, YOUR MISTAKES.
MANAGERS MUST BE CAPABLE OF GETTING ALONG WITH COD,
STAFF, DISPLAY LEADERSHIP ROLES, AND ABOVE ALL BE HONEST.
COMPANIES MUST BUILD CORPORATE IMAGE THROUGH A PLANNED
APPROACH
INTRODUCE GOOD SUPPLY CHAIN PRACTICES DELIVER IN 24 HRS.
SETTLE ACCOUNTS TWICE A YEAR ONCE IN OCTOBER(KHARIF)
AND THEN IN MARCH, (RABI) IN WRITING.

RURAL MARKETING FUTURE ROAD MAP...
TERRITORY WISE RURAL DEVELOPMENT PLUS RURAL
MARKETING.
SUSTAINABLE DEVELOPMENT THROUGH PLANS .
TAKE APPROPRIATE TECHNOLOGY/PRODUCT/SERVICE TO
RURAL MARKETS AND KEEP UPDATING.
BUILD CREDIBILITY, CONFIDENCE AND CORPORATE IMAGE.
VIABLE DISTRIBUTION MECHANISIM .
EXCEL IN CUSTOMER SERVICES AND PRODUCT QUALITY.


RURAL MARKETING FUTURE ROAD MAP...
ESTABLISH RESPONSIVE MARKETING
ORGANISATION.
ADD 2 P`s TO 4 P`s - PEOPLE AND PROFITABILITY.
REMEMBER RURAL CUSTOMER NEEDS ARE
CHANGING FAST , FASTER THAN WE THINK.
CONSIDER BUSINESS PROCESS
TRANSFORMATION FOR RURAL MARKETS.
CONTINUE TO BUILD RELATIONSHIPS AND
DELIVER VALUE.
ANTICIAPTE FUTURE KEY DRIVERS AND
OUTPUTS.

CORPORATE CHALLENGE : SUPPLY THE RIGHT
PRODUCT AT THE RIGHT TIME AT THE RIGHT
PLACE AT THE RIGHT PRICE TO THE RIGHT
CUSTOMER - SIMPLE ISNT IT?