Rural Marketing

Defining Rural Markets:

Rural people do not buy brands
Believes that they buy cheap products
Seeks value for money
Homogenous mass
Understanding rural consumers
A farmer in rural Punjab is more progressive than his
counter part in Bihar

A farmer in Karnataka is far more educated than one in

Rajasthan
Urban Family – Husband, wife and children are
involved in the buying process (independent purchase
decision)

Village family – Men makes their purchase decisions.

Strong social structure

Includes cast considerations

Low literacy levels

Community decision making is quiet common

New influences:
The forces of change:

Brought in by liberalization and global connectivity.

Media and telecommunication.
Information age
Increased education
Led to the birth of new ones.
They are exposed to the latest brands, products and
scenario.
Many educated people migrated to cities.
Latest technology and products.
Products
Pressure cookers with both side handles
Electrical gadgets
Demand for detergents
Hard water
Lather

Pipe water – washing machines

Companies need to establish rural mkt development
prgms by innovating and adopting prods to suit rural
operating conditions and by educating rural consumers
about new concepts relevant to the environment and
usage habits that will improve their quality of life
Rural Distribution
Absents of mkt places, shopping complexes and malls
Marketers will have to abandon the known and familiar
and instead understand where rural consumers buys goods
and products.
90% of the durables are purchased from 20,000 +
populated towns. Details are perceived from company
representatives, village experience for technically
sophisticated products.
 FMCG direct supply to 20,000 + populated feeder towns,
supply rationale of 100+ outlets in 50 odd locations
Cover village up to 2000+ population category.
Rural Communication
Build reassurance
Trust about product quality
Service support
Company credentials
Face to face interactive communication
Below the line, touch feel and talk modes at mundis
and melas
AICDA model
Consumers from unawareness from action.
Evolved word by word the announcement made to
gathering to the melas and haat.
To group – community gatherings.
Giti important to understand the aspirations fears and
hopes of the rural customers in relation to each product
category.
Hey have to develop special creative approaches and
treatments aimed at homogeneous rural segments and
that their may be quiet different from -----------
Developing rural markets through IT
Companies are attempting to create virtual bazaars or
agri portals, akin to mandis
Notable virtual mandis are the choupal by ITC, Diary
portal by AMUL.
4000 choupals already set up by ITC cover 20,000
villages in 4 states (soya, coffee,etc…)
KIOSK counter – used for reverse trading by companies
to sell products and services needed by farmers
STD revolution- PCO:
 10,000+ population villages.
Large format retail stores
Self service trollys, open format shelf, touch screen.
All these are impacted buying behavior irreversibly.
Rural Markets- the way ahead..
We will need to adopt 4P’s of marketing:

4P’s in the strategy are:

Awareness
Acceptability
Availability
Affordability
Melas, haats, jatras, puppetry – olden ways of making
products availabe in markets

Now a days, TV, radio and press

 Access
 Availability
 distribution & easy availlability.
 Eg: clinic plus shampoo, Parle G

Public Private Partnership

Economic scenario in Rural India:
Rural India the “heart of India” – contributing more than
half to the national income.
Gone are the days
Transaction began with agri revolution. In Punjab (1952-
65), agri output grew at an annual rate of more than 5.5%
Increased produced in agri sector – living conditions &
economic prosperity among farmers .
“Operation flood” introduced in 1970 ended the milk
famine in the country.
Turned farmers in to powerful gents.
Became the largest producer of milk in the world.

This was followed by “Blue Revolution”

Second largest producer of inland fish in the world.
Sharp increase in the maximum support price (MSP)
of food ---- over the 20 years.
Helped to get better price for farmers, realization for
farmers leading to higher income.
Changing face of rural development
1950-2000 graduated farmers a barter economy to cash
rich economy.
1951 first five year plan was introduced. A number of
initiatives have been taken by the govt. to improve the
quality of life of the rural people.
Allocation for rural development has increased from Rs.
8,900 Cr. to 34,000 Cr., Rs. 89,000 to 1,20,000 cr. in 8 th,
9th, and 10th, five year plans respectively.
Agri credit 32,000 cr. (1998-99) to 1,05,000 cr. (2004-
05)
Rural literacy increased to 59% by 2001.
Improved health conditions, per capita expenditure,
declain in poverty levels, improvement in housing,
increased life expectancy.
All these resulted in increased human development
index in rural India.
HDI(human development index ), human life and rural
prosperity
HDI inproved 26% in 1980 & 24% in 1990.
Rural urban gap of human development has declained
from 1.7 in 1980’s to 1.5 in 1990’s.
 Below the poverty line (BPL) in rural areas

Period No in millions % of people Poverty line (Rs.)

1983 252 46 89.5

1993-94 244 37 206

1999-00 193 27 328

HPI(human poverty index) in 1980 was higher for
rural areas (53%) to urban areas(27%).
Human Poverty Index (HPI)

Period Rural Urban

1981 53 27

1991 44 22
The development exercise:
The five year plans
Increase in agriculture has been five fold
Rural development has been 13 times between 7 th and
10th five year plans.
Purpose of planing, the government of india has
classified the econamic activity into 3 major areas:
 Primary sector- agriculture and allied activities( live stock,
fishing, forestry..)
 Secondary sector- mining and manufacturing
 Territory sector- transport, commerce, financial service…)
Sectorial allocation in five year plans

Heads of 7th five year 8th five year 9th five year 10th five year
Development plan plan plan Plan
(1985-90) (1992-97) (1997-2002) (2002-07)
Agriculture
development 105 225 372 589

Rural
development 89 344 890 1219
The transaction of the rural economy
3 levels to high opportunity of value addition
--------high rural incomes.

1. Food crops – non food crops and cash crops

2. On land activities – off land allied activities, live stock

and fisheries.

3. Farm activities – manufacturing & services.