MKT514

Rural Marketing
Dr. Rajesh Verma

#Session 5
Recapitulate
Find out the one which is not a market separation as per Bartels’ theory of market
separations :
A. Spatial

B. Temporal

C. Utilitarian

D. Informational

E. Financial
Recapitulate
Identify the right match between 4As and 4Ps:
A. Affordability - Price; Availability- Place; Acceptability - Product, Awareness – Promotion

B. Affordability - Product; Availability- Price; Acceptability - Place, Awareness – Promotion

C. Affordability - Price; Availability- Product; Acceptability - Place, Awareness – Promotion

Learning Outcomes
• Analyze the implications of BoP concept.
• Understand paradoxes and dynamics of rural markets.
Bottom of Pyramid (BOP)
Bottom of Pyramid (BOP)
• ‘Bottom of the Pyramid’ was first used by US President Franklin D Roosevelt in 1932.
• ‘The Fortune at the Bottom of the Pyramid’ - CK Prahalad (2004)
• Population - 4 billion people of the BoP
• Live on less than $2 a day.
• Data from 110 countries show that the BoP makes up 72 % of the population (two-
thirds of the world’s population), with an overwhelming majority in Africa, Asia,
Eastern Europe, Latin America and the Caribbean.
• Other Characteristics
• Significant unmet needs
• Dependence on informal livelihoods
• Impact of a poverty tax
Rural Potential
• Large Population
• 6 Lac villages with 890mn+ population
• 8-9mn migrated population serving as income generator from urban
• Market growth
• Maruti Suzuki India Limited (MSIL) - Of the total sales, 40% came from rural
areas as compared to 38.5% last year 
• September quarter, urban growth for Nestlé India stood at 6%, while rural
markets grew at 12%.
• Q2 of 2020-21, Jyothy Labs grew by 8.5% in volume terms. Rural about 1.3 to
1.4 times higher than urban.
• Mobile, Media and IT penetration
• 450mn mobile connections & 277mn mobile internet connections
Rural Potential
• Impact of globalization
• Increase in income and rural indebtedness
• Accessibility of markets
• Improved literacy and awareness
• Better employment opportunities
• Government policies
• Better financial facilities
• 410mn+ Jan Dhan Accounts
Government Initiatives
• https://rural.nic.in/scheme-websites

• https://www.india.gov.in/topics/rural
The Rural Market Paradox
Rural Market Characteristics
• Large and Scattered market: Though the rural market of India is very large in
terms of number of people and area, it is a scattered, difficult to service market.
• Seasonal income: Rural prosperity is tied with agricultural prosperity.
• Traditional outlook: Tradition and old customs are still alive and well in Indian
villages.
• Diverse socio-economic lifestyles: There are sharp and varied regional
preferences, habit patterns and behavioural characteristics.
• Lack of infrastructure: Rural areas in India suffer from lack of or very poor
infrastructure.  Facilities like roads, warehouses, communications, electricity and
financial institutions are woefully inadequate despite government claims.
• Large numbers of rural poor: Incomes are highly skewed, with certain
sections of society completely isolated.
• Media dark environments: Rural communities are media dark, in the sense that
they lack newspapers, TV and other types of media exposure.
Traditional outlook - Village Malana (HP)
The Vedanta Story – Rural Case
 Lanjigarh, Odisha, India.
 London-based billionaire Anil Agarwal’s Vedanta.
 Based out of London, has revenues in excess of $14 billion with operations in Namibia, Zambia, Ireland,
Liberia, South Africa and Australia, apart from India.
 Agarwal spotted an opportunity in mining bauxite in Niyamgiri and refining it in the vicinity, a move that
was expected to result in one of the most economical operations in the global aluminium industry.
 Odisha is known to have substantial deposits of bauxite — an estimated 2,000 million tonnes as against the
country's total deposit of 3,000 million
 In 2004, Vedanta entered into a MoU with the Odisha government for bauxite supplies; according to the
agreement, roughly half the assured offtake of the total 150 million tonnes was to come from Niyamgiri.
Two years later, a 1 million tonne per annum (tpa) alumina refinery plant went on stream in Lanjigarh,
roughly 15 km from the Niyamgiri Hills. Cost: Rs 5,000 crore. Another Rs 35,000 crore was invested in a 0.5
million tpa aluminum smelter and a 1,215 MW captive power plant at Jharsuguda in Orissa. Add to this an
investment of nearly Rs 10,000 crore in a 2,400 MW independent power plant that group company Sterlite
Energy has put up, which has linkages with the aluminum project.
 Resulting into a total Investment of Rs. 50000 Crore
The Battle Ground
After such a huge investment,
Vedanta was not able to start the
plant as planned. Why? What can be
the reasons?
Thank You

Any Questions?
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