1

BBM3
(2018-21 BATCH)
RURAL MARKETING

Prof. (Dr.) Aashish Mehra

TEERTHANKAR MAHAVEER INSTITUTE OF

MANAGEMENT & TECHNOLOGY,
 Agenda
2

 Introductions
 Course overview
 Introduction to RM
 Introductions
3

 About your instructor

 PhD from Jiwaji University
 UGC-NET (National Eligibility Test)
 MBA (Mkg.) from JU
 Experience in Marketing; taught Mkg. & Core
subjects in MBA and BBA courses
 Course Overview
4

Recommended Text Books

1. Harold Koontz & Heinz Weihrich “Essentials of Management” 5th
Ed. McGraw Hill
2. Stoner, Freeman, Gilbert Jr. “Management” 6th Ed. Prentice Hall
Reference Books
1. Heinz Weihrich & Harold Koontz “Management (A Global Perspective)” 10 th Ed.
McGraw Hill
2. Kreitner “Management” 7th Ed. AITBS
3. Stephen Robbins & Coulter Mary “Management” 5th Prentice Hall, India
4. Robins “Fundamentals of Management” 3rd Pearson Education Asia
5. Terry & Franklin “Principles of Management” 8th AITBS
 Format:
 Combination of lectures and in-class exercises
 How to find me…
5

 Contact info:
 Email: draashishmehra@gmail.com,
drmehra.management@tmu.ac.in
 Website:  

http://www.tmu.ac.in
 Office phone:
 Office hours: By appointment
 Mobile phone: 9893416517 (WhatsApp)
 Grading (Internal)-Tentative
6

 Group Assignment (10%) due week 6

 Random assignment to group of 3 to 4
 Watch movie and apply three PPM theories
 Mid-term (Internal-I)(10%) in week 4
 Multiple-choice questions & Theory Exam.
 Mid-term (Internal-II)(10%) in week 7
 Same format as mid-term
 Mid-term (Internal-III)(10%) in week 10
 Same format as mid-term
 Case(s) Discussion (15%)
 Class Presentation/Quiz (15%)
 Participation (10%)
 Classroom attendance
 Course Topics
7

 UNIT 1. Introduction: Definition, Scope of rural marketing, Concepts,

Components of rural market, Classification of rural market, Rural vs.
Urban markets, Problems in rural marketing. MID-
 UNIT 2. Rural marketing environment: Population, Occupation pattern, TERM
Income generation, location of rural population, expenditure pattern, (1)
literacy level, land distribution, land use pattern, irrigation, development
programs, infrastructure facilities, rural credit institutions, rural retail
outlets.
 UNIT 3. Characteristics of Rural consumer: Stages of the Life cycle.
Consumer behaviour, Factors affecting Consumer Behavior, Researching
Rural market, Sanitizing rural market, Research design- Reference
frame. UNIT 4. Rural Marketing Strategies: Segmenting, Targeting and MID-
Positioning Product Strategy, Marketing Mix Challenges. TERM (2)
 UNIT 5. Product Concepts Classification: Five Levels Products,
Classification of Products Rural Product Categories - (Fast moving
Consumer goods, Consumer Durables, Agriculture Goods, Services)
Formulating Product Planning, Developing Product Strategy.
 Expectations
8

What I expect of you

 Attendance. I expect you to attend every class.

 Participation. Strongly encouraged

 Group work. Formed during the second week of classes

What to expect from me

 Lecture notes will be posted by Saturday of each week

 Exams will be based on text and lecture notes; so even if

we don’t review it in the lecture, if it is in the text, it is

fair game
 Available after class or by appt.

 Use practical examples to highlight relevance of theories

 9

QUESTIONS?
 10

UNIT 1: INTRODUCTION TO RM
 UNIT 1: Introduction to Rural 11

Marketing

UNIT 1. INTRODUCTION: DEFINITION,

SCOPE OF RURAL MARKETING,
CONCEPTS, COMPONENTS OF RURAL
MARKET, CLASSIFICATION OF RURAL
MARKET, RURAL VS. URBAN MARKETS,
PROBLEMS IN RURAL MARKETING.
UNIT 1: Introduction to Rural
Marketing

1
DEFINITION, SCOPE
OF RURAL
MARKETING
What is Rural Marketing?

Definition 1. Rural marketing can be defined as

a function which manages all those activities
in asserting, stimulating and converting the
purchasing power of rural people into an
effective demand for specific products and
services and there by achieving the goals of
the organization.
Definition 2. Rural Marketing is defined as any
marketing activity in which one dominant
participant is from a rural area.
 Demographical details of Indian rural market

 Rural population (% of total population) in India was reported at

66.46 % in 2017, according to the World Bank collection of
development indicators, compiled from officially recognized
sources.
 The No. of middle income & high income households in rural India is

expected to grow from 46 millions to 59 millions.

 Size of rural market is estimated to be 42 millions household and rural

market has been going at 5 times the growth of the urban market
 More government, rural development programs

 Lowering of difference between taste of urban and rural customers

 Increase in agricultural productivity leading to growth of rural

disposable income
 URBAN TO RURAL TREND…
15

Why there is a trend of companies in urban market

going for rural market.
 The Nature of Rural Market
16

 Large, diverse and scattered market:-

Rural marketing in India is large, and scattered into a number of
regions. There may be less number of shops available to market
products.
 Major income of rural consumers is from agriculture:-Rural
prosperity is tied with agriculture prosperity. In the event of crop
failure, the incomes of masses is directly affected.
 Traditional outlook:-
Villages develop slowly and have a traditional outlook. Change
is a continuous process but rural people accept change gradually.
This is gradually changing due to literacy especially in the youth
who have begun to change the outlook in the villages
 Continued….

 Standard of living and rising disposable income of the rural

customers:-
It is known that majority of the rural population lives below
poverty line and has low literacy rate, low savings etc. Today the
rural customers spends money to get value and is aware of the
happening around him
 Rising literary levels:

It is documented that approximately 45% of rural Indians are

literate. Hence awareness has increase and the formats are well
informed about the world around them. They are also educating
themselves on the new technology for a better life style.
 Scope of Rural Marketing
 Large population:-
According to 2011 census, rural population is 72% of total
population and it is scattered over a wide range of geographic
area.
 Rising rural prosperity:-
Average income level has unproved due to modern farming
practices, contract farming industrialization, migration to urban
areas etc.
 Growth in consumption:-
There is a growth in purchasing power of rural consumers. The
average per capita house hold expenditure is 382 Rs.
Continued…
 Change in life style:- Life style of rural consumer changed
considerably.
 Market growth rate higher than urban:- The growth rate of
fast moving consumer goods [FMCG] market and durable
market is high in rural areas. The rural market share is more
than 50% for products like cooking oil, hair oil etc.
 Life cycle advantage:- The products which have attain the
maturity stage in urban market is still in growth stage in rural
market.
 Rural marketing is not expensive:- To promote consumer
durable inside a state costs 1 crore Rs while in urban areas it
will costs in millions.
 Continued…
20

Following Service areas have great potential in rural markets:

1. Agricultural consultancy:
Rural customers require proper consultancy services about the best methods, timings
and seasons, technology, tools, prices and best markets for selling their farming
products.

2. Banking, microfinance and loan facilities:

The rural market has huge potential for banking services for providing following
facilities at affordable prices:
• Agricultural loans
• Educational loans
• Housing loans
• Savings accounts and safe deposits
• Automobile loans
• Personal loans
 Continued…
21

3. Healthcare:
The availability and location of these services is of great concern as most of the areas either do
not have any or many rural and remote areas needs to be dependent on very few and distantly
located Hospitals

4. Telecom services:
The government’s policies for reduced tariffs, call rates, lesser mobile handset prices and
private participation involvement has helped in increasing the level of competition, continuous
improvement in technology and thus has resulted in the growth of the rural telecomm market

5. Automobiles Services:
There has been a huge increase in the number of two wheeler, four wheeler and Agricultural
tools and vehicles in past few decades because of reduction in prices and government support
to the rural population. This has given rise to a new business for providing maintenance and
repair services to rural consumers.
 Continued…
22

6. T.V. Channels Services:

Due to the increased awareness, arenas of interest, leisure requirements, and number of
entertainment options like televisions and computers due to reduced & affordable prices,
the demand for entertainment services like T.V. entertainment channels have increased.
Many companies have already gained profits by targeting rural markets which include
Airtel (DISH TV), Reliance (BIG TV), and Tata (SKY).

7. Travel and reservation Services:

The travel and reservation booking and organizing services for booking train, busses, taxies
and tour consultancy has also been observed to create a huge demand in last few decades as
more and more rural population need to mobilize for business and personal reasons.

8. Low Cost Hotels:

Due to increased mobilization because of business and personal needs, there is also
increased demand for hotel and lodging services to the travellers.
 Continued…
23

9. Event Managements:
The rural population are majorly involved in celebrating and organizing
festivals, which require lighting arrangements, venue decoration, food,
lodging, transportation, catering and event planning etc. for:
i. Family gatherings, Marriages, engagements, birthday parties,etc.
ii. Festivals like Diwali, Onam, Christmas, lohri, Eid, Dushera, Kannada
Rajamahotsava, Navratri, Garba and Dandia mahotsava etc.

10. Beauty Parlours:

As there has been major improvement in the quality of life style and
increased awareness among the rural customers (especially females),
there has been great demand observed for beauty products and services.
This market is still dominated by unorganized and local players who lack
adequate tools, methods, skills, process, technology and beauty products
to meet the demand of rural population.
 Continued…
24

11. Affordable Movie theatres:

Till now the entertainment service providers for movie theatres at
affordable prices in rural markets are dominated by local and
unorganized players who lack proper facilities and infrastructure as
well as quality delivered.

12. Educational and Career consultancy:

The rural markets lack adequate and quality educational services
which are majorly catered by government agencies and bodies. But
due to lack of proper infrastructure, expertise, knowledge, talent, funds
and participation of the service provider, this sector is unable to meet
the desired level of service expectation of the rural customer for career
building.
Importance of rural market
Large market:- Approximately 75% of Indian’s
population resides in rural.
 Around 6,38,365 villages of India spread over
32,00,000 Sq. kilometer 41% of Indian’s middle
class resides in rural areas.
 Rural markets account for over 60% of the national

demand.
Continued…

 Higher purchasing capacity:- According to

“NCAER”[National Council for Applied
Economic Research]. As per NCAER study there
are many middle income and above households in
the rural areas. As there are in the urban areas there
are almost twice as many lower middle income
households in rural areas as in the urban areas.
Because of this purchasing power of power of
rural people is on rise
 Continued…
27

 Market growth:- “Hariyali kissan bazar” was set up

by Sri Ram consolidated limited to facilitates scale of
agriculture inputs such as fertilizers, pesticides
forming equipment, seeds etc.
 Shakti- though the state governments and NGO’S
involved in microfinance women entrepreneurs in
villages are identified to act as local distribution and
sales point for HUL products.
 Emerging Areas in Rural
28
Marketing
 Agri-Business Management
 NGO Management
 Natural Resource Management
 Rural Infrastructure Management
 Micro-finance
 Corporate Social Responsibility
UNIT 1: Introduction to Rural
Marketing

2
CONCEPTS,
COMPONENTS OF
RURAL MARKET
 Concepts of Rural Market
30

 Rural Marketing is defined as any marketing activity

in which the one dominant participant is from a rural
area. This implies that rural marketing consists of
marketing of inputs (products or services) to the rural
as well as marketing of outputs from the rural
markets to other geographical areas.
31

 Rural areas of the country or countryside are areas

that are not urbanized, though when large areas are
described country towns and smaller cities will be
included. They have a low population density, and
typically much of the land is devoted to agriculture.
 Components of Rural Markets
32

 For the market to exist, certain conditions must be satisfied.

These conditions should be both necessary and sufficient.
They may also be termed as the components of a market.
1.  Existence of a good commodity for transactions (physical
existence is, however, not necessary)
2.  Existence of buyers and sellers
3.  Business relationship or intercourse between buyers and
sellers; and
4.  Demarcation of area such as place, region, country or the
whole world. The existence of perfect competition or a
uniform price is not necessary.
UNIT 1: Introduction to Rural
Marketing

3
CLASSIFICATION OF
RURAL MARKET
 Classification of Rural Market
34
 Classification of Economic Activity
35

 Primary Sector – Agriculture and allied services such

as livestock, fishing and forestry.
 Secondary sector – Mining and manufacturing
activities.
 Tertiary Sector – Services such as transport,
communication, trade, financial services and
community services.
36
 Classification of rural markets
37

a) CONSUMER MARKET:
Constituents: Individuals and Households.
Products : Consumables, Food- Products, Toiletries, Cosmetics,
Textiles and Garments, Footwear etc.
Durables : Watches, Bicycles, Radio, T.V, Kitchen Appliances
Furniture, Sewing Machines, Two Wheeler etc.
 
b) INDUSTRIAL MARKET:
Constituents : Agricultural and allied activities, poultry farming,
fishing, Animalhusbandry, Cottage Industries, Health center,
School, Co-operatives, Panchayat office etc.
 
38

Products : Consumables, seeds, Fertilizers, Pesticides, Animal

feed, Fishnets, VMedicines, Petroll diesel etc.
Durables : Tillers, Tractors, Pump sets, Generators, Harvesters,
Boat etc.
 
c) SERVICES MARKET
Constituents : Individuals, Households, offices and Production
firms.
Services : Repairs, Transport, Banking credit, Insurance,
Healthcare, Education, communications, Power etc.
UNIT 1: Introduction to Rural
Marketing

4
RURAL VS. URBAN
MARKETS
 Rural Vs Urban markets
40

 It is important to understand why rural marketing is different from

urban marketing. Due to significant differences in almost all the
major marketing variables, it becomes very difficult to optimally
tap the rural market potential with an urban mindset. In most
cases, it requires a modified approach, philosophy and marketing
mix.
 Therefore the domain of rural marketing is significantly different
from the way marketing is planned and implemented in urban
areas. The positive results achieved by HLL‘s Project Shakti,
Colgate‘s Project Jagaruti, etc., because they had structured their
rural marketing in terms  of planning, effort, operations,
distinctively from their urban marketing. This proves the 
justification for treating and approaching rural marketing
distinctively from urban marketing.
 Differences between rural marketing &
urban marketing
41

Aspect Urban Rural

Philosophy Marketing &social Marketing & social

concepts concepts development
& relationship market marketing
Consumers:‐
Location Concentrated Widely spread
Literacy High Low
Income High Low
Expenditure Planned &even Seasonal &variations
Needs High level Low level
Innovations Faster Slow
 Continued…
42

Distribution Whole seller, Village shops

channels retailers,
supermarkets,
speciality
stores, authorised
store
rooms
Advertising Print, audio, visual T.v, radio, print media to some
media, extent
outdoors,
exhibitions etc
Competition Among units in Among unorganized sector
organized
sector
 Continued…
43

Demand High Low

Product High Low

awareness

Quality Good Moderate

preference

Price sensitive Yes Very much in rural

Product High Limited

availability

Transport facility Good Moderate

UNIT 1: Introduction to Rural
Marketing

4
PROBLEMS IN RURAL
MARKETING
 Problems in Rural marketing
45

Unevenly Scattered Population – The spread of population in about 4000 cities and
towns is to the extent of 25% and the balance is in six lakh villages. Only 6300 villages
have a population of more than 500. This makes the marketers go through a lot of
difficulty to reach out to the rural masses effectively.
Underdeveloped People and Underdeveloped Market – Since 1947 a number of
initiatives have been taken to improve the quality of life in rural areas. In 1947 the rank
of India in terms of poverty, unemployment and level of development was 86 in the
world but in 1991 it reached the level of 123. The situation has further worsened and the
1996 report on Human Development Index shows that India ranks 136th in 156
countries of the world.
Lack of proper Physical Communication Facilities – In India only 50% of the road
length is provided with a proper surface. About 36% of the villages in the country do
not have road connection and over 65% of our villages are without all-weather road.
Thus the road grid makes distribution cost higher , as the road grid as a whole suffers
from serious capacity constraints, delays, congestions, fuel wastage and higher vehicle
operating costs, marketers face a lot of problems in distribution of products.
 Contd…
46

Low per capita incomes – Share of rural income accounted for 55.6 percent with 74.6
percent of country‟s population, thus reducing the demand of expensive products.
Many Languages and Dialects – In India, the number of languages and dialects vary
widely from state to state , region to region. The number of languages spoken are only
16, the total number of dialects is estimated to be around 850. The messages to be
delivered in the local languages and dialects is a big problem to the marketers.
Low level of literacy – This leads to the problem of communication for promotion
purposes. In this case, print medium becomes less effective and the dependence on audio
visual messages is more relevant in rural areas.
Logistics Problems – The rural markets have few selling points like retailers, co-
operatives, haats and melas. Lack of infrastructure for storage and handling and limited
transport facilities act as a constraint for marketing action.
Low Exposure to Market Stimuli – In rural areas, the rural people have low exposure
to branded products, low product exposure, limited sources of information and learning
which creates big challenge to the marketers to stimulate the rural consumers.
 UNIT 2: Rural marketing 47

UNIT 2. RURAL MARKETING

environment
ENVIRONMENT: POPULATION,
OCCUPATION PATTERN, INCOME
GENERATION, LOCATION OF RURAL
POPULATION, EXPENDITURE PATTERN,
LITERACY LEVEL, LAND DISTRIBUTION,
LAND USE PATTERN, IRRIGATION,
DEVELOPMENT PROGRAMS,
INFRASTRUCTURE FACILITIES, RURAL
CREDIT INSTITUTIONS, RURAL RETAIL
OUTLETS.
UNIT 2: Rural marketing environment

1
POPULATION,
OCCUPATION PATTERN,
INCOME GENERATION
 Study of Rural environment
49

 Consumer decisions and actions can be properly

comprehend only when the force field in which they
are operating is understood.
 Study of environmental factors is important for
marketers to realize the developments and trends
rather than know the static picture of the
environment.
 Today’s decisions are not only for current problems
but also for future opportunities, performance and
results.
 Rural Environment
50

 Social Environment – Population and households, education

and literacy levels, social groups, festivals and melas,
entertainment and arts.
 Technological Environment – Power and energy sources,
postal services, telecommunications, information and
communication technology, appropriate technology and
innovations.
 Economic environment – Occupations, land distribution, land
use pattern, irrigation, asset holding, income, consumption,
savings, disposable incomes, rural lifestyles and sales potential,
rural credit institutions, rural retail outlets, micro financing and
rural industry.
 Political Environment – Development initiatives and
 Population
51

 Country‟s population : 1353 million

 Share of rural population : 66 percent
 No. of households : 205.9 million (33% are in urban areas and
67% in rural areas.)
 Average family size in the country – 5 members
 Rural Family size – 5.08
 Low income states: Assam, Bihar, Madhya Pradesh,
Meghalaya, Orissa, Rajasthan, Uttar Pradesh, Chattisgarh,
Uttaranchal and Jharkhand.
 Middle Income States : Andhra Pradesh, Himachal Pradesh,
Karnataka, Kerala, Tamil Nadu and West Bengal
 High Income States : Goa, Gujarat, Haryana, Maharashtra,
Punjab, Pondicherry, Chandigarh and Delhi
 Distribution of Population
52
53
UNIT 2: Rural marketing environment

2
LOCATION OF RURAL
POPULATION, EXPENDITURE
PATTERN, LITERACY LEVEL,
LAND DISTRIBUTION
UNIT 2: Rural marketing environment

3
LAND USE PATTERN,
IRRIGATION
UNIT 2: Rural marketing environment

DEVELOPMENT4
PROGRAMS,
INFRASTRUCTURE
FACILITIES
UNIT 2: Rural marketing environment

5
RURAL CREDIT
INSTITUTIONS
 Regional Rural Banks
58

 Set up under an Act of Parliament in 1976 with the

objective of developing the rural economy through
the promotion of agriculture, trade and commerce
and industry and by extending credit to small and
marginal farmers.
 Authorized capital of RRB is Rs. 5 crore.
 Cooperative Banks
59

There is a three-tier pyramidal cooperative credit

structure in the rural cooperative banking sector, with
the
 State cooperative bank (SCB) at the state level

 District Central Cooperative Bank at the district

level
 Primary Agricultural Cooperative Society at the

village level, essentially to ensure flows of short-

term credit for production purposes.
 NABARD
60

 NABARD has been the primary government institution

dedicated to developing systems and delivering institutional
finance in rural for both the farm sector and the non-farm
sector. It refinances assistance for financing farm
mechanization, i.e. purchase of tractors, power tillers and also
the accessories.
 It also provides agricultural credit through the Kisan Credit
Card. This scheme aims at the provision of adequate and
timely support from the banking system to the farmers for
their cultivation needs, including the purchase of inputs in a
flexible and cost-effective manner.
 Innovations in the rural credit domains by
61
NABARD
 Self-help groups and micro finance
 Farmers clubs
 Rural Infrastructure Development Fund
 Watershed Development
 Tribal Development
 Women and Development
 District Rural Industries Project
 Rural Entrepreneurship Development Programme
 Rural marketing
 Revival of the Short term Rural Co-operative Structure
 Co-financing
UNIT 2: Rural marketing environment

6
RURAL RETAIL OUTLETS
63
UNIT 1: Introduction to Rural
Marketing

5
RURAL AREAS
REQUIREMENT
 Rural Areas Requirement
65

Considering the importance of agriculture and rural majority the nine five
year plans have made considerable progress in improving the agriculture
sector and the rural farmer. The rural requirements vary from state to state
and the priorities also change. Rural requirements are listed under:
 Improved seeds and fertilizers
 Increased means and methods of irrigation
 Multipurpose farming
 Use of modern farming equipment and methods
 Warehousing and preservation of agri-produce.
 Marketing development and remunerative prices for the produce
 Improvements in pest control and preservation of crops.
 R & D work and benchmarking with the best agricultural practices, yields in the
world
 Training of Farmers
 Increased investments and credit facilities
 Contd…
66

 Small land holdings to be consolidated and improvements in

tenancy.
 Animal heath and veterinary facilities.
 Literacy of farmers and families.
 Develop village agro-based industries/cottage and village industries
 Population control
 Crop insurance
 Health of farmers
 Environment friendly agriculture methods
 Water availability management
 Remunerative price for milk and milk products and
 Provision for subsidiary occupations and incomes
67
 68

UNIT 2: RURAL MARKETING

ENVIRONMENT
 Mandis
69

 Agricultural markets set up by state government to procure

agricultural products directly from farmers.
 Located in high production centres of different crops, these
markets may be categorized as grain mandis, soya mandis,
cotton mandis.
 Most agricultural areas with a Population of more than 10000
have mandis and caters to 136000 population.
 Displays the latest commodity prices. The price quote from
the seller may vary depending on factors such as quantity,
packaging, delivery terms, payment method etc.
 Road Connectivity
70

 Pradhan Mantri Gram Sadak Yojana – It was

launched in December 2000 with the objective of
providing connectivity through good all-weather
roads to all unconnected habitations with a
population of more than 500 persons, with an
anticipated investment of Rs 60000 crore.
 Mobile Postman Scheme
71

 The scheme is designed to make a telephone

available at the doorstep of every rural household.
Under the scheme, a mobile telephone will be
provided to a postman. When the postman goes to a
house to deliver a letter, he will carry a telephone
with him. Since a postman reaches practically every
house, the scheme will enable the telephone services
to be made available practically to all citizens in his
area.
 Pradhan Mantri Gramodaya Yojana
72

 This Yojana for the primary health sector is an

initiative to strengthen and revitalize the primary
health infrastructure for the improved provisioning of
basic minimum services in rural areas so as to
improve the quality of life. The Planning
Commission of India has allocated additional Central
Assistance of Rs 2800 crore for six sectors, i.e. rural
electrification, primary health, primary education,
shelter, drinking water and nutrition.
 Rural Electrification
73

 Indian planners visualized the necessity of Electrical Energy and

included it in the Five Year Plans.
 A rural electrification programme was devised for increasing the
infrastructural input for agricultural production programs. To
implement the program effectively, the Rural Electric
Corporation (REC) was set up.
 REC has been a catalyst for rural development. The Corporation
has sanctioned financial assistance of Rs. 28,588 crore under
37335 rural electrification projects so far. About 3.05 lakh
villages have been electrified through REC funded schemes.
 Over 78 lakh pumpsets stand energised with the corporation’s
assistance.
 UNIT 3: Characteristics of Rural 74

Consumer

UNIT 3. CHARACTERISTICS OF RURAL

CONSUMER: STAGES OF THE LIFE CYCLE.
CONSUMER BEHAVIOUR, FACTORS
AFFECTING CONSUMER BEHAVIOR,
RESEARCHING RURAL MARKET,
SANITIZING RURAL MARKET, RESEARCH
DESIGN- REFERENCE FRAME.
UNIT 3: Characteristics of Rural
Consumer

1
STAGES OF THE LIFE
CYCLE
76

Classification The rural consumers are classified into

the following groups based on their economic status:
The Affluent Group
 They are cash rich farmers.

 Very few in number.

 They have affordability but do not form a demand

base large enough for marketing firms to depend on.

 Wheat farmers in Punjab and rice merchants of

Andhra Pradesh fall in this category.

77

The Middle Class

 One of the largest segments for manufactured goods.

 It is fast expanding.

 Farmers cultivating sugar cane in UP and Karnataka fall in this

category.
The Poor
 This constitutes a huge segment.

 Purchasing power is less, but strength is more.

 They receive grants from the government and reap the benefits

of many such schemes and may move towards the middle class.
 The farmers of Bihar and Orissa fall under this category
 CONSUMPTION BY AGE AND
STAGES OF THE LIFE CYCLE
78
 OCCUPATION AND INCOME
79

In the rural sector, a range of goods and services

beyond the very basic ones are bought by a consumer,
influenced by the occupation and income of the
individual. Fishermen buy a boat and large nets,
whereas a farmer opts first for a tractor and pump set.
 LIFESTYLE – COMPARISON OF RURAL
AND URBAN LIFESTYLE
80
UNIT 3: Characteristics of Rural
Consumer

2
CONSUMER BEAHVIOUR
 Characteristics
82

The rural consumer has a very high involvement in any product

purchased.
• He purchases products more often (mostly weekly), usually in
small quantities.
• He is very quality conscious but value for money is of prime
importance.
• He looks more for functionality of the product rather than frills
associated which he cannot use but for which he will have to pay
extra.
• He is brand loyal. Once loyalty formed is difficult to dislodge.
• He understands symbols and colours better, and looks for
endorsement by local leaders or icons.
83

• The source of information is critical for him, as he is

influenced by information received and opinion formed through
various resources in his purchasing decisions.
• Purchasing decisions are usually taken by the eldest member of
the family.
• Brisk buying is done after the harvesting period. Major
purchasing is done during the festivals.
• In many cases, the buyer is different from the user.
 LIFESTYLE OF RURAL
84
CONSUMER
 Rural Consumer is very religious – Dabur developed
a religious calendars and gave Hanuman Chalisa
along with their products. Ganga made of milk and
holy water of Ganga. Govinda as a Brand
Ambassador.
 Rural Consumers prefer to work Hard themselves –
Machines to be sold on the basis of benefits offered
and not on the basis of comfort and convenience.
 Strong Family ties and respect for Family Values
 Likes to play Cards and Hangs out at Choupal.
 RURAL SHOPPING HABITS :
CONSUMER INSIGHTS
85

 Preference for small or medium Package –

Britannia‟s Tiger Biscuits, Cavinkare’s Chik
Shampoo, and small Coke for Rs. 5.
 Role of Retailer
 Role of Opinion Leaders for durables – Opinion
Leaders like Sarpanch, village elders and educated
Youth of the village.
UNIT 3: Characteristics of Rural
Consumer

3
FACTORS AFFECTING
CONSUMER BEAHVIOUR
 FACTORS AFFECTING BUYING
BEHAVIOR
87
 FACTORS AFFECTING CONSUMER
BEHAVIOR
88

CULTURAL FACTORS
 Customs are socially acceptable norms that have been in

practice over a long period of time. Rural India, being until now
largely isolated from new practices and customs, tends to follow
the customs of its traditional society. In urban India, however, in
the due course of time, many of the customs have changed and
continue to change, a change that is accelerated when a new
generation adopts new value systems and practices in order to
fit into perceived modernity.
 Regional influences can be defined as a set of attributes

exhibited in clothing, preference for certain types of cereals,

food preparations etc. For eg. Tamilians prefer to cook their
native idli with sambhar.
89

 Traditions are long standing beliefs that are believed to be true

in nature and are often practised in a ritualistic manner,
without knowing the origin or questioning the need to do so.
 For eg. A tradition that after washing/shampooing the hair, it
should not be left open is based on a belief in some parts of
rural India that this gives an opportunity for evil spirits to
enter. Shampoo ads showing the bounce in the woman‟s hair
after a wash may communicate a message quite different from
what was intended.
90

SOCIAL FACTORS
Touching feet
Hair should not be left open after washing.
Housing in rural areas based on caste and in urban areas based on
Socio economic class.
Influenced by NGOs, Opinion Leaders, Aanganwadi workers,
SHG members.
Joint Family in rural areas and Nuclear Family in urban areas.
Role and Status of Sarpanch, retired military personnel, priests,
teachers, medical practioners.
Product choice features
Very Social in Rural Areas
 PRODUCTS AND STATUS SYMBOLS
91
92

TECHNOLOGICAL FACTORS
 Rural India is beginning to experience the impact of

technology, leading to major changes that are transforming the

countryside. Opportunities, products, services, knowledge,
information are all exploding.
 Introduced with the purpose and need to create an instant

network for good governance, telecommunications has

transformed rural India in so many other ways that is of
interest to marketers. STD booths and PCOs have emerged as
the new community centre in the villages for the exchange of
news and views for every age group and therefore an
important place fro marketers to display brand communication
messages.
93

ECONOMIC FACTORS
 The entire economic environment of rural India shows a much

improved prosperity due to repeated benevolent monsoons,

new and improved techniques, higher quality of inputs and
increasing awareness and education on agriculture.
 Banking is reaching out to the doorstep of more and more

farmers. Finance is now more readily available and so is

credit.
94

POLITICAL FACTORS
 Schemes launched by Government has led to the development

of rural areas.
 The Government of India is empowering the Panchayati Raj

and other village institutions by making available

developmental funds. This has resulted in major purchases of
equipment and materials needed for infrastructure
development.
 30% compulsory representation of women in local bodies is

leading to their empowerment, encouraging women in rural

India to explore income generation and entrepreneurial
activities.
UNIT 3: Characteristics of Rural
Consumer

3
RESEARCHING RURAL
MARKET
 Need for Research in Rural
96
Market
 As rural Market is relatively new compared to its
urban counterparts, there is a need to understand
rural India, its belief and practices.
 There are many challenges to designing and
conducting the rural marketing research. There is
lack of real time information, data on rural markets,
literacy etc.
 Rural Market Research
97

 The systematic design , collection, analysis and

reporting of data and findings relevant to a specific
marketing situation facing by the company in rural
market.
 “The systematic planning, gathering, recording and
analyzing data about problems related to marketing
of goods and services.”
-American Marketing Asso.
 Rural Market Research Process
98

8 Steps:
 1. Defining Objective

 2. Budgeting

 3. Research Design

 4. Sampling

 5. Developing Research Instrument

 6. Field Work

 7. Data Collecting and Analysis

 8. Findings and Decision Making

 Defining Objective
99

 Involves two tasks –

 1. Business Objective
 States the purpose for which organization
 conducting the research will use the
 findings of that research.
 2. Research Objective
 States the expected result output, which
 will help in taking decision to achieve
 business objective.
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101
102
103
UNIT 3: Characteristics of Rural
Consumer

4
SANITIZING RURAL
MARKET
105
106
107
108
UNIT 3: Characteristics of Rural
Consumer

5
FACTORS AFFECTING
CONSUMER BEAHVIOUR
110
111
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