Rural marketing

A DISSERTATION REPORT

“ To analyze the marketing of consumer products

(both durable and non durable products) in rural
areas.”

SUBMITTED BY:
DEVENDRA SINGH
MBA 4 sem (2008-2010)
0815270026

UNDER THE GUIDANCE OF:

MR. SANDEEP SHARMA
FACULTY

MANGALMAY INSTITUTE OF MANAGEMENT AND

TECHNOLOGY

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Acknowledgement
I consider my proud privilege to express deep sense of gratitude to Mr. SUNDEEP

SHARMA for his admirable and valuable guidance, keen interest, encouragement

and constructive suggestions during the course of the project.

I would also like to thank my father Mr. RAGHVENDRA SINGH ,for their

insperation and moral support received in completing this work as for collecting t

the data i had to visit so many rural areas or villages.

Devendra singh
MBA (marketing)
4TH Semester

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TABLE OF CONTENTS

TOPIC PAGE NUMBER

EXECUTIVE SUMMARY 06

RESEARCH METHODOLOGY O8

REVIEW OF LITERATURE 11

INTRODUCTION 15

FINDINGS AND ANALYSIS 129

CONCLUSIONS 147

SUGGESTIONS AND 150

RECOMMENDATIONS

APPENDIX 151

BIBLIOGRAPHY 157

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EXECUTIVE SUMMARY
India’s way is not Europe’s. India is not Calcutta and Bombay. India lives
in her seven hundred thousand villages.....................Mahatma Gandhi, 1926

Marketing in developing countries like India have often been borrowed

from the western world. Concepts like Brand identity, Customer relationship
management, 4 Ps of the marketing mix, Consumer behavior process;
Segmentation, targeting and positioning etc. have often been lifted straight from
the marketing intelligentsia abroad and adopted in Indian conditions, often with
minimal success. Reason lies not in the fault of such concepts, but their
integration with the Indian ethos and culture.
The rural India offers a tremendous market potential. Nearly two-thirds
of all middle-income households in the country are in rural India and represents
half of India’s buying potential. Despite, the strong potential the rural markets are
by and large less exploited. Consider the market, out of five lakhs villages in India
only one lakh have been tapped so far. According to us if the rural market has to
be adequately tapped, there has to be a change in the way marketing concepts
learnt in B-schools with adequate adoption according to scenarios prevalent in
rural India. The paper thereby present the modified version of Philip Kotler’s
famous marketing mix consisting of 4Ps. The focus is on its modification and
subsequent customization to Indian rural markets perspective. The 4Ps have to be
modified to include 1P i.e. Packaging and 1R i.e. Retailer as special focus areas.
Further to ensure the sustainability of the marketing mix two Es i.e. Education and
Empowerment have to be at the core as they help in generating widespread
participation from the rural clientele by enhancing their standard of living. The
Products in the rural market should essentially operate at the basic and expected
level of product classification. They should essentially meet the basic needs of the
consumer and should be a no-frill product, as the consumer would not be valuing
much any further addition to the product concept. Companies also face a
daunting task in communicating about their products to the consumer due to lack
of literacy and failure of traditional media to penetrate in the rural households.

Hence, the advertising mix has to be more towards non-conventional yet effective
medium like Puppetry, Folk Theater Song, Wall Painting, Demonstration, Posters,
Agricultural Games, NGOs network, etc. Thus overall either the product or

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communication or preferably both need to be customized to target the rural

customer.
In terms of physical distribution due to lack of infrastructure the costs are
very exorbitant to reach the rural customer. Thus, mediums like rural marketing
vehicles and melas and haats provide better opportunities to meet customer
needs. Also the existing distribution would need a transformation to achieve the
required penetration levels as success of Project Streamline of HLL has shown.
Since, the value for money concept is more important rural customers, there has
to be an approach of treating customer as budget seeking consumer. Here, fitting
the consumer needs into an affordable price point is pursued first and then other
features of product are fitted in. Similarly, packaging has to meet customer needs
of better brand recall and introducing favorable price points. At the same time the
importance of retailer has to be recognized where he is one of the most major
influencer is customers decision making process. He acts as the friend and guide
in this process and hence, needs to be managed effectively through promotion
programmes and incentives to promote the brand of a company. In order to
bridge the gap between Philip Kotler and countryside Indian what is needed the
appreciation of unique features of rural India and thus, responding to them by
making adequate improvements in the application of the marketing concepts
learnt in the class.
For achieving the desired results of capturing the rural
customer a comprehensive approach to the traditional marketing concepts has to
be taken. This marketing mix has to be responsive to customers needs and fit into
his life as a tool of self-enhancement. To be successful the concept of marketing
has to be taken in conjunction with its economic, psychological and social
implications.

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RESEARCH METHODOLOGY
OBJECTIVES OF THE STUDY:
Any task without sound objectives is like Tree without roots. Similarly in case
of any research study undertaken, initially the objectives of the same are
determined and accordingly the further steps are taken on. A research study may
have many objectives but all these objectives revolve around one major objective
which is the focus of the study. In this study, the focus is on the emergence of
Rural markets as the most happening market on which every marketer has an
eye. And so this study will be based on studying the emergence of rural market in
various contexts.
The main objective of the study is to analyse and present the marketing of
consumer products in rural areas. The following objectives have been set forth.
They are to:

1) Present a rural marketing perspective.

2) Present a profile of Indian Rural market.
3) Study and analyse the consumer behavior in rural areas.
4) Examine the product and brand penetration in rural markets.
5) Analyze marketing of consumer product in rural markets.
6) Present marketing strategy frame for marketing consumer products in rural
areas.

SCOPE OF THE STUDY:

The study is restricted to selected districts of UTTAR PRADESH. Further,
product and brand penetration is examined. As regards marketing of consumer
products in rural areas, the study analyzes products from non durable category ( a
bathing soap, detergents, tea, coffee, shampoo) and from durable category ( a
wrist watch, television, refrigerator, fan and bicycle).

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Data collection

Sample unit:
1. working people (including men &women), basically farmers.
2. college students
3. school students
4. senior citizen

Sample size:
1. working people:32%
2. college students:29%
3. school students:23%
4. senior citizens:16%

Sampling region:
1. I have selected uttar pradesh, of Uttar Pradesh as the area of study.
2. I have chosen BHOWAPUR, MORTI, SHAHPUR and ATTOR as areas of
research.
The population status of these areas can be shown in a
tabulated manner, which is given as follows:

Area Population

BHOWAPUR 2500
MORTI 3000
SHAHPUR 5000
ATTOR 4000

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Data collection method:

1.Primary data: it will be collected with the help of a self administered
questionnaire. This questionnaire aims to gather information related to various
Branded products.

Questionnaire design:
As the questionnaire is self administrated one, the survey is kept simple and user
friendly. Words Used in questionnaire are readily Understandable to all
respondent. Also technical jargons are avoided to ensure that there is no
confusion for respondents.

2.Secondary data: it will be collected with the help of books, research papers,
magazines, news papers, journals, Internet, etc.

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Review of Literature
Rural market is one of the best opportunities for the FMCG sector. In some sense
we can say that rural market is future of FMCG.

1.Basu Purba (2004),suggested that the lifestyle of rural consumers is changing.

Rural Indian market and the marketing strategy have become the latest marketing
buzzword for most of the FMCG majors. She added the strategies of different
FMCG companies for capturing rural market like Titan’s Sonata watches, Coco
Cola’s 200mlbottle, different strategies of HUL and Marico etc. She takes into
consideration the study of National Council for Applied Economic Research
(NCAER).According to the NCAER
projections, the number of middle and high-income households in rural area is
expected to grow from 140 million to 190 million by 2007.In urban India, the
same is expected to grow from 65 million to 79 million. Thus, the absolute size of
rural India is expected to be double that of urban India.

2.Tognatta Pradeep (2003),suggested that ,the economic growth in India's

agricultural sector in last year was over 10%,compared with 8.5%in the industrial
sector. This implies a huge market potentiality for the marketer to meet up
increasing demand. Factors such as village psyche,
strong distribution network and market awareness are few prerequisites for
making a dent in the rural markets. The model is of the stolid Anglo-Dutch
conglomerate Unilever Group, which has enjoyed a century-long presence in India
through its subsidiary Hindustan Lever Ltd. It was Hindustan Lever that several
years ago popularized the idea of selling its products in tiny packages. Its sachets
of detergent and shampoo are in great demand in Indian villages. Britannia with
its low priced Tiger brand biscuits has become some of the success story in rural
marketing.

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3. Dr. N. Rajendhiran(MBA, PhD)/ Mr. S. Saiganesh(MBA, MA, M.Phil)/ Ms. P.

Asha(MBA)

Prime Minister Dr. Manmohan Singh recently talked about his vision for rural India:
"My vision of rural India is of a modern agrarian, industrial and services economy co-
existing side by side, where people can live in well-equipped villages and commute
easily to work, be it on the farm or in the non-farm economy. There is much that
modern science and technology can do to realise this vision. Rural incomes have to
be increased. Rural infrastructure has to be improved. Rural health and education
needs have to be met. Employment opportunities have to be created in rural areas."

'Go rural' is the slogan of marketing gurus after analyzing the socio-economic
changes in villages. The Rural population is nearly three times the urban, so
that Rural consumers have become the prime target market for consumer
durable and non-durable products, food, construction, electrical, electronics,
automobiles, banks, insurance companies and other sectors besides hundred per
cent of agri-input products such as seeds, fertilizers, pesticides and farm
machinery. The Indian rural market today accounts for only about Rs 8 billion of the
total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly
there seems to be a long way ahead. Although a lot is spoken about the immense
potential of the unexplored rural market, advertisers and companies find it easier to
vie for a share of the already divided urban pie.

The success of a br and in the Indian rural market is as unpredictable as rain. It has

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always been difficult to gauge the rural market. Many brands, which should have
been successful, have failed miserably. More often than not, people attribute
rural market success to luck. Therefore, marketers need to understand the
social dynamics and attitude variations within each village though nationally it
follows a consistent pattern looking at the challenges and the opportunities which
rural markets offer to the marketers it can be said that the future is very
promising for those who can understand the dynamics of rural markets and
exploit them to their best advantage. A radical change in attitudes of marketers
towards the vibrant and burgeoning rural markets is called for, so they can
successfully impress on the 230 million rural consumers spread over approximately
six hundred thousand villages in rural India.

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RURAL INDIA…a new dawn

India needs creative solutions to start a revolution which can

take its villages fast forward in time – converting them into
economically viable units and growth engines, harnessing the
power of the villagers, and opening up new horizons with the
promise of a better tomorrow.

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INTRODUCTION
“India lives in her villages”.
As described by Adi Godrej, Chairman , Godrej Group – “The rural
consumers is discerning and the rural market is vibrant . At the current of
growth , it will soon outstrip the urban market. The rural market is no longer
sleeping but we are”.
Before gamboling into issues like where the Indian rural market stands
and the opportunities for corporate’s to explore there... let's look at the definition
of urban and rural India. The Census defined urban India as - "All the places that
fall within the administrative limits of a municipal corporation, municipality,
cantonment board etc or have a population of at least 5,000 and have at least 75
per cent male working population in outside the primary sector and have a
population density of at least 400 per square kilometer. Rural India, on the other
hand, comprises all places that are not urban!"

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In our country over 70%of the total population live in villages. There are states
like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies form 8 to

9 percent. Agriculture and agriculture related activities contribute to about 75%of

the income in rural areas. The general impression is that the rural markets have
potential only for agricultural inputs like seeds, fertilizers and pesticides, cattle
feed and agricultural machinery. More than 50%of the national income is
generated in rural India and there are opportunities to market modern goods and
services in rural areas and also market agricultural products in urban areas. Infact
it has been estimated that the rural markets are growing at fives times the rate of
urban markets. About 70% of bicycles, mechanical watches and radios and about
60%of batteries, sewing machine and table fans are sold in rural India. At the
same time the sales of color television, washing machines, refrigerators,
shampoos, face cream, mosquito repellent and tooth paste are very low and
there is tremendous potential for such products in rural markets.

Now for some facts and figures The Indian rural market today accounts for only
about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per
cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6
per cent of the total share. So clearly there seems to be a long way ahead.

Time and again marketing practitioners have waxed eloquent about the potential
of the rural market. But when one zeroes in on the companies that focus on the
rural market, a mere handful names come to mind. Hindustan Lever Limited (HLL)
is top of the mind with their successful rural marketing projects like 'Project
Shakti' and 'Operation Bharat'. The lynchpin of HLL's strategy has been to focus on
penetrating the market down the line and focusing on price point. Furthermore,
activating the brand in the rural market through activities, which are in line with
the brand itself, is what sums up HLL's agenda as far as the rural market is
concerned informs MindShare Fulcrum general manager R Gowthaman. Amul is
another case in point of aggressive rural marketing. Some of the other corporates
that are slowly making headway in this area are Coca Cola India, Colgate,
Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin
Kare, Britannia and Hero Honda to name a few.

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Khaitan fans' ad on a horse cart Wheel's wall painting

We can safely say that until some years ago, the rural market was being given a
step-motherly treatment by many companies and advertising to rural consumers
was usually a hit and miss affair. More often than not, the agenda being to take a
short-cut route by pushing urban communication to the rural market by merely
transliterating the ad copy. Hence advertising that is rooted in urban sensitivities
didn't touch the hearts and minds of the rural consumer. While, this is definitely
changing, the process is slow. The greatest challenge for advertisers and
marketers continues to be in finding the right mix that will have a pan-Indian rural
appeal. Coca Cola, with their Aamir Khan ad campaign succeeded in providing just
that.

Corporates are still apprehensive to "Go Rural." A few

agencies that are trying to create awareness about the rural
Lifebuoy's wall
painting in rural Page
15
India
 Rural marketing

market and its importance are Anugrah Madison, Sampark Marketing and
Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M Outreach, Linterland
and RC&M, to name a few. Also, the first four agencies mentioned above have
come together to form The Rural Network. The paramount objective of the
Network is to get clients who are looking for a national strategy in rural marketing
and help them in executing it across different regions.

Interestingly, the rural market is growing at a far greater speed than its urban
counterpart. "All the data provided by various agencies like NCAER, Francis Kanoi
etc shows that rural markets are growing faster than urban markets in certain
product categories at least. The share of FMCG products in rural markets is 53 per
cent, durables boasts of 59 per cent
market share. Therefore one can claim
that rural markets are growing faster
than urban markets," says Sampark
Marketing and Advertising Solutions Pvt
Ltd managing director R A Patankar.

Coca-Cola India tapped the rural market

in a big way when it introduced bottles
priced at Rs 5 and "Yaara da Tashan..." McCann Erickson's
backed it with the ads with Aamir Khan created universal
Aamir Khan ads. The appeal for Coca Cola
company, on its
behalf, has also been
investing steadily to build their infrastructure to meet the
growing needs of the rural market, which reiterates the fact
that this multinational has realised the potential of the rural
In 2000, ITC took market is going strength to strength to tap the same.
an initiative to
develop direct
contact with
farmers who
Clearly the main challenge that one faces while dealing with
lived in far-flung
rural marketing is the basic understanding of the rural
villages in consumer who is very different from his urban counterpart.
Madhya Also distribution remains to be the single largest problem
Pradesh. ITC's E-
choupal was the
result of this Page
16
initiative.
 Rural marketing

marketers face today when it comes to going rural. "Reaching your product to
remote locations spread over 600,000 villages and poor infrastructure - roads,
telecommunication etc and lower levels of literacy are a few hinges that come in
the way of marketers to reach the rural market," says MART managing director
Pradeep Kashyap.

Citing other challenges in rural marketing, Patankar says, "Campaigns have to be

tailor made for each product category and each of the regions where the
campaign is to be executed. Therefore a thorough knowledge of the nuances of
language, dialects and familiarity with prevailing customs in the regions that you
want to work for is essential. The other challenge is the reach and the available
means of reaching out to these markets, hence the video van is one of the very
effective means of reaching out physically to the rural consumers."

The fact of the matter remains that when compared to the Indian urban society,
which is turning into a consumerism society; the rural consumer will always
remain driven by his needs first and will therefore be cost conscious and thrifty in
his spending habits. "Decision-making is still conscious and deliberated among the
rural community. But nevertheless, the future no doubt lies in the rural markets,
since the size of the rural market is growing at a good pace. There was a time
when market predictions were made on the basis of the state of the monsoon but
this trend has changed over the years; there is a large non farming sector, which
generates almost 40 per cent of the rural wealth. Hence the growth in the rural
markets will be sustained to a large extent by this class in addition to the farmer
who will always be the mainstay of the rural economy," affirms Patankar.

"Although the melting of the urban - rural divide will take a while, this is not for
want of the availability of the means but for want of the rural consumer's mindset
to change; which has its own logic, which is driven by tradition, custom and values
that are difficult to shed," he points out.

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Fulcrum's Gowthaman says, "The

biggest impending factor or deterrent
on rural monies going up is that there is
a general sense of trying to benchmark
cost per contact (CPC). The television
CPC is going to anyways be cheaper to
rural CPC and unless and until the Satellite dish antennas reach rural India
volume - value equation turns the other
way round, you will not be able to spend disproportionate monies in the rural
market."

For HLL, a one rupee or a five rupee sachet or the Kutti

Hamam (the small Hamam) helps in giving the
consumers a trial opportunity. While it does help in
generate volume but not in terms of values. "Till the
time that volume - value equation is managed better,
the CPC is preventing anybody to look at rural at a
large scale activation programme," reiterates
Gowthaman.

Typical shop in rural India Ultimately, the ball lies in the court of rural marketers.
stocked with sachets, etc It's all about how one approaches the market, takes
up the challenge of selling products and concepts
through innovative media design and more
importantly interactivity.

Anugrah Madison's chairman and managing director RV Rajan sums up, "There is
better scope for language writers who understands the rural and regional pulse
better. I also see great scope for regional specialists in the areas of rural
marketing - specialists like Event Managers, Wall painters, folk artists, audio visual
production houses. In fact all those people who have specialised knowledge of a
region are bound to do well, thanks to the demands of the rural marketers."

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So the fact remains that the rural market in India has great potential, which is just
waiting to be tapped. Progress has been made in this area by some, but there
seems to be a long way for marketers to go in order to derive and reap maximum
benefits. Moreover, rural India is not so poor as it used to be a decade or so back.
Things are sure a changing!

INDIA INFRASTRUCTURE
The best barometer of country’s economic standing is measured by its GDP. India,
the second most populated country of more than 1100 million has emerged as
one of the fastest growing economies. It is a republic with a federal structure and
well-developed independent judiciary with political consensus in reforms and

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stable democratic environment .In 2008-09 India’s economy-GDP grew by 6.5%

due to global recession. In the previous four years,economy grew at 9%.The
Indian economy is expected sustain a growth rate of 8% for the next three years
upto 2012. With the expected average annual compounded growth rate of 8.5%,
India's GDP is expected to be USD 1.4 trillion by 2017 and USD 2.8 trillion by 2027.
Service sector contribute to 50% of India‘s GDP and the Industry and agriculture
sector 25% each.

Investment Opportunities In Indian Infrastructure  

The robust current growth in GDP has exposed the grave inadequacies in the
country’s infrastructure sectors. The strong population growth in India and its
booming economy are generating enormous pressures to modernize and expand
India’s infrastructure. The creation of world class infrastructure would require
large investments in addressing the deficit in quality and quantity. More than USD
475 bn worth of investment is to flow into India’s infrastructure by 2012. No

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country in the world other than India needs and can absorb so many funds for the
infrastructure sector. With the above investments India’s infrastructure would be
equal to the best in the world by 2017.

In the next five years planned infrastructure investment in India in some key
sectors are (at current prices): Modernization of highways -US$ 75 billion,
Development of civil aviation US$ 12 billion, Development of Irrigation system-
US$ 18 billion, Development of Ports-US$ 26 billion, Development of Railways-
US$ 71 billion, Development of Telecom- US$ 32 billion, Development of Power
-US$ 232 billion. Thus in the eleventh five year plan ,investment in the above
sectors (Aviation infrastructure ,Construction infrastructure, Highway
infrastructure ,Power infrastructure, Port infrastructure ,Telecom infrastructure )
will be US$ 384 billions(Rs 17,20,000 Crores) considering the huge infrastructure
market potential in India. In addition to the above, investments to the tune of 
US$ 91 billions have been planned in other infrastructure sectors like Tourism
infrastructure  ,Urban infrastructure ,Rural infrastructure, SEZs ,and water
infrastructure and sanitation infrastructure  thus making the total infrastructure
investments in the eleventh plan period 2007-08 to 2011-12 as US$475 billions.
Domestic and global infrastructure funds have exposure to Indian infrastructure
sectors.

Rural Marketing

Rural marketing involves the process of developing, pricing, promoting,

distributing rural specific product and a service leading to exchange between rural

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and urban market which satisfies consumer demand and also achieves
organizational objectives.

URBAN RURAL

RURAL URBAN

RURAL RURAL

It is a two-way marketing process wherein the transactions can be:

1. Urban to Rural: A major part of rural marketing falls into this category. It
involves the selling of products and services by urban marketers in rural
areas. These include: Pesticides, FMCG Products, Consumer durables, etc.
2. Rural to Urban: Transactions in this category basically fall under
agricultural marketing where a rural producer seeks to sell his produce in
an urban market. An agent or a middleman plays a crucial role in the
marketing process. The following are some of the important items sold
from the rural to urban areas: seeds, fruits and vegetables, milk and related
products, forest produce, spices, etc.
3. Rural to Rural: This includes the activities that take place between two
villages in close proximity to each other. The transactions relate to the
areas of expertise the particular village has. These include selling of
agricultural tools, cattle, carts and others to another village in its proximity.

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Rural marketing requires the understanding of the complexities. Indian

agricultural industry has been growing at a tremendous pace in the last few
decades. The rural areas are consuming a large number of industrial and urban
manufactured products. The rural agricultural production and consumption
process plays a predominant role in developing the Indian economy. This has
designed a new way for understanding a new process called Rural Marketing.
The concept of rural marketing has to be distinguished from Agricultural
marketing. Marketing is the process of identifying and satisfying customers needs
and providing them with adequate after sales service. Rural marketing is different
from agricultural marketing, which signifies marketing of rural products to the
urban consumer or institutional markets. Rural marketing basically deals with
delivering manufactured or processed inputs or services to rural producers, the
demand for which is basically a derived outcome.

Rural marketing scientists also term it as developmental marketing, as the

process of rural marketing involves an urban to rural activity, which in turn is

characterised by various peculiarities in terms of nature of market, products and

processes. Rural marketing differs from agricultural or consumer products
marketing in terms of the nature of transactions, which includes participants,
products, modalities, norms and outcomes. The participants in case of Rural
Marketing would also be different they include input manufacturers, dealers,
farmers, opinion makers, government agencies and traders.

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Rural marketing needs to combine concerns for profit with a concern for the
society, besides being titled towards profit. Rural market for agricultural inputs is
a case of market pull and not market push. Most of the jobs of marketing and
selling are left to the local dealers and retailers.

The market for input gets interlocked with other markets like output, consumer
goods, money and labour.

INDIAN RURAL MARKET:

Rural marketing in India is not much developed there are many hindrances in the
area of market, product design and positioning, pricing, distribution and
promotion. Companies need to understand rural marketing in a broader manner
not only to survive and grow in their business, but also a means to the
development of the rural economy. One has to have a strategic view of the rural
markets so as to know and understand the markets well. In the context of rural
marketing one has to understand the manipulation of marketing mix has to be
properly understood in terms of product usage. Product usage is central to price,

distribution, promotion, branding, company image and more important farmer

economics, thus any strategy in rural marketing should be given due attention and
importance by understanding the product usage, all elements of marketing mix
can be better organised and managed.

Evolution of Rural Marketing

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MAJOR SOURCE DESTINATION

PHASE ORIGIN FUNCTION
PRODUCTS MARKET MARKET
I Before Mid-
1960 (from
Agricultural Agricultural Rural Urban
independenc
Marketing
e to green Produce

revolution)
II Mid- Sixties
(Green
Marketing Agricultural Urban Rural
revolution to
Of
Pre- Inputs

liberalization Agricultural

period) Inputs

III Mid- Nineties Consumable

(Post- s And
Rural Urban & Rural
liberalization
Durables For Rural
period on Marketing

20th century) Consumptio

n&
Production

IV 21st century Developmen All products Urban & Urban &

tal & services Rural Rural
marketing

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 Rural marketing

1. Phase I ( from Independence to Green Revolution):

Before the advent of the Green revolution, the nature of rural market was
altogether different. Rural marketing then referred to the marketing of
rural products in rural & urban products.

2. Phase II (Green Revolution to Pre-liberalization period):

During these times, due to the advent & spread of the Green Revolution,
rural marketing represented marketing of agriculture inputs in rural
markets & marketing of rural produce in urban areas.

3. Phase III (Post-liberalization period on 20th century):

The third phase of rural marketing started after the liberalization of the
Indian economy. In this period, rural marketing represented the emerging,
distinct activity of attracting & serving rural markets to fulfill the need &
wants of rural households, peoples & their occupations.

4. Phase IV (21st century):

Learning from its rural marketing experiences after the independence, the
corporate world has finally realized the quick-fix solutions & piecemeal
approaches will deliver only limited results in the rural markets. And, if an
organization wants to tap the real potential of the rural market, it needs to
make a long-term commitment with this market. Its approach & strategies
must not focus in just selling products & services, but they should also aim
at creating an environment for this to happen.

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The objective of rural marketing in the current phase is the improvement of the
quality of life by satisfying the needs & wants of the customers, not through
atand-alone products or services, but by presenting comprehensive & integrated
solutions which might involve a set of inter-related products & services.

Till recently, the focus of marketers in India was the urban consumer and by large
number specific efforts were made to reach the rural markets. But now it is felt
that with the tempo of development accelerating in rural India, coupled with
increase in purchasing power, because of scientific agriculture, the changing life
style and consumption pattern of villagers with increase in education, social
mobility, improved means of transportations and communication and other

penetrations of mass media such as television and its various satellite channels
have exposed rural India to the outside world and hence their outlook to life has
also changed. Because of all these factors, rural India is now attracting more and
more marketers.

Increase in competition, saturated urban markets, more and move new products
demanding urban customers, made the companies to think about new potential
markets. Thus, Indian rural markets have caught the attention of many
companies, advertisers and multinational companies. According to a recent
survey conducted by the National Council for Applied Economic Research
(NCAER), the purchasing power of the rural people has increased due to increase
in productivity and better price commanded by the agricultural products. By and
large this rise in purchasing power remains unexploited and with the growing

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reach of the television, it is now quite easy for the marketers to capture these
markets.

Rural marketing has become the latest mantra of most corporate. Companies like
Hindustan Lever, Colgate Palmolive, Britannia and even Multinational Companies
(MNCs) like Pepsi, Coca Cola, L.G., Philips, and Calvin kare are all eyeing rural
markets to capture the large Indian market.

Coming to the frame work of Rural Marketing, Rural Marketing broadly involves
reaching the rural customer, understanding their needs and wants, supply of

goods and services to meet their requirements, carrying out after sales service
that leads to customer satisfaction and repeat purchase/sales.

The Indian growth story is now spreading itself to India's hinterlands. Rural India,
home to about two-thirds of the country’s 1 billion population, is not just
witnessing an increase in its income but also in consumption and production. The
union budget for 2009-10 hiked the allocation for the National Rural Employment
Guarantee Act (NREGA) to US$ 8.03 billion, giving a further boost to the rural
economy. This is in addition to the farmer loan waiver of US$ 13.86 billion and the
ambitious Bharat Nirman Programme with an outlay of US$ 34.84 billion for
improving rural infrastructure. Additionally, the rural economy has not been
impacted by the global economic slowdown, according to a recent study by the
Rural Marketing Association of India (RMAI). The study found that the rural and
small town economy which accounts for 60 per cent of India’s income has
remained insulated from the economic slowdown. Moreover, rural incomes are
on the rise driven largely due to continuous growth in agriculture for four
consecutive years. According to a McKinsey survey conducted in 2007, the rural
India market would grow almost four times from its existing size in 2007, which
was estimated at US$ 577 billion.

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RURAL INFRASTRUCTURE:
1) 46 percent of villages are connected by all weather roads.

2) 84 percent of villages are electrified.

3) 5700 regulated markets.

In the early 2000s, around 700 million people, i.e. 70% of the Indian
population lived in 6,27,000 villages, in rural areas. Of this, 90% were
concentrated in villages with population less than 2000.3 According to a study

conducted in 2001 by the National Council for Applied Economic Research

(NCAER), there were as many "middle income and above" households in rural
areas as there were in urban areas.

There were almost twice as many "lower income households" in rural areas as in
urban areas. There were 2.3 million "highest income" households in urban areas
as against 1.6 million in rural areas. NCAER projections indicated that the number
of "middle income and above" households was expected to grow to 111 million in
rural India by 2007, compared to 59 million in urban India. Gone were the days
when a rural consumer had to go to a nearby town or city to buy a branded
product. The growing power of the rural consumer was forcing big companies to
flock to rural markets. At the same time, they also threw up major challenges for
marketers.

FMCG
There was a time when the FMCG companies ignores rural market,they took no
any interest to produced or sell products in rural market in India.It was the initial
stage of FMCG companies in India.As per as the time had
passed,the strategy and marketing style of FMCG companies had been changed.

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The rural market is the one of the best opportunity for the FMCG sector in the
India.It is wider and less competitive market for the FMCG.As the income level of
the rural consumers increasing,the demand of FMCG is
increasing continuously.

Top Players in FMCG Sector

1.Hindustan lever limited (HLL)
2.ITC (Indian Tobacco Company)
3.Nestle India
4.GCMMF (AMUL)
5.Dabur India

6.Asian Paints (India)

7.Cadbury India
8.Britannia Industries
9.Procter &Gamble Hygiene &Health Care
10.Marico Industries

Secondary Players
1.Colgate-Palmolive (India)Ltd.
2.Godrej Consumers Product Ltd.
3.Nirma Ltd.
4.Tata Tea Ltd.
5.Parle Agro

Rural consumers spend around 13 per cent of their income, the second highest
after food (35 per cent), on fast moving consumer goods (FMCG), as per a RMAI
study.

The FMCG industry in India was worth around US$ 16.03 billion in August 2008
and the rural market accounted for a robust 57 per cent share of the total FMCG
market in India.

The FMCG sector saw rural markets post 20 per cent growth, ahead of the 17-18
per cent growth from urban India, aided by three years of good monsoon, higher
prices of farm produce and farm-loan waiver.

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Most FMCG companies are now working on increasing their distribution in smaller
towns and focussing on marketing and operations programme for semi-urban and
rural markets.

For instance, Godrej Consumer Products intends to increase revenue from rural
areas from 38 per cent to 55 per cent in the next three years by increasing its
distribution network substantially. The products will reach out to 50,000 villages
in the next couple of years from the present 18,000 villages while the number of
towns covered will double from 3,300 to almost 6,500 in a year.

Retail
The rural retail market is currently estimated at US$ 112 billion, or around 40 per
cent of the US$ 280 billion retail market. Major domestic retailers like AV Birla,
ITC, Godrej, Reliance and many others have already set up farm linkages. Hariyali
Kisan Bazaars (DCM) and Aadhars (Pantaloon-Godrej JV), Choupal Sagars (ITC),
Kisan Sansars (Tata), Reliance Fresh, Project Shakti (Hindustan Unilever) and Naya
Yug Bazaar are established rural retail hubs.

Pharmaceuticals
According to a report by McKinsey, the rural and tier-II pharma market will
account for almost half of the growth till 2015. The tier-II market will grow to 44
per cent by 2015, amounting to US$ 8.8 billion.

This growth will be further augmented with the government increasing the
allocation under National Rural Health Mission (NRHM) by US$ 424.3 million over
interim budget estimate 2009-10 of US$ 2.49 billion.

Elder Pharmaceuticals is increasing its focus on the rural market. The company
that largely makes active pharmaceutical ingredients, plans to increase its sales by
8-9 per cent mainly from rural areas and has allocated US$ 8.26 million to
strengthen the sales force for this segment.

Telecommunication

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A Gartner forecast revealed that Indian cellular services revenue will grow at a
compound annual growth rate (CAGR) of 18.4 per cent to touch US$ 25.6 billion
by 2011, with most of the growth coming from rural markets. Also, a joint
Confederation of Indian Industries (CII) and Ernst & Young report reveals that of
the next 250 million Indian wireless users, approximately 100 million (40 per cent)
are likely to be from rural areas, and by 2012, rural users will account for over 60
per cent of the total telecom subscriber base in India.

In a bid to acquire rural subscribers, most Indian telecom operators have started
investing in infrastructure to roll out their services in these areas. Realising this as
a huge potential, small Indian handset manufacturing companies, including
Micromax, Intex Technologies and Karbonn, have lined up a marketing spent of
around US$ 21.02 million for the financial year 2009-10.

Automobiles

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For the auto industry, semi-urban and rural markets contribute close to 40 per
cent of sales, led by demand for two-wheelers, entry-level cars and tractors.
Significantly, car sales grew 8.3 per cent in June 2009, aided by rising demand in
semi-urban and rural markets. Mahindra & Mahindra is bullish on the rural and
semi-urban markets, with its utility vehicle, Scorpio clocking 60-65 per cent sales

from the rural markets as against 20 per cent earlier. TVS Motor also registered
around 50 per cent of its sales from the rural and semi-urban markets.

Consumer durables
A survey carried out by RMAI has revealed that 59 per cent of durables sales
come from rural markets.

Presently, around 50 per cent of sales in the US$ 5.14 billion consumer electronics
industry come from the urban markets, 30 per cent from tier-II and -III towns and
balance 20 per cent from rural India.

Many leading consumer durable companies are now increasing their presence in
rural India. Recently, LG has set up 45 area offices and 59 rural and remote-area
offices. Moreover, it has outlined plans to invest around US$ 40 million towards
development of entry-level products targeted at rural markets.

Samsung has also rolled out its 'Dream Home' road show which was to visit 48
small towns in 100 days in an effort to increase brand awareness of its products.
Samsung expects that its rural revenues would increase to US$ 287.7 million in
2009 from US$ 164.4 million last year. The company also plans to expand its sales
channel by 25-30 per cent in rural India.

Whirlpool, is eyeing rural markets in India for its next phase of growth. The
company is set to tap markets with a population between 100,000 and 500,000 in
the first phase, and in the next phase, will look at expanding the base in villages
with a population of 50,000.

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Nature of Rural Market

 Large, Diverse and Scattered Market: Rural market 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 a crop failure,
the income of the rural masses is directly affected.
 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 per capital income, societal
backwardness, low savings, etc. But the new tax structure, good monsoon,

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government regulation on pricing has created disposable incomes. Today

the rural customer spends money to get value and is aware of the
happening around him.
 Traditional Outlook: Villages develop slowly and have a traditional
outlook. Change is a continuous process but most 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.
 Rising literacy levels: It is documented that approximately 45% of rural
Indians are literate. Hence awareness has increases and the farmers are
well-informed about the world around them. They are also educating
themselves on the new technology around them and aspiring for a better
lifestyle.
 Diverse socioeconomic background: Due to dispersion of
geographical areas and uneven land fertility, rural people have disparate
socioeconomic background, which ultimately affects the rural market.
 Infrastructure Facilities: The infrastructure facilities like cemented
roads, warehouses, communication system, and financial facilities are
inadequate in rural areas. Hence physical distribution is a challenge to
marketers who have found innovative ways to market their products.

Some Myths:

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1. Myth-1: Rural Market Is a Homogeneous Mass

Reality: It’s a heterogeneous population. Various Tiers are present depending on

the incomes like Big Landlords; Traders, small farmers; Marginal farmers: Labors,
artisans. State wise variations in rural demographics are present viz. Literacy
(Kerala 90%, Bihar 44%) and Population below poverty line (Orissa 48%, Punjab
6%).

2. Myth-2: Disposable Income Is Low

Reality: Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for
rural sector is 27.4 million as compared to the figure of 29.5 million for urban
sector. Rural incomes CAGR was 10.95% compared to 10.74% in urban between
1970-71 and 1993-94.

3. Myth-3: Individuals Decide About Purchases

Reality: Decision making process is collective. Purchase process- influencer,

decider, buyer, one who pays can all be different. So marketers must address
brand message at several levels.Rural youth brings brand knowledge to
Households (HH).

Is rural marketing transactional or developmental in its approach?

It is true, rural markets have become an attractive proposition for commercial

business organizations.

The role of rural marketing as such is more developmental than transactional. It is

more a process of delivering better standard of living and quality of life to the
rural environment taking into consideration the prevailing village milieu.

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Transactional Vs Developmental: For better comprehension of this role

let us distinguish development marketing and transactional marketing. Table
brings out the differences in brief.

Transactional Vs Development Marketing

S.No Aspect Transactional Development

1. Concept Consumer orientation, Society orientation, societal
Marketing concept concept

2. Role Stimulating and Catalytic and

conversional transformation agent
marketing
3. Focus Product-market fit Social change
4. Key task Product innovations Social innovations and
and communications communications
5. Nature of Commercial Socio-cultural, economic
activity
6. Participants Corporate enterprises, Government, voluntary
Sellers agencies, corporate
enterprises, benefactors
7. Offer Products and services Development,
projects/schemes/program
s
8. Target group Buyers Beneficiaries and buyers

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9. Communication Functional Developmental

10. Goal Profits, Customer Market development
satisfaction
Corporate Image
Brand image
11. Time-Frame Short-medium Medium-Long
12. Motivation Profit-motive Service-motive

Business policy Ideological or Public policy

Model: The model of rural marketing represents a combination of the

transactional and developmental approaches.

 Rural marketing process is both a catalyst as well as an outcome of the

general rural development process. Initiation and management of social
and economic change in the rural sector is the core of the rural marketing
process. It becomes in this process both benefactor and beneficiary.
 Innovation is the essence of marketing. Innovative methods of social
change for successful transformation of traditional society are virtual. Such
a change narrows the rural-urban divide.
 The process of transformation can be only evolutionary and not
revolutionary. The growth of the rural market can be a planned

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evolutionary process based on strategic instruments of change rather than

constitute just short-term opportunities for commercial gains.
 The exposure of ruralites to a variety of marketing transactions during the
change process puts them in the role of beneficiaries than of just `buyers'
of modern inputs and infrastructural services.
 Communication is the vital element of rural marketing. It should serve to
resolve social conflicts, encourage cooperation and strengthen competitive
spirit during interactions between rural and urban as well as within rural

areas. Another critical point for communication is the point of conversion

of ruralite from an "induced beneficiary" to an "autonomous buyer".

Classification of rural consumers

The rural consumers are classified into the following groups based on their
economic status:

 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
for marketing firms to depend on. Wheat farmers in Punjab and rice
merchants of Andhra Pradesh fall in this group.
 The Middle Class: This is one of the largest segments for manufactured
goods and is fast expanding. Farmers cultivating sugar cane in UP and
Karnataka fall in this category.

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 The Poor: This constitutes a huge segment. Purchasing power is less, but
strength is more. They receive the grants from government and reap the
benefits of many such schemes and may move towards the middleclass.
The farmers of Bihar and Orissa fall under this category.

Roadblocks of Indian Rural Market

There are several roadblocks that make it difficult to progress in the rural market.
Marketers encounter a number of problems like dealing with physical
distribution, logistics, proper and effective deployment of sales force and effective
marketing communication when they enter rural markets. The major problems
are listed below.

1. Standard of living: The number of people below the poverty line is more
in rural markets. Thus the market is also underdeveloped and marketing
strategies have to be different from those used in urban marketing.
2. Low literacy levels: The low literacy levels in rural areas leads to a
problem of communication. Print media has less utility compared to the
other media of communication.

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3. Low per capita income: Agriculture is the main source of income and
hence spending capacity depends upon the agriculture produce. Demand
may not be stable or regular.
4. Transportation and warehousing: Transportation is one of the biggest
challenges in rural markets. As far as road transportation is concerned,
about 50% of Indian villages are connected by roads. However, the rest of
the rural markets do not even have a proper road linkage which makes
physical distribution a tough task. Many villages are located in hilly terrains
that make it difficult to connect them through roads. Most marketers use

tractors or bullock carts in rural areas to distribute their products.

Warehousing is another major problem in rural areas, as there is hardly any
organized agency to look after the storage issue. The services rendered by
central warehousing corporation and state warehousing corporations are
limited only to urban and suburban areas.
5. Ineffective distribution channels: The distribution chain is not very
well organized and requires a large number of intermediaries, which in turn
increases the cost and creates administrative problems. Due to lack of
proper infrastructure, manufacturers are reluctant to open outlets in these
areas. They are mainly dependent on dealers, who are not easily available
for rural areas. This is a challenge to the marketers.
6. Many languages and diversity in culture: Factors like cultural
congruence, different behaviour and language of the respective areas make
it difficult to handle the customers. Traits among the sales force are
required to match the various requirements of these specific areas.

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7. Lack of communication system: Quick communication is the need of

the hour for smooth conduct of business, but it continues to be a far cry in
rural areas due to lack of communication facilities like telegraph and
telecommunication systems etc. The literacy rate in the rural areas is rather
low and consumer’s behaviour in these areas is traditional, which may be a
problem for effective communication.

8. Spurious brands: Cost is an important factor that determines purchasing

decision in rural areas. A lot of spurious brands or look-alikes are available,
providing a low cost option to the rural customer. Many a time the rural
customer may not be aware of the difference due to illiteracy.
9. Seasonal demand: Demand may be seasonal due to dependency on
agricultural income. Harvest season might see an increase in disposable
income and hence more purchasing power.
10. Dispersed markets: Rural population is highly dispersed and requires a
lot of marketing efforts in terms of distribution and communication.

Attractiveness of rural market

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1. Large Population: The rural population is large and its growth rate is also
high. Despite the rural urban migration, the rural areas continue to be the
place of living majority of Indians.

2. Rising Rural Propensity:

2005-
INCOME GROUP 2000-01 2008-09
06
ABOVE RS. 1.6 3.8 5.6
100,000
R S. 77,001- 2.7 4.7 5.8
100,000
RS. 50,001-77,000 8.3 13.0 22.4
RS. 25,001-50,000 26.0 41.1 44.6

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RS.25,000 & 61.4 37.4 20.2

BELOW

Thus we see that population between income level of Rs. 25,000- 77,000
will increase from 34.3% in 1994-95 to 67.0% in 2006-07. The rural
consuming class is increasing by about 3-4% per annum, which roughly
translates into 1.2 million new consumers yearly.

3. Growth in consumption:

PER CAPITA HOUSEHOLD EXPENDITURE (IN RS.)

LEVEL NO STATES EXPENDITURE

.
Punjab 614
Kerala 604
Haryana 546
High
Rajasthan 452
(Above Rs 7
Gujarat 416
382/-)
Andhra 386
Pradesh
Maharashtra 384

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West Bengal 382

Orissa 381
Average
5 Tamil Naidu 381
(Rs. 382/-)
Uttar Pradesh 373
Karnataka 365
Assam 338
Low
Madhya 326
(Below Rs. 3
Pradesh
382/-)
Bihar 289

Distribution household’s income wise (projection in Rs Crore)

2001 – 02 2006 – 07
INCOME GROUPS RURAL RURAL
TOTAL NO. % TOTAL NO. %
HIGH 0.26 0.07 26. 0.52 0.12 23.
9 1
MIDDLE 12.04 7.73 64. 16.72 10.3 61.
2 2 8
LOW 5.7 5.09 88. 3.68 3.52 95.
7 7
TOTAL 18.04 12.8 71. 20.90 13.9 66.

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9 4 6 7

Spending pattern (Rural Household’s in Rs.)

ITEM % RICH POOR AVERAGE

FOOD ARTICLES 4
147 73 95
4
TOILETRIES 2
67 33 43
0
WASHING MATERIAL 1
43 22 28
3
COSMETICS 1
33 17 21
0
OTC PRODUCTS 4 13 6 9
OTHERS 9 30 15 19
TOTAL 333 166 215

Average rural household spends on consumables excluding food grains,

milk & vegetables are Rs. 215/-.

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4. Life style changes:

Income vs. usage of packed consumer goods (% of household using)

MONTHLY HOUSEHOLD INCOME (RS.)

GOODS UP TO 351 – 751 – 1501

350 750 1500 +
WASHING CAKES/BARS 60 78 86 91
SHAMPOOS 57 72 89 93
TOOTH PASTE/POWDER 22 36 65 85
BATHING SOAPS 20 25 41 63
TEA (PACKAGED) 22 30 48 64

5. Life cycle advantage:

STAGES IN LIFE CYCLE

PRODUCT URBAN MARKET GROWTH RURAL

RATE %
Popular soaps Maturity 2 Growth
Premium Late 11 Early
soaps growth growth
Washing Late 6 Early

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powder growth growth

Skin creams Maturity 1.1 Growth
Tea Maturity 4 Growth

6. Market growth rates higher: Growth rates of the FMCG market and the
durable market are higher in rural areas for many products. The rural market
share will be more than 50% for the products like toilet soaps, body talcum
powder, cooking medium (oil), cooking medium (vanaspati), tea, cigarettes
and hair oil.
7. Rural marketing is not expensive : Conventional wisdom dictates that
since rural consumers are dispersed, reaching them is costly. However, new
research indicates that the selling in Rural India is not expensive. According to
one research it costs roughly Rs.1 Crore to promote a consumer durable
inside a state. This includes the expenses of advertising in vernacular
newspapers, television spots, in-cinema advertising, radio, van operations and
merchandising and point of purchase promotion. Campaign like this, which
can reach millions, costs twice as much in urban area.

8. Remoteness is no longer a problem: Remoteness in a problem but not

insurmountable. The rural distribution is not much developed for the reasons,

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 Lack of proper infrastructure such as all-weather roads, electrification

and sanitation, and
 Lack of marketer’s imagination and initiative.
Marketers have so far, failed in analyzing the rural side and exploiting rural India’s
traditional selling system- Haats & Melas.Their near obsession with just
duplicating the urban-type network and that too with very limited success, has
kept them blind to the potential of these two outlets.

RURAL VS URBAN MARKETING

NO ASPECT URBAN RURAL
.
1 PHILOSOPHY Marketing & Marketing &

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Societal Concepts Societal Concepts,

& Relationship Development
Marketing Marketing &
Relationship
Marketing
2 A) MARKET
B) DEMAND High Low
C) COMPETITION Among Units In Mostly From
Organized Sector Unorganized Units
CONSUMERS
LOCATION Concentrated Widely Spread
LITERACY High Low
INCOME High Low
EXPENDITURE Planned, Even Seasonal, Variation
NEEDS High Level Low Level
INNOVATION/ADOPTIO Faster Slow
N

3 PRODUCT
AWARENESS High Low
CONCEPT Known Less Known
POSITIONING Easy Difficult
USAGE METHOD Easily Grasped Difficult To Grasp
QUALITY PREFERENCE Good Moderate
4 PRICE

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SENSITIVE Yes Very much

LEVEL DESIRED Medium-high Medium-low
5 DISTRIBUTION

Wholesalers, Village shops,

stockists, retailer, “Haats”
supermarket,
CHANNELS
specialty stores, &
authorised
showrooms
TRANSPORT FACILITIES Good Average
PRODUCT AVAILABILITY High Limited
6 PROMOTION
Print, audio visual TV, radio, print
media, outdoors, media to some
ADVERTISING
exhibitions etc. few extent. More
languages languages
Door-to-door, Occasionally
PERSONAL SELLING
frequently
Contests, gifts, Gifts, price
SALES PROMOTION
price discount discounts
PUBLICITY Good opportunities Less opportunities

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Special Products for Rural Markets:

 Rural Transporter: Mahindra & Mahindra is busy developing the prototype

of what it calls a ‘Rural Transporter’ – basically a hybrid between a tractor and
a rural transport vehicle. The product at 20-25 HP will be targeted at those
who cannot afford a normal tractor and would also fulfill the need of family
transporter that could take in the rural roughs but would be much more
comfortable and safer than the conventional tractor-trolley.
 Sampoorna TV: LG Electronics, the Korean firm has rejigged the TV to appeal
to local needs. It spent Rs. 21 Lacs to develop a set that would have on-screen
displays in the vernacular languages of Hindi, Tamil and Bengali. The logic,
rural consumers unfamiliar with English would still be able to use the TV
without being intimidated.
 Titan Watches: A recent NCAER study revealed that there is a great potential
for watches in rural areas. In fact it is considered to be a high priority list. It

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was also found that a rural consumer looks for the ruggedness of the watch
more than the urban consumer does. He prefers thick watches than slim
watches.

The biggest problem that the Marketers are facing in the Rural Markets is Of
IMITATIONS. Imitations may result in two types of goods depending upon the
purpose, commitment, and competence of imitator. A poor imitator will end up in

producing deceptive, spurious, fake, copycat products. He dupes the gullible

customer by offering products having close resemblance with the original. In
quality, it is poor cousin to the original. On the other hand, a poor imitator may
even produce an improved version of the original product.
In this scenario the job of the Marketer becomes even more difficult in the
sense that he has not to fight other competitors but also the imitated products.
The advantages that these products enjoy in the rural markets are that the
Imitators who are in the villages are making these and they are offering More
Margins & Better credit Facilities.
To solve this problem the Marketer has to educate the consumer about his
product and show him the benefits of his products over the imitated ones.

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Need-Product Relationships and the changes happening in Rural India

Needs Old Products New Products

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Brushing Teeth Neem sticks, Charcoal, Toothpaste, tooth

Rocksalt, Husk powder
Washing Vessels Coconut fiber, Earthy Washing Powders,
materials, Brick Powder, soaps and liquids
Ash
Transport Bullock Cart, Horses, Tractors, LCVs,
Donkeys Mopeds, Scooters,
Motor cycles
Irrigation Wells, Canals, Water Bore-wells, Motors,
lifters, Wind Mills Power Generators,
Pump Sets
Hair Wash Shikakai powder, Retha, Shampoos and hair
Besan care soaps

CONSUMER BEHAVIOR IN RURAL MARKETS:

Promotion of brands in rural markets requires the special measures. Due to
the social and backward condition the personal selling efforts have a challenging
role to play in this regard. The word of mouth is an important message carrier in
rural areas. Infect the opinion leaders are the most influencing part of promotion

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strategy of rural promotion efforts. The experience of agricultural input industry

can act as a guideline for the marketing efforts of consumer durable and non-
durable companies. Relevance of Mass Media is also a very important factor.

The Indian established Industries have the advantages, which MNC don't enjoy in
this regard. The strong Indian brands have strong brand equity, consumer
demand-pull and efficient and dedicated dealer network which have been created
over a period of time. The rural market has a grip of strong country shops, which
affect the sale of various products in rural market. The companies are trying to
trigger growth in rural areas. They are identifying the fact that rural people are
now in the better position with disposable income. The low rate finance
availability has also increased the affordability of purchasing the costly products
by the rural people. Marketer should understand the price sensitivity of a
consumer in a rural area. This paper is therefore an attempt to promote the brand
image in the rural market. 

Indian Marketers on rural marketing have two understanding (I) The urban metro
products and marketing products can be implemented in rural markets with some
or no change. (ii) The rural marketing required the separate skills and techniques
from its urban counter part. The Marketers have following facilities to make them
believe in accepting the truth that rural markets are different in so many terms.

(i) The rural market has the opportunity for.

(ii)  Low priced products can be more successful in rural markets because the low
purchasing, purchasing powers in rural markets.

(iii)  Rural consumers have mostly homogeneous group with similar needs,
economic conditions and problems.

(iv) The rural markets can be worked with the different media environment as
opposed to press, film, radio and other urban centric media exposure.

How does reality affects the planning of marketers? Do villagers have same
attitude like urban consumers? The question arises for the management of rural
marketing effects in a significant manner so than companies can enter in the rural
market with the definite goals and targets but not for a short term period but for
longer duration. The Research paper will discuss the role of regard. The strategy,

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which will be presented in the paper, can be either specific or universally

applicable.

The ultimate objective of all production is consumption. A free market

economy provides freedom to the consumers to buy and consume goods of their
choice. The buying preferences of consumers send signals to producers to
produce various commodities in required quantities. Producers, therefore,
produces only those commodities which are desired by the consumers. In India,
consumer behavior has changed in recent years owing to enhanced awareness,
information technology, and, more importantly, governmental intervention
through legislations. India's rural consumers account for about 73 percent of the
total consumers. In recent years, the lifestyle of a large number of rural
consumers in India has changed dramatically and continues to do so. The buying
behavior of the rural consumers is influenced by several factors, such as socio-
economic conditions, cultural environment, literacy level, occupation,
geographical location, efforts on the part of sellers, exposure to the media, etc.
This book examines the buying behavior of India's rural masses and the diverse
factors which influence their choices. The work is useful for understanding the
Indian rural consumer psyche in order to formulate an appropriate marketing
strategy. It includes:

1) Media
2) Newspaper brand
3) Sources of information.

RURAL CONSUMER PREFERENCES:

In order to assess the buyer behavior towards certain critical aspects of
marketing, the preferences of the consumers is directly related to:
1) Price
2) Quality
3) Credit
4) Variety
5) Dealer advice
6) Specific brand.

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PURCHASE BEHAVIOR:
Rural people can buy only from three places includes:
1) From the shop in the same village
2) Weekly bazaar
3) From the shop of nearby town.

Factors influencing buying behavior

The various factors that affect buying behavior of in rural India are:

1. Environmental of the consumer - The environment or the

surroundings, within which the consumer lives, has a very strong
influence on the buyer behavior, egs. Electrification, water supply
affects demand for durables.
2. Geographic influences - The geographic location in which the rural
consumer is located also speaks about the thought process of the

consumer. For instance, villages in South India accept technology

quicker than in other parts of India. Thus, HMT sells more winding
watches in the north while they sell more quartz watches down south.

3. Family – it is an important buying decision making organization in

consumer markets. Family size & the roles played by family members
exercise considerable influence on the purchase decisions. Industry
observers are increasingly realizing that at times, purchase of durable

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has less to do with income, but has more to do with the size of the
family & that’s where rural India with joint family structures, becomes
an attractive proposition.
4. Economic factors – The quantum of income & the earning stream are
one of the major deciding factors, which determine to a great extent,
what the customer will be able to buy. Many people in the rural market
are below poverty line & for large number of people, agriculture is the
primary occupation. More than 70% of the people are in small-scale
agricultural operation. These factors affect the purchase decision.
5. Place of purchase - (60% prefer HAATS due to better quality, variety
& price) Companies need to assess the influence of retailers on both
consumers at village shops and at haats.
6. Creative use of product - ex Godrej hair dye being used as a paint to
colour horns of oxen, Washing machine being used for churning lassi.

The study of product end provides indicators to the company on the

need for education and also for new product ideas.

7. Brand preference and loyalty - (80% of sale is branded items in 16

product categories)

Cultural factors influencing consumer behavior

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Cultural factors exert the broadest and deepest influence on consumer behaviour.
The marketer needs to understand the role played by the buyer’s culture. Culture
is the most basic element that shapes a person’s wants and behaviour. In India,
there are so many different cultures, which only goes on to make the marketer’s
job tougher. Some of the few cultural factors that influence buyer behaviour are:

1. Product (colour, size, design, and shape): There are many examples that
support this point.
a. For example, the Tata Sumo, which was launched in rural India in a
white colour, was not well accepted. But however, when the same
Sumo was re-launched as Spacio (a different name) and in a bright
yellow colour, with a larger seating capacity and ability to transport
good, the acceptance was higher.

b. Another good example would be Philips audio systems. Urban India

looks at technology with the viewpoint of ‘the smaller the better’.
However, in rural India, the viewpoint is totally opposite. That is the
main reason for the large acceptance of big audio systems. Thus
Philips makes audio systems, which are big in size and get accepted
in rural India by their sheer size.
2. Social practices: There are so many different cultures, and each culture
exhibits different social practices.

For example, in a few villages they have common bath areas.

Villagers used to buy one Lifebuoy cake and cut it into smaller bars.

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This helped lifebuoy to introduce smaller 75-gram soap bars, which

could be used individually.

3. Decision-making by male head: The male in Indian culture has always

been given the designation of key decision maker.

For example, the Mukhiya’s opinion (Head of the village), in most

cases, is shared with the rest of the village. Even in a house the male
head is the final decision maker. In rural areas, this trend is very
prominent.

4. Changes in saving and investment patterns: From gold, land, to

tractors, VCR’s, LCV’s

4 A’s approach of Indian Rural Market

The rural market may be appealing but it is not without its problems: Low per
capita disposable incomes that is half the urban disposable income; large number
of daily wage earners, acute dependence on the vagaries of the monsoon;
seasonal consumption linked to harvests and festivals and special occasions; poor
roads; power problems; and inaccessibility to conventional advertising media.

However, the rural consumer is not unlike his urban counterpart in many ways.

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The more daring MNC’s are meeting the consequent challenges of availability,
affordability, acceptability and awareness (the so-called 4 A’s)

» Availability

The first challenge is to ensure availability of the product or service. India's

627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in
rural areas, finding them is not easy. However, given the poor state of roads, it is
an even greater challenge to regularly reach products to the far-flung villages. Any
serious marketer must strive to reach at least 13,113 villages with a population of

more than 5,000. Marketers must trade off the distribution cost with incremental
market saturation. Over the years, India's largest MNC, Hindustan Lever, a
subsidiary of Unilever, has built a strong distribution system which helps its
brands reach the interiors of the rural market.

To service remote village, stockiest use autorickshaws, bullock-carts and even

boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a
future growth driver, has evolved a hub and spoke distribution model to reach the
villages. To ensure full loads, the company depot supplies, twice a week, large
distributors which who act as hubs. These distributors appoint and supply, once a
week, smaller distributors in adjoining areas. LG Electronics defines all cities and
towns other than the seven metros cities as rural and semi-urban market. To tap
these unexplored country markets, LG has set up 45 area offices and 59
rural/remote area offices.

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» Affordability

The second challenge is to ensure affordability of the product or service. With low
disposable incomes, products need to be affordable to the rural consumer, most
of who are on daily wages. Some companies have addressed the affordability
problem by introducing small unit packs. Most of the shampoos are available in
smaller packs. Fair and lovely was launched in a smaller pack. Colgate toothpaste
launched its smaller packs to cater to the travelling segment and the rural

consumers.Godrej recently introduced three brands of Cinthol, Fair Glow and

Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh,
Bihar and Uttar Pradesh — the so-called `Bimaru' States.

Hindustan Lever, among the first MNC’s to realize the potential of India's rural
market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2
for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has
addressed the affordability issue by introducing the returnable 200-ml glass bottle
priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now
come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered
soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-
serve sachet of 25 gm priced at Rs 2 and multi serve sachet of 200 gm priced at Rs
15.

» Acceptability

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The third challenge is to gain acceptability for the product or service. Therefore,
there is a need to offer products that suit the rural market. One company which
has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a
customized TV for the rural market and christened it Sampoorna. It was a runway
hit selling 100,000 sets in the very first year. Because of the lack of electricity and
refrigerators in the rural areas, Coca-Cola provides low-cost ice boxes — a tin box
for new outlets and thermocol box for seasonal outlets.

The insurance companies that have tailor-made products for the rural market
have performed well. HDFC Standard LIFE topped private insurers by selling
policies worth Rs 3.5 crores in total premium. The company tied up with non-
governmental organizations and offered reasonably-priced policies in the nature
of group insurance covers. With large parts of rural India inaccessible to
conventional advertising media — only 41 per cent rural households have access
to TV — building awareness is another challenge. Fortunately, however, the rural
consumer has the same likes as the urban consumer — movies and music — and
for both the urban and rural consumer, the family is the key unit of identity.
However, the rural consumer expressions differ from his urban counterpart.
Outing for the former is confined to local fairs and festivals and TV viewing is
confined to the state-owned Doordarshan. Consumption of branded products is
treated as a special treat or luxury.

» Awareness

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Brand awareness is another challenge. Fortunately, however, the rural consumer

has the same likes as the urban consumer — movies and music — and for both
the urban and rural consumer, the family is the key unit of identity. However, the
rural consumer expressions differ from his urban counterpart. Outing for the
former is confined to local fairs and festivals and TV viewing is confined to the
state-owned Doordarshan. Consumption of branded products is treated as a
special treat or indulgence.

Hindustan Lever relies heavily on its own company-organized media. These are
promotional events organized by stockiest. Godrej Consumer Products, which is
trying to push its soap brands into the interior areas, uses radio to reach the local
people in their language.

Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of
rural households. It doubled it’s spend on advertising on Doordarshan, which
alone reached 41 per cent of rural households. It has also used banners, posters
and tapped all the local forms of entertainment. Since price is a key issue in the
rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per
bottle in all media. LG Electronics uses vans and road shows to reach rural
customers. The company uses local language advertising. Philips India uses wall
writing and radio advertising to drive its growth in rural areas.

The key dilemma for MNC’s ready to tap the large and fast-growing rural market
is whether they can do so without hurting the company's profit margins.

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Evolving a New Marketing Mix for Selling to Rural Indians

The marketing mix in the case of Indian rural markets consists of 4P’s i.e.
Product, Price, Promotion, Place combined with 1 P that is Packaging and one R
i.e. Retailer as special focus areas. However, at the base of this marketing mix will
be 2 E’s of Education and Empowerment.

CUSTOMIZATIONN

EDUCATION EMPOWEREMENT

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The traditional marketing hypothesis tends to ignore the requirement of a

developing country’s rural needs. The concept of marketing has to be taken in
conjunction with economic, psychological and social implications. Hence, the
concept of Mega-Marketing where all such factors are taken into consideration
while developing the Marketing Mix is more relevant to succeed and build
enduring brands. In rural India’s case the two most important considerations are
Education and Empowerment opportunities which traditional approaches of
marketing fail to acknowledge. Then only the opportunity provided by the rural
market can be fully tapped.

12.2% of the world lives in Rural India. Put in a different context, this works out to
1 in 8 people on Earth. Being able to successfully tap this growing market is every
marketer’s dream. However, myths abound. India’s rural markets are often
misunderstood. A clear distinction needs to be made with regard to the reality
versus the image of rural India. If such a distinction is not made, we will be unable
to distinguish between the serpent and the rope and the rope and the serpent.

The rural market is not homogeneous. Though the aggregate size is very large,
individual subsets of this market tend to be rather small and disparate.
Geographical, demographical, statistical, logistical differences are very apparent.
Positioning and realities regarding the potential of each of these market segments
differ and lie at the very core of forming the strategy for the rural markets.

The face of Indian agriculture is changing from dry land and irrigated agriculture
into high-tech and low-tech agriculture. Farmers in states like Maharashtra and
Andhra Pradesh have reaped the benefits of adopting new age farming practices,
including green house cultivation, fert-irrigation and hydroponics. This has
radically changed the economics of farming, with the investment in these systems
lowering the cost of cultivation, increasing yields due to integrated crop
management practices and reducing the dependence on rainfall. As a result,

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disposable income has grown sharply. The aspirants are becoming climbers
showing a sustained economic upturn as purchasing power is increasing in the
rural markets. The proportion of very rich has increased five- fold. The growing
incomes have modified demand patterns and buyer behaviour. Moreover, the

need for a product or service is now adequately backed up with the capacity,
ability and willingness to pay.

However, the market still remains largely unexploited. At most times, potential
markets need to be found and at times, even created. Such creation of demand
needs efficient management of the supply chain. To increase market share,
behavioural change needs to be at the forefront of any strategy. Further, due to
the diversity of this market, marketers need to think, plan and act locally.

It is therefore essential to develop an accurate Marketing Mix for selling to

rural Indians.

Product

“Authentic marketing is the art of identifying and understanding customer

needs and creating solutions that deliver satisfaction to the customers, profits
to the producers and benefits for the stakeholders.” ................... Philip Kotler

The product offerings have to be not only customized but also at a different plane
altogether in case of rural markets. The various product levels as outlined by
Philips Kotler, namely Core Benefit, Basic Product, Expected product, augmented
product and Potential Product should be adequately taken into consideration and
the product offerings should be henceforth customized according to the needs.
The Rural market is not a homogenous set of customers with preferences
frozen in time. When developing products in any category, marketers must

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identify the typical rural specific needs. Urban products cannot be dumped onto
rural markets without modifications. Tailor-made products are better received by

the rural audience as the consumers feel empowered and tend to dentify with the
offering.

Most of the times in the urban market the product is offered at the augmented
product level where the objective of the product offering is to exceed the
customer expectation. But in the rural markets of India which have been till date
characterized by the absence of the choice, sub-standard products and cheap
clones of their urban counterparts; the immediate level to be operated is the
Expected product where his expectations are met. Also, due to the low level of
incomes and literacy levels, it is imperative that the basic needs of the consumer
are met.

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For instance, shampoos or soaps with distinctive, strong rose or jasmine perfumes
are very popular with the rural women in South India. The urban women do not
identify as strongly with these perfumes. Sachetization is also a distinctly rural-
driven phenomenon. As demand in several categories is being created, intensity
of use is quite low. On average, rural folk would use a shampoo only once a week.
Habits take time to change and making unit sachet packs affordable is the key to
inducing trial and purchase.

Systematic, in-depth research that can help understand the depths of the mind of
the villagers, their buying criteria, purchase patterns and purchasing power are an
essential input while developing rural specific products or services.

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A common error has been to launch a completely stripped down version of the
urban product in the rural market, with the objective of offering the lowest
possible price. This is not what a rural consumer wants. What is required is to
introduce a product with ‘essential’ features, whose needs are recognized and for
which the consumer is willing to pay (value-adding features). Product developers
should aim at eliminating all the cost-adding features, i.e., features which a
consumer is unwilling to pay for as he sees no obvious utility. This would
“redefine value” in the minds of the consumer and tremendously increase
product acceptability.

Product development is severely constrained by legislation in the case of

agricultural inputs like fertilizers, insecticides and pesticides. In the case of
fertilizers for instance, though levels of deficiency of nutrients have increased
significantly over the past decade, no significant changes in formulations notified
under the Fertilizer Control Order have taken place. This has severely restricted
the availability of cost effective specialty fertilizers of global standards to Indian
farmers. Technological know-how for manufacture of such fertilizers exists within
the country. However, farmers using modern farming practices are unable to get
an assured supply of such farm inputs due to draconian legislation. A move to
liberalize the sector could perhaps consider the accepted worldwide norm of
allowing manufacturers with a strong R&D base to decide their own formulations
with the government machinery conducting checks on market samples of finished
products to ensure that they live up to the labelled specifications. This would be a

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major policy initiative that would give a huge impetus to innovative product
development in the farm sector.

Product life cycles as are becoming shorter and these are having their impact on
company life cycles. Thus for any company wishing to develop its product
portfolio, allegiance to the classic American P-A-L Principle of Partnership -
Alliances - Linkages is a basis for survival.

Pricing

A significant portion of the rural population is paid in daily wages. Daily wage
earners tend to have little stock of money, and therefore tend to make purchases
only to meet their daily needs. The implication is that pack sizes and price points
are critical to sales, and importantly, that rural consumers view the purchase-
tradeoff dilemma across a much wider range of product categories. As a result,
the nature of competition is much greater; a beverage manufacturer is not only
competing with other manufacturers in its category, but also other products that
consumers may consider one-off luxury purchases such as shampoo. So marketer
will have to examine method by which he can make the product more affordable.
In the case of consumer durable one way is to work through rural bank and offer
higher purchase terms to consumer. In short, the Value for money is the most
important concept that will differentiate the successful brand from the rest.

STATUS SEEKING CONSUMERS BUDGET CONSCIOUS CONSUMER

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ETBUDLOGYIM Rural marketing

Every marketer must realize that the rural consumer is not a miser. He is not
simply looking for the cheapest product in every category. He understands and
demands value for money in every purchase that he makes. Pricing therefore is a
direct function of factors including cost-benefit advantage and opportunity cost.
Pricing offered to consumers should be for value offerings that are affordable.
Price sensitivity is extremely high and comparison with competitive prices is
common. Consumers seem to create narrow psychological price bands in their

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minds for product groups and price elasticity beyond the extreme price points is
very high. The perceived utility or value of the product or service is the ultimate
decision making factor.

It is certain however, that buying cheap is not the primary objective. Rather, it is
“buying smart”. A study revealed that the average rural consumer takes
approximately 2 years to decide on buying a watch! He will not do so unless he is
totally convinced that he is getting value for Money. Impulse buys and purchases
for conspicuous consumption are also extremely few and far Between considering
the “value for money” factor that reigns supreme in most rural purchase
decisions.

It must be remembered that the rural consumer does not have a budget problem.
He has a cash flow problem. This is because the village folk receive funds only
twice a year. At these times, he is capable of making high volume purchases. At all
times, however, the unit price is critical and so is the pack size. Because of this, in
the lean season when there is a cash flow crunch, marketers need to provide
financial products, schemes or solutions that suit the needs of the rural
population.

Promotions & Advertising

There are a lot of barriers that militate against homogenous media and message
delivery. These barriers stem from the fact that rural markets vary immensely in

terms of tastes, habits and preferences leading to different expectations of every

segment of the population.

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However, one fact is certain across all areas. The rural consumer likes to touch
and feel a product before making a choice. Demonstrations are undoubtedly the
most effective promotional tool that shapes purchase decisions of the rural
population. Demonstrations establish the credentials of any new technology used
in developing the product.

In today’s information era, it is very important for companies to wise-up on

emerging technologies. It has in fact become a medium to attract larger audiences
for a product demonstration. Technology must be used to prepare a database of
customers and their requirements. The use of video using mobile vans and even
large screen video walls at events should be arranged.

The classic conundrums of reach and coverage of the media are shattered. Several
creative communication media have been used by various companies to tackle
the problem of having to use visual communication and non-verbal
communication to reach the rural audience. This is required because a large
proportion of the rural population cannot read or write. Alliances with cottage
industries, dharmsalas, panchayats, post offices and police stations for advertising
have also helped immensely. More importantly, in rural India, experience has
proved time and time again that word of mouth is the key influencer.

Intermediaries are the foundation to rural distribution. If the intermediary

understands and is constantly reminded about your product, then the end user
will not be allowed to forget. The companies must reinforce this highly effective

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medium and use all their innovation and money tom develop more dramatic
point of sale and point of contact material. This becomes all the more important
when in rural India, more often than not, the overlap between the product
categories sold in a single outlet in tremendous. For instance, a store may call
itself as a grocery store but will stock everything from groceries to vegetables to
fertilizers and may at times even stock medicines. In such cases, the point at
which the customer actually comes in contact with a product may not be the
point at which the sale is affected.

The re-use capacity and colour of the container in which the product is packed is
also a crucial factor. In fact, reusable packaging is considered a major aid in
promoting sales for products in the rural market. Consumer and Trade schemes
that Incentivise Spending using discount coupons, off season discounts, free
samples, etc. encourage spending. Lucky draws and gift schemes are a major hit in
most states.

The use of local idioms and colloquial expressions are an excellent way to strike a
rapport with the rural consumer and must be borne in mind when developing
media plans and public relations programmes. No high voltage publicity is
required. The rural consumer is very down to earth but equally discerning and

marketers need to step into the shoes of the rural folk while creating product
promotion campaigns. Another unique feature of rural markets is that the
Decision making process is collective. The persons involved in the purchase
process - influencer, decider, buyer, one who pays can all be different. So
marketers must address brand messages in their campaigns at several levels.

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Apart from regular household goods, several agribusiness companies have also
started providing gift schemes with offers for free jewellery that influences the
ladies to pressure the farmers to purchase agricultural inputs from select
companies. This promotion strategy thus makes women influence purchase
decisions that they would ordinarily not be involved in.

Youth power is becoming increasingly evident in villages. Rural youth bring brand
knowledge to the households. This has forced several companies to change the
focus and positioning of their products and services towards this segment that is
growing in absolute number and relative influence.

There are other attributes in the promotion strategy which are explained as
under:

1. Mass media: In the present world mass media is a powerful medium of

communication. The following are the mass media generally used:

 Television.

 Cinema.

 Radio

 Print media: Handbills and Booklets, posters, stickers, banners, etc.

2.  Personal selling and opinion leaders: In personal selling it is required that

the potential users are identified and awareness is created among them about the

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product, its features, uses and benefits. This can be achieved only by personal
selling by highly motivated sales person. In fact the word of mouth information
holds lot validity in rural areas even today. This is the reason why opinion leaders
and word of mouth are thriving among rural consumers. An opinion leader in
rural areas can be defined as a person who is considered to be knowledgeable
and is consulted by others and his advice is normally followed. The opinion
leaders may be big landlords or politicians or progressive farmers.

3. Special campaigns: During crop harvest and marketing seasons it is

beneficial to take up special promotion campaigns in rural areas. Tractor owners
(tonee) conducted by MRF Limited is one such example. Brooks Bond carries out
marches in rural areas with band, music and caparisoned elephants to promote
their brand of tea.  

Mandi and Mela magic

At last count, India witnessed over 50,000 melas. Of these 25,000 meals are held
to signify religious, cultural festivals as well as local fairs and events. On an
average, visitors at these melas spend between Rs. 5,000 to Rs. 50,000 a day. For

example, 3 lakh people visited the annual mela at Navchadi which lasts for 7 days
in Meerut. The largest such mela is the Maha Kumbh Mela which is visited by an
average of 12 crore people.

There is however, a caveat when an organization is considering using mela for

marketing their products. Is the audience at this mela fit for promotion of the

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product at hand? What are the psychographics of this audience? What is the
motivational and behavioural impetus that brings visitors to each of these melas.
On considering these questions, it has been observed that melas are fit to
generate product exposure, package familiarity, brand reminder and word of
mouth. However, for products that need concept marketing and those that have
high prices, such melas are not suitable promotion media. This is because the
time and the mood of the people that visit these melas are not right to digest
technical information or for making large purchases. People come to melas to
have a good time and are not reminded of such high technology or high priced
products when they return home. In the words of Mr. Neville Gomes, Managing
Director of Multimedia Aquarius, promotion at melas is like a “one night stand”.
There will be no reminder later. Thus, a large amount of qualitative judgment is
indeed in planning promotions at melas by media planners.

Place

place is the major reason behind the evolution of rural marketing as a distinct
discipline. A village as a place for promotion, distribution & consumption is very

different from a town or city, thus the general marketing theories can’t be applied
directly in rural markets. Reaching the right place is the toughest part in today’s
rural marketing, as most of the products reach up to the nearest townships of any
village, but due to higher distribution costs, these products fails to reach the
village as the distribution channel fails to put in the required efforts. Most of the
times, the rural retailers themselves go to the urban areas to procure these

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goods. Rural markets imply complex logistical challenges that show up as high
distribution costs.

Significance of Distribution

No matter how well devised a company’s product, pricing or promotion strategy,

the most crucial link in ensuring the success of rural marketing efforts is
distribution. Distribution must be strengthened and this would raise investment
cost barriers for new entrants. In Rural India, the selection and use of distribution
channels is a nightmare. The reason for this is very clear when we consider that
on an average, Urban and Rural India both have approximately 3 million retail
outlets. However, Urban India has only 4,000 towns where these outlets are
located. On the other hand, Rural India’s 3 million outlets are located in 6.3 lakh
villages. Thus, marketers are faced with the problem of feeding 3 million shops
located in vastly diverse areas each of which records an average sale of only
Rs.5,000 per outlet. Further compounding this problem is the fact that even this

meagre sale is mostly on credit. The diversity in the distribution of shops is the
self-limiting factor in terms of servicing the rural distribution network.

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The distribution of outlets however shows that a marketer need not be present in
all markets at all times. Being present in 6 lakh villages is virtually impossible for
an organization of any size. Rural wealth and demand is concentrated typically at
satellite towns, district headquarters, assembly markets and such central

locations. Rural distribution has a rigid hierarchy of markets that make channel
decisions relatively structured.

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It is essential for rural marketing companies to understand this hierarchy. Rural

folk are habituated to travelling once a week for their weekly purchases to a
satellite town. They do not expect such items to be present in every village. For
durables where the outlay involved is typically large, the purchase would be made
in an assembly market for reasons of choice and availability of adequate cash
flow. This is due to the fact that it is at assembly markets that auction yards are
present where the farmers congregate to sell their output. After such sale of
produce, they are cash rich and can afford to make such purchases. It is therefore
not necessary for a marketer of TV sets to take their distribution channel all the
way down to the village shop. A TV will not be sold there as the cash flow does

not exist at that point in the hierarchy of markets. A television distributor must be
present at assembly markets which are much smaller in number, more
controllable, easier to reach and service. Keeping the hierarchy in mind will help
decide the optimum level of penetration required to reach a critical mass of rural
consumers.

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Haats

Haats are the nerve centre of Rural India. They are a readymade distribution
network embedded in the fabric of rural society for over 1000 years. They have
been held on a regular basis across the length and breadth of the country for over
1000 years. Right from the time of Chandragupta Maurya, Haats are seen as a
place for social, cultural and economic interchange.

One in every five villages with a population of over 2000 has a haat. In villages
with less than 2000 people this figure reduces to 1 in 20 villages. Typically, an
average haat will have close to 300 stalls. A haat usually serves around 5000
visitors. Considering that the average population of an Indian village is
approximately 1000, each haat serves 5 villages. A study estimates that 47,000
haats are conducted in rural India. These rural super markets are much larger
than all the world's K-marts and Wal-marts put together. A lot of re-distribution
also occurs through haats. This is because, a large number of retailers and sub-
wholesalers buy from haats for their village stores. What is most attractive to
marketers is that 90% + of sales in haats are on cash basis. Traditionally, in village

shops a lot of credit sales occur due to the fact that in a small geographic area of a
village, everybody knows everybody. Considering that over 5000 visit a haat from
5 villages, the system gets derelationalised. Apart from the 90% cash sale, 5 to 7%
is conducted on barter system and the rest 3 to 5% is on credit. Also attractive to
companies wishing to use the system is the low selling overheads. Participation

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fees at haats are a flat Re.1 to Rs.5 per stall and this rate is common to a giant like
Hindustan Lever and the smallest local seller.

Distribution costs must be reduced through optimum utilization of the network.

Thus, incorporating haats in the distribution strategy of a rural marketing
organization selling consumer goods and FMCG products (typically once a week
purchase items) is a tremendous opportunity.

Perhaps the other most important factor to consider while developing rural
distribution strategy is that the move from transactional marketing to relationship
marketing is most evident in the village market. A strong bond needs to be
created with every consumer even in the remotest village and the smallest town.
Marketing in Rural India is undoubtedly a long-haul exercise and one that involves
great expense. Only those with a strong mind, a tough heart and stiff hands
survive.

There is also a need to realise that the dealer is the company's "unpaid" sales
force. It is essential to educate and involve him as he is the local company
representative and is the only member in the channel of distribution that is in

direct contact with the final consumer. The dealers' feedback needs to be
obtained as the direction for future strategy emanates here.

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MARKETING STRATEGIES TO CAPTURE RURAL INDIA

 SEGMENTATION OF RURAL MARKET

The first step is to develop & implement any strategy for the rural market should
include the appropriate segmentation of the rural market. The important thing is
that appropriate segmentation basis need to be applied. Different product
categories have different rural markets to cater to & these can be selected by

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applying different criteria of segmentation. The organization can do the following

thing to start with:
 Focus on select markets.
 Focus on select villages.

 BY COMMUNICATING AND CHANGING QUALITY PERCEPTION

Companies are coming up with new technology and they are properly
communicating it to the customer. There is a trade of between Quality a
customer perceives and a company wants to communicate. Thus, this positioning
of technology is very crucial. The perception of the Indian about the desired
product is changing. Now they know the difference between the products and the
utilities derived out of it. As a rural Indian customer always wanted value for
money with the changed perception, one can notice difference in current market
scenario.

 BY PROPER COMMUNICATION IN INDIAN LANGUAGE

The companies have realized the importance of proper communication in local
language for promoting their products. They have started selling the concept of
quality with proper communication. Their main focus is to change the Indian
customer outlook about quality. With their promotion, rural customer started
asking for value for money.

 BY TARGET CHANGING PERCEPTION

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If one go to villages they will see that villagers using Toothpaste, even when they
can use Neem or Babool sticks or Gudakhu, villagers are using soaps like Nima
rose, Breeze, Cinthol etc. even when they can use locally manufactured very low
priced soaps. Villagers are constantly looking forward for new branded products.
What can one infer from these incidents, is the paradigm changing and customer
no longer price sensitive? Indian customer was never price sensitive, but they
want value for money. They are ready to pay premium for the product if the
product is offering some extra utility for the premium.

 BY UNDERSTANDING CULTURAL AND SOCIAL VALUES

Companies have recognized that social and cultural values have a very strong hold
on the people. Cultural values play major role in deciding what to buy. Moreover,
rural people are emotional and sensitive. Thus, to promote their brands, they are
exploiting social and cultural values.

 BY PROVIDING WHAT CUSTOMER WANT

The customers want value for money. They do not see any value in frills
associated with the products. They aim for the basic functionality. However, if the
seller provides frills free of cost they are happy with that. They are happy with
such a high technology that can fulfil their need. As "Motorola" has launched,
seven models of Cellular Phones of high technology but none took off. On the
other hand, "Nokia" has launched a simple product, which has captured the
market.

 BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS

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Companies are picking up Indian models, actors for advertisements as this helps
them to show themselves as an Indian company. Diana Hyden and Shahrukh Khan
are chosen as a brand ambassador for MNC quartz clock maker "OMEGA" even
though when they have models like Cindy Crawford.

 BY ASSOCIATING THEMSELVES WITH INDIA

MNCs are associating themselves with India by talking about India, by explicitly
saying that they are Indian. M-TV during Independence Day and Republic daytime
make their logo with Indian tri-colour. Nokia has designed a new cellular phone
5110, with the India tri-colour and a ringing tone of "Sare Jahan se achcha".

 BY PROMOTING INDIAN SPORTS TEAM

Companies are promoting Indian sports teams so that they can associate
themselves with India. With this, they influence Indian mindset. LG has launched a
campaign "LG ki Dua, all the best". ITC is promoting Indian cricket team for years;
during world cup they have launched a campaign "Jeeta hai jitega apna Hindustan
India India India". Similarly, Whirlpool has also launched a campaign during world
cup.

 BY TALKING ABOUT A NORMAL INDIAN

Companies are now talking about normal India. It is a normal tendency of an
Indian to try to associate him/her with the product. If he/she can visualize

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himself/herself with the product, he /she become loyal to it. That is why
companies like Daewoo based their advertisements on a normal Indian family.

 BY DEVELOPING RURAL-SPECIFIC PRODUCTS

Many companies are developing rural-specific products. Keeping into
consideration the requirements, a firm develops these products. Electrolux is
working on a made-for India fridge designed to serve basic purposes: chill drinking
water, keep cooked food fresh, and to withstand long power cuts.

 BY GIVING INDIAN WORDS FOR BRANDS

Companies use Indian words for brands. Like LG has used India brand name
"Sampoorna" for its newly launched TV. The word is a part of the Bengali, Hindi,
Marathi and Tamil tongue. In the past one year, LG has sold one lakh 20-inch
Sampoorna TVs, all in towns with a population of around 10,000.

 BY ACQUIRING INDIAN BRANDS

As Indian brands are operating in India for a long time and they enjoy a good
reputation in India. MNCs have found that it is much easier for them to operate in
India if they acquire an Established Indian Brand. Electrolux has acquired two
Indian brands Kelvinator and Allwyn this has gave them the well-established
distribution channel. As well as trust of people, as people believe these brands.
Similarly Coke has acquired Thumps up, Gold Spot, Citra and Limca so that they

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can kill these brands, but later on they realized that to survive in the market and
to compete with their competitor they have to rejuvenate these brands.

 BY EFFECTIVE MEDIA COMMUNICATION

Media Rural marketing is being used by companies. They can either go for the
traditional media or the modern media. The traditional media include melas,
puppetry, folk theatre etc. while the modern media includes TV, radio, and e-
chaupal. LIC uses puppets to educate rural masses about its insurance policies.
Govt of India uses puppetry in its campaigns to press ahead social issues. Brook

Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in
Etawah district. In between such a show, the lights are switched of and a torch is
flashed in the dark (EVEREADYs tact).

 BY ADOPTING LOCALISED WAY OF DISTRIBUTING

Proper distribution channels are recognized by companies. The distribution
channel could be big scale Super markets; they thought that a similar system can
be grown in India. However, they were wrong; soon they realized that to succeed
in India they have to reach the nook and the corner of the country. They have to
reach the "local Paan wala, Local Baniya" only they can succeed. MNC shoe giants,
Adidas, Reebok, and Nike started with exclusive stores but soon they realized that
they do not enjoy much Brand Equity in India, and to capture the market share in
India they have to go the local market shoe sellers. They have to reach to local
cities with low priced products.

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 BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES

MNCs have realized that in India celebrities enjoyed a great popularity so they
now associate themselves with Indian celebrities. Recently Luxor Writing
Instruments Ltd. a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of
Parker Sonnet Hussain special edition fountain pens, priced at Rs. 5000. This pen
is signed by Mr. Makbul Fida Hussain a renowned painter who has created
"Gajgamini" range of paintings. Companies are promoting players like Bhaichung

Bhutia, who is promoted by Reebok, so that they can associate their name with
players like him and get popularity.

 MELAS
Melas are places where villagers gather once in a while for shopping. Companies
take advantage of such events to market their products. Dabur uses these events
to sell products like JANAM GHUTI (Gripe water). NCAER estimates that around
half of items sold in these melas are FMCG products and consumer durables.
Escorts also display its products like tractors and motorcycles in such melas.

 PAINTINGS
A picture is worth thousand words. The message is simple and clean. Rural people
like the sight of bright colors. COKE, PEPSI and TATA traders advertise their
products through paintings.

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Product Strategies

The specific strategies, which can be employed to develop or modify the products
to targets the rural market, can be classified as follows:

1.  Small unit packing: Given the low per capita income & purchasing habits of
the rural consumers, small unit packages stand a good chance of acceptance in
rural market. Single serve packets or sachets are enormously popular in India.
They allow consumers to buy only what they need, experiment with new
products, & conserve cash at the same time. This method has been tested by
products life shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth
paste, etc. Small packing stands a good chance of acceptance in rural markets.
The advantage is that the price is low and the rural consumer can easily afford it.
Also the Red Label Rs. 3.00 pack has more sales as compared to the large pack.
This is because it is very affordable for the lower income group with the deepest
market reach making easy access to the end user satisfying him. The small unit
packing will definitely attract a large number of rural consumers.

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2.  New product designs: Keeping in view the rural life style the manufacturer
and the marketing men can think in terms of new product designs. The rural
product usage environment is tough because of rough handling, rough roads &
frequent power fluctuations. Thus, all these environmental factors must be
considered while developing the products meant for rural audience.

Nokia’s 1100 model is a very good example of a customized model for rural
markets. Its design has been modified to protect it against rough usage in rural
environment; it is dust resistant & has a small torch light in view of the frequent
power cuts in rural India. It is also introduces messaging in Hindi language now, in
some of the economically priced models in order to cater to the semi-urban or
rural consumers. This is in real terms, thinking global & acting local.

3.  Sturdy products: Sturdiness of a product is an important factor for rural

consumers. The product should be sturdy enough to stand rough handling,
transportation & storage. The experience of torch light dry battery cell
manufacturers supports this because the rural consumers preferred dry battery
cells which are heavier than the lighter ones. For them, heavier weight meant that
it has more over and durability. Sturdiness of a product either or appearance is an
important for the rural consumers. 

4.  Utility oriented products: The rural consumers are more concerned with
utility of the product and its appearance Philips India Ltd. Developed and
introduced a low cost medium wave receiver named BAHADUR during the early
seventies. Initially the sales were good but declined subsequently. On

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investigation it was found that the rural consumer bought radios not only for
information and news but also for entertainment. 

5. Brand name: For identification, the rural consumers do give their own brand
name on the name of an item. The fertilizers companies normally use a logo on
the fertilizer bags though fertilizers have to be sold only on generic names. A
brand name or a logo is very important for a rural consumer for it can be easily
remembered. Many a time’s rural consumers ask for peeli tikki in case of
conventional and detergent washing soap.

Nirma made a peeli tikki especially for those peeli tikki users who might have
experienced better cleanliness with the yellow colored bar as compared to the
blue one although the actual difference is only of the color. e.g.: Coca-Cola
targeted the whole Indian rural market with the positioning of “Thanda Matlab
Coca-Cola” advertisements because most of the villagers say when wanting a
drink refer to it as Thanda…… so Coca-cola used that word.

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Pricing strategies

1. Low cost/ cheap products: This follows from the product strategy. The
price can be kept low by low unit packaging’s like paisa pack of tea, shampoo
sachets, vicks 5 grams tin, etc. this is a common strategy widely adopted by many
manufacturing and marketing concerns. 

2. Refill packs / Reusable packaging: In urban areas most of the health drinks
are available. The containers can be put to multipurpose uses. Such measures can
a significant impact in the rural market. 

For example, the rural people can efficiently reuse the plastic bottle of hair oil.
Similarly the packages of edible oil, tea, coffee, ghee etc can be reused. Pet jars
free with the Hasmukhrai and Co Tea, Ariel Super Compact. 

3. Application of value engineering: in food industry, Soya protein is being

used instead of milk protein. Milk protein is expensive while Soya protein is
cheaper, but the nutrition content of both is the same. The basic aim is to reduce
the value of the product, so that a larger segment can afford it, thus, expanding
the market.

4. Large volume-low margins (Rapid or slow penetration strategy):

Marketers have to focus on generating large volumes & not big profit margins on

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individual products. If they price their product at a level which can lead to good
volumes, then they can still generate good returns on the capital employed.

5. Overall efficiency & passing on benefits to consumers : For rural

products, the strategy should be to cut down the production, distribution &
advertising costs & passing on these benefits to the customers to further increase
the turnover. Most often, it has been observed that advertising has less to do with
product sales in the rural areas. If an organization gets the price point right, then
it can work in rural market.

6. Low volume-low price strategy : This strategy of reducing prices by

reducing the package size in order to make it appear more affordable, is
delivering very good results for a large number of FMCG product categories, in
the rural markets of India. In categories where maintaining the price point is
extremely critical, this strategy is delivering very good results.

7. Ensuring price compliance: Rural retailers, most of the times, charges more
than the MRP. The manufacture has to ensure price compliance either through
promotional campaigns, as was done by Coca Cola, or by ensuring the availability
of products at the retail outlets directly.

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Promotion strategies

Customized promotional media & messages need to be developed by the

organizations to effectively target the rural market. The following strategies can
be considered while developing promotional campaigns for the rural markets:

1. Think Global Act Local

Rural population is diverse, but the commonalities of their ethos & simple
living habits need to be understood for advertising to succeed. For that, the
theme of the advertisement needs to revolve among universal themes,
such as family-love. But the context, storyline, language & idioms should be
such that the rural audience of different rural market segments can relate
to.

2. Think in Local Idiom

This is the need of the advertising professionals who can think like the rural
people. The only we can have insights like ‘Thanda matlab Coca Cola’.
There should be the use of language writers who understands the rural &
regional pulse better.

3. Simplicity & Clarity

All promotional messages targeted at rural audience need to be simple &
clear, which can be easily understood, & they should not include any
confusing elements. It is preferable that it has only a few propositions at a

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time. Bombarding rural consumers with too much, in less time can easily
confuse them & leave them bewildered. Promotional message should
highlight only the functional values of the product & explains how those
values can make the consumer’s life even better & solve any of his
problems.

4. Narrative Story Style

The promotional message can be delivered in the form of an entertaining
story with a message depicting how the brand delivers “larger good” to the
family & society. The theme of the story line can be about how the product
can solve the problems of the rural consumers.

5. Choice of Brand Ambassador

Brand Ambassador for the rural markets need to be picked carefully as
urban successes might not get replicated in the rural markets. That is why
Govinda in the Mirinda as boosted the sales of the drink in the rural
markets. An organization might spend a lot of money in hiring a brand
ambassador only to find out later that it had little impact on the rural
consumer.

Distribution Strategy
Many companies view the rural markets as great opportunity for expanding their
sales but find distribution as a major problem. Unfortunately, it is almost
impossible to transplant strategies which work successfully in urban markets onto

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rural markets, namely, extensive retailing and sustained pull generation through
mass media advertising.

The road blocks to reach the rural customers are:

 Lack of adequate transport facilities.

 Large distances between villages.
 Lack of pucca roads connecting villages to nearest townships.
 Lack of proper retail outlets
 Lack of mass media infrastructure.

The marketers were of the opinion that the villagers would come to nearby towns
and buy the products that they want. What has been found is that if we have to
serve the rural consumer we will have to take our products to him through the
channels that he is using and some innovative ways of getting to him.

The following distribution strategies formulated for the rural category. 

1.  Coverage of villages with 2000 and above population: Ideally,

coverage of villages with up to 2000 and above population could be the break-
even point for a distribution setup. By doing so the percentage of villages covered
comes to only 10% of all the villages, but the rural population covered will be

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substantial, to the extent of about 40 to 45 percent. With a distribution network

in about 55,000 villages, which have a population of 2000 persons & above each,
one can cover about 25 crores rural consumers. This strategy is good to begin
with & then subsequently, villages with lesser populations can be added.

2. Segmentation: the number of villages in India is huge & it is not viable to

contact & serve all villages directly. Therefore, companies or distributors can
carefully examine the market potential of different villages & target the villages
that can be served in a financially viable manner through an organized
distribution effort.

3.  Use of co-operative societies: There are over 3 lacks co-operative

societies operating in rural areas for different purposes like marketing
cooperatives, farmer’s service cooperatives and other multipurpose cooperatives.
These cooperatives have an arrangement for centralized procurement and
distribution through their respective state level federation. Such state level
federation can be motivated to procure and distribute consumables items and

low value durable items to the members to the society for serving to the rural
consumers. Many of the societies extend credit to the members for purchases. 

4.  Utilization of public distributory system: The PDS in the country is fairly

well organized. The revamped PDS places more emphasis on reaching remote
rural areas like the hills and tribal’s. The purpose of PDS is to make available
essential commodities like food grains, sugar, kerosene, edible oils and others to

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the consumers at a reasonable price. The shops that distribute these commodities
are called fair price shops. These shops are run by the state civil Supplies
Corporation, co-operatives as well as private entrepreneurs. Here again there is
an arrangement for centralized procurement and distribution. The manufacturing
and marketing men should explore effective utilization of PDS.

5.  Utilization of multipurpose distribution centers by petroleum/oil

companies: In order to cater to the rural areas the petroleum/oil companies

have evolved a concept of multipurpose distribution centers in rural areas. In
addition to petrol/diesel, lubricants, these outlets also stock consumables
agricultural inputs like fertilizers, pesticides and seeds. It is estimated that there
are about 450 such outlets in operation in the country. The rural consumer who
has tractors, oil-engine pump sets and mopeds frequent these outlets for their
requirement. These outlets can be profitably utilized for selling consumables and
durable items also. 

6. Distribution up to feeder markets/mandi towns: Keeping in view the

hierarchy of markets for the rural consumers, the feeder markets and mandi
towns offer excellent scope for distribution. The rural customers visit these towns
at regular intervals not only for selling the agricultural produce but also for
purchasing cloth, jewelry, hardware, radios, torch cells and other durables and
consumer products. From the feeder markets and mandi towns the stockiest or
wholesaler can arrange for distribution to the village shops in the interior places.

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This distribution can be done by mopeds, cycles, bullock-carts, camelbacks etc.

depending upon the township.  

7. Shandies/Haaths/Jathras/Melas: These are places where the rural

consumers congregate as a rule. While shandies/heaths are held a particular day
every week, Jathras and melas are held once or twice a year for longer durations.
They are normally timed with religious festivals. Such places attract large number
of itinerant merchants. Only temporary shops come up selling goods of all kinds.
It can be beneficial for companies to organize sales of their product at such
places. Promotion can be taken, as there will be ready captive audience. For
convincing the manufacturing and marketing man with regard to the importance
of these places from rural marketing point of view a visit to such places is
necessary. It is estimated that over 5,000 fairs are held in the country and the
estimated attendance is about 100 million rural consumers. Biggest fair ‘Pushkar
Mela’ is estimated to attract over 10 million people. There are 50 such big rural
fairs held in various parts of country, which attract urbanite also like
‘Mankanavillaku’ in Malappara in Kerela, Kumbh Mela at Hardwar in U.P. ‘Periya
Kirthigai’ at Tiruparunkunaram in Tamil Nadu. 

Merits:

 Convenience: The entire market can be related to large departmental

stores in cities, where the advantage is a one-stop shopping exercise. These
outlets crop up every week, providing consumers immense choice and
prices.

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 Attractive: The weekend shopping is not only convenient but also

entertaining. The markets start early and will be over by lunch. Afterwards,
there will be entertainment. In respect of transactions, it is an attractive
place to those who want to buy second hand durables and to those who
prefer barter transactions. Further the freshness of the produce, buying in
bulk for, a week and the bargaining advantage attract the frugal and
weeklong hard working rural folk.
 Availability: It is a market for everyone and for everything. Household
goods, clothes, durables, jewellery, cattle, machinery, farming equipment,
raw materials and a host of products are available.

8. Agricultural Input Dealers: Fertilizers should be made available to the

farmers within the range of 4-5 km from their residence, as per the essential
commodities act. This is why there are about 2 lakh fertilizer dealers in the
country, both in cooperative & private sector. Example of Varana Nagar in

Maharashtra proved an eye opener in this regard where the sugar and milk co-
operatives have totally changed the life style of people. The supermarket in
Varana Nagar caters exclusively to rural consumers. Similarly a co-operative
supermarket called ‘Chintamani’ in Coimbatore (T.N) arranges free transit of rural
consumers to the supermarket of their purchases. 

9. Joint distribution by Non-competing Companies: As the cost of

distributing the products in the rural market through distribution vans can be
unviable for a single company, different non-competing companies can come

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together to jointly operate distribution vans for the rural market. This will enable
them to share the cost of operating the van & on account of the sharing of the
cost by four or five companies; the entire operation can become financially viable
for all the players.

10. Personal Selling Network: It is very successful distribution channel being

developed by companies like HUL. It adds a personal touch to the marketing, as
the salesmen are the resident of the village or community itself, making it easier
to sell the product & maximise sales for the company.

THE OLD SETUP

The historically available people & places for distribution include: - Whole seller,
Retailer, Vans, Weekly Haats, and Bazaars & Shadies.

1. Wholesalers
The Indian wholesaler is principally a Galla – Kirana (food-grain) merchant who
sustains the belief that business is speculative rather than distributive in
character.

He is a trader / commodity merchant rather than a distributor and therefore

tends to support a brand during boom and withdraw support during slump.

The reason for this speculative character and dormant role of wholesalers are:-

 Indian market was largely sellers market. There was no need for active
sales growth.
 Companies laid more emphasis or retailers in urban areas, who are very
large in number. As a result of retail based distribution was weakened.

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 Rural markets were neglected by many. The occurrence of retail outlets

was low. Therefore many companies were dependent on whole salers.
The current need is to activate and develop wholesaler of the adjoining
market as a distributor of products to rural retail outlets and build his
loyalties to the company.

2. Retailers
There are different kinds of retailers.

 Shops within the village

 Shops located on the main road and not exactly within the village
 Kasba market or the tahsil market.

Village retailers have traditionally been among the most mobile of rural
residents.

I. CREDIBILITY: -
 He enjoys the confidence of the villagers.
 His views are accepted and followed by the rural people whose
awareness and media exposure levels are low.

(- The urban retailer is not trusted.

- He is seen as a businessman with profit motto.

- His view points are evaluated with other sources of information.)
II. INFLUENCE LEADER: -

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 His role as influence leader is indisputable. From tender twig of

neem to washing powder retailer testimony has been vital part of
the product adoption process.
 The role of urban retailer is weak.
 The urban consumers have numerous sources of information.
 Although retailer’s opinion is sought it may not be 100% believed
and followed.
III. BRAND PROMOTER: -
 In rural market retailers remains the deciding factor to sell
particular brand.
 Retailers helps in identification and selection of brands, there is
less influence of shelf displays and point of purchase promotion.
 Presence of spurious brands is an ample testimony to this view.

(- The urban retailer has a limited role as a brand promoter.

- He cannot directly, recommend the brands.

- He is to intelligently drive home his recommendations, as

urban consumers do not trust him completely.

- It is through shelf displays and incentive offers that he has to push

the
brands.)

IV. RELATIONSHIP MARKETER

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 Village retailer practices relationship marketing.

 He caters to a set of buyers who have income from immovable
land resources and would be static over a much longer time span.
 The relationship could extend beyond three generations, backed
by historical credibility of the retailer as a product referral.
(- on the contrary, the urban retailers have to make an effort to
adopt relationship marketing.

- His customers base comprises largely the mobile service class

prone to shift residence at least once, if not more, in less than a
decade. This limits the time span and perspective of the retailer –
customer relationship.)

V. HARBINGER OF CHANGE
 In an environment relatively isolated from external
developments, he has been harbinger of change.
 He is one of the main sources of information and opinion as well
as supplier of product and services.
(As against this, we find urban retailer, wielding limited influence in
changing the product choices and quality of life of consumers.)

3. Vans

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Mobile vans long since, have an important place in distribution and

promotion of the products in villages.

4. Weekly Haats, Bazaars, Shandies

The haats are the oldest outlets to purchase household goods and for trade.
These markets are very well organized with shopkeepers having pre-assigned
spaces for them to sell their wares. A typical market is in an open field with
ample space for displaying all sorts of goods. Its location changes every week.
These markets have different names in different regions. But they are

strikingly similar in what they sell. It is reported that there are, in all, about
47,000 haats held throughout the country.

Media Vehicles

Through 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?

Mass Media Local Media Personalized Media

Radio Haats, Melas, Fairs Direct Communication
Cinema Wall Paintings Dealers
Press Hoardings Sales Persons
TV Leaflets Researchers

Video Vans

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Folk Media

Animal Parade

Transit Media

Formal media
It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor
advertisement. Reach of formal media is low in rural households (Print: 18%, TV:
27%, Cinema: 30%, and Radio: 37%) and therefore the marketer has to consider
the following points:

 Newspapers and magazines:

English newspapers and magazines have negligible circulation in rural areas.
However local language newspapers and magazines are becoming popular
among educated facilities in rural areas. Examples: Newspapers: Eenadu in
A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North, Loksatta in

Maharashtra and Tamil magazine Kumudam are very popular in rural areas.

 Television:

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It has made a great impact and large audience has been exposed to this
medium. HLL has been using TV to communicate with the rural masses.
Lifebuoy, Lux, Nihar oil etc are some of the products advertised via television.
Regional TV channels have become very popular especially in Southern states.
Examples: SUN TV is very popular even in rural areas in Tamil Nadu and

Asianet is a preferred regional channel in Kerala. Many consumer goods

companies and fertilizer companies are using these TV channels to reach the
rural customer.

 Radio:
Radio reaches large population in rural areas at a relatively low cost. Example:
Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies using
radio communication programme. There are specific programmes for farmers like
Farm and Home/Krishi Darshan in regional languages. The farmers have a habit of
listening to regional news/agricultural news in the morning and the late evening.
The advertisement has to be released during this time to get maximum coverage
in rural areas. Another advantage is that the radio commercial can be prepared at
short notice to meet the changing needs of the rural folk. Example: Release of a
pesticide ad at the time of outbreak of a pest or disease in crops.

 Cinema:
About 65% of the earnings from cinema are from rural markets. Film viewing
habits is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh.
Village theatres do roaring business during festivals by having four shows per

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day. The monthly charge for showing an ad film is within Rs.500. Local
distributor or dealer who has good contacts with cinema houses in villages can
easily monitor this activity. Examples: Films on products like Vicks, Lifebuoy
and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides
can also be screened in village theatres.

 Outdoor advertisements:
This form of media, which includes signboards, wall painting, hoarding, tree
boards, bus boards, dealer boards, product display boards etc, is cost effective
in rural areas. Symbols, pictures and colours should be used in POPs meant for
rural markets so that they can easily identify the products. Generally rural
people prefer bright colours and the marketer should Utilize such cues.

 Point of purchase:
Display of hangings, festoons and product packs in the shops will catch the
attention of prospective buyers. However a clutter of such POP materials of
competing companies will not have the desired effect and is to be avoided.

 Direct mail advertising:

It 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 get very few letters and he is receptive to such
mailers.

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 Wall paintings:
It 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 cost of
painting one square foot area is just Rs.10. Retailers welcome painting of their

shops so that the shop will look better. Walls of farm houses, shops and schools
are ideal places for painting and the company need not have to pay any rent for
the same. The walls have to be painted at least one or two feet from ground level.
It is better to take permission of the owner. Very often the owner takes
responsibility for taking care of the wall painting. Painting to be avoided during
election time and rainy season. The matter should be in the form of pictures,
slogans for catching the attention of people. Companies marketing TV, fans,
branded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as
promotion medium in rural areas.

 Tree boards:
These are painted boards of about two square feet in dimension having the
picture or name or slogan of the product painted on it. The cost of such a painted
board is about Rs.80. These boards are fixed to the trees on both sides of the

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village road at a height of about 10 feet from ground level. These boards attract
the attention of slow moving vehicles like cycles, bullock carts and tractors and
people walking on the road. Considering the poor condition of roads, even the

buses move at slow speed through village road. Fertilizer and pesticide companies
in rural areas extensively use tree boards. These are low priced promotion items
and can be used by consumer goods companies too.

Informal/Rural specific media

These media with effective reach and personalized communication will help in
realizing the promotional objectives. Companies to suit the specific
requirements of rural communication are using a variety of such media
effectively and some of the more important media and methods are given
below.

 Farm-to-Farm/House-to-House visit:
Rural people prefer face-to-face communication and farm visits facilitate two-
way communication. The advantage is that the sales person can understand
the needs and wants of the rural customer by directly discussing with him and
answer his queries on products and services. Potential customers in the village
are identified and the company’s/distributor’s representative makes farm-to-
farm visits and highlight the benefits of the products. The person carries with
him literature in local language and also samples of products. The person does
not sell the product but only promotes the use of the product. Very often the

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local dealer also joins the representative in making farm-to-farm visits. The
dealer clarifies the terms and conditions of sale and also makes independent

follow up visits for securing orders. Example: This approach has been found to
be very effective for agricultural machinery, animal health products and
agricultural inputs. Many LIC agents and companies dealing with high value
consumer durables have tried this method with success in rich rural areas.

 Group meeting:
Group meetings of rural customers as well as prospects are an important part of
interpersonal media. The company is able to pass on the message regarding
benefits of the products to a large number of customers through such meetings.
Group meeting of key customers are conducted by banks, agricultural inputs and
machinery companies in rural areas. The bankers visit an identified village, get the
village people in a common place and explain the various schemes to the villagers.
Such meetings could be organized in prosperous villages for promoting consumer
durables and two wheelers also. Example: MRF Tyres conduct tractor owners
meet in villages to discuss repairs and maintenance of tractors.

 Opinion leaders:
Villagers place more emphasis on the experience of others who have used a
product/brand to make purchase decision. Opinion leader is a person who is
considered to be knowledgeable and is consulted by others and his advice is
normally followed. Such opinion leaders could be big landlords, bank official,
panchayath-president, teachers, extension workers etc. Examples: a) Mahindra
Tractors use bankers as opinion leaders for their product. b) Asian Paints

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promoted its Utsav brand of paint by painting the village Sarpanch’s house
a few months prior to the launch if the branch to demonstrate that the paint does
not peel off.

 The Melas:
Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs
and may be held only for a day or may extend over a week. Many companies have
come out with creative ideas for participating in such melas. Examples: a)
Britannia promotes Tiger Brand Biscuits through melas. b) The mahakumbh at
Allahabad is the biggest mela in India. HLL has put up 14 stalls in the mela grounds
for promoting Lifebuoy. Handcarts have been deployed for increasing access.

 The Haats:
Traditionally on certain days of week, both the sellers and buyers meet in the
village to buy and sell goods and services. These are the haats that are being 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 villages get their wages. For the marketer, the haat can be an ideal
platform for advertising and selling of goods. 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.

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 Folk dances:
These are well-appreciated form of entertainment available to the village
people. The folk dance “Kuravan Kurathi” is popular in Tamil Nadu. The troupe
consists of dancers, drummers and musicians and they move in a well-
decorated van from one village to another village singing and dancing. In a day
the troupe covers about 8-10 villages. As soon as the van reaches a village, film
songs are played to attract the attention of the villages. This is followed by folk
dances. Mike announcement is made about the company’s products and
leaflets are distributed. After the dance programme, queries, if any, about the
products are answered by the sales person. Folk dance programme costs
about Rs.5000 per day and therefore these programmes are conducted during
the peak season in selected villages. Examples: Fertilizer and pesticide
companies organize folk dance programmes during peak season in selected
markets. Thumps Up has sponsored Lavnis, the folk dance programme of
Maharashtra and over 30 programmes have been arranged in selected rural
markets.

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 Audio Visual Publicity Vans (AVP Vans):

AV unit is one of the effective tools for rural communication. The van is a mobile
promotion station having facilities for screening films slides and mike publicity.
The sales person makes a brief talk about situation in the village, the products and
the benefits. The ad film is screened along with some popular film shots and this
continues for about 30 minutes. At the end of the film show, he distributes
handbills and answers queries of the customers. The whole operation takes about
1-2 hours depending upon the products under promotion, number of participants
in the meeting and time taken for question and answers. The vans move to the
next village for the second show. The cost of running a fully equipped AVP unit is
about Rs.4000 per day and AVP van operation has to be considered as an
investment for business development in rural areas. Example: Companies such as
HLL, Colgate, and Phillips have made effective use of AVP vans for popularizing
their products in rural areas.

 Product display contests:

Package is an integral part of the product. Its main purpose is to protect the
product during transit, to preserve the quality and to avoid any loss in quality and
quantity. The main purpose of this contest is to remind the customer to buy the
product as soon as he enters the shop. Another objective is to influence the
dealer to stock the product and support the company in increasing the sales. The
display contest has to be announced well in advance and promotional materials
to be distributed to all the selected dealers in a geographical area. Prizes for best

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displays are announced to motivate the dealers; the contest lasts for about a
month. A well-planned product display contest not only increases the
involvement of dealers in the company’s products but also increases the sales
during the contest period. This is used for promoting consumer goods such as
shampoos, soaps and toothpaste.

 Field demonstration:
This is based on the extension principle “seeing is believing” and is one of the
most effective methods to show the superiority of the company’s products to the
customers. A progressive farmer who is an opinion leader is selected and the
demonstration is conducted in his field in the presence of a group of farmers in
the village. The farmers observe the results in the field and the local dealer calls
on them in their farms and persuades them to buy the particular brand of
pesticide or fertilizer. Examples: a) Spraying a particular brand of an insecticide
against insect pests and showing the farmer how effectively the insects are
controlled. b) Demonstrating the use of tractor/implements for different
agricultural operations. c) Hawkins pressure cooker has demonstration
representatives who carry out demos in rural households. The representative
receives 1% commission for every customer who approaches the dealer via
demonstrations. e) Similarly effectiveness of detergents, pressure cookers,
vaccum cleaners and mosquito coils could be promoted by demonstrations in
selected markets.

 Field days:

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These are extension of field demonstrations. One of the main objectives of

following modern agricultural practices is to increase the yield. The company
organizes demonstrations in a piece of land belonging to progressive farmers. All
the fertilizers, pesticides, nutrients etc. are applied after making field
observations. Just before harvest, all the important farmers are invited to see
demonstration plot and see for themselves how the yields are better in the plot
compared to other fields. Field demonstrations/field days consume lot of time
and efforts and therefore have to be planned well.

 Information centers:
They provide latest information on cultivation of crops, fertilizer application,
weed, management and control of pests and diseases. Experienced agricultural
graduates who make frequent visits to the field and advice farmers on modern
agricultural practices manage the centers. They also provide information on farm
implements, seeds, fertilizers, pesticides, diesel engines, sprayers and tractors etc.
Many consumer goods companies have opened show rooms in prosperous rural
areas. Example: Hero Honda has opened extension counters with show room
facilities in major rural markets.

 Life-style marketing:
Each rural market segment has certain special features i.e. they share common
life-style traits. They include village sports, religious events, prominent

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personalities and role models. Examples: Textile mills maintaining community

gardens, Mineral water companies supplying clean drinking water during summer
festivals in villages and Consumer goods companies sponsoring Kabaddi.

Choosing media vehicles

The choice of different media vehicles for any market is based on an analysis of
the standard features like: reach, frequency, cost & availability. Depending on the
factor of reach & frequency, the different media can be classified into the
following categories. This categorization can help the marketer to make a decision
about which type of media would be more suitable to the product & the
organization.

(a) High reach High frequency

 Jeep based advertising
 Wall painting
 Bus stand & bus panels
 Haats
 Hoardings
 Postal branding
(b) Low reach High frequency
 Co-operative notice board
 Shop front painting
 Tin plating – house
 Dealer boards

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 Village boards
 Well tiles
 Calendars/labels

(c) High reach Low frequency

 Van based advertising
 Melas
 Direct to home
 Folklore group
 Exhibitions/created events
(d) Low reach Low frequency
 Tin painting – tree/shops
 Leaflets
 Posters & banners
 Streamers
 Danglers

FINDINGS AND ANALYSIS

1. Which soap u prefer to use?

The reaction of people towards various SOAP brands

can be tabulated in the following manner:

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BRANDS LUX DETTOL LIFEBUOY OTHERS

PERCENTAG 36 18 22 24
E

In the survey, it could easily be concluded that LUX, the product of HUL was highly
in demand. LUX, the product of HUL covers 36%of the market share. After LUX,
the other brands (EXCEPT LUX, DETTOL, LIFEBUOY) covers 24%of the market
share. This is then followed by LIFEBUOY, the product of HUL with a market share
of 22%,which is then followed by DETTOL, the product of RECKITT BENCKISER with
a market share of 18%.

This data can be graphically explained with the help of the following bar graph:

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40

35

30

25

20
LUX
LIFEBUOY
15
DETTOL
10 OTHERS

0
BRANDS

2. Which pack u prefer to use?

In order to determine the income pattern of the consumers, it was

necessary for the researcher to distribute the consumers on the basis of their
demand for the various packs of SOAP brands available in the market. However,
the reaction of people towards various packs of SOAP can be tabulated in the
following manner:

PACK OF SOAPS SINGLE PACK FAMILY PACK ( 3 IN 1)

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PERCENTAGE 56 44

In the survey, I tried to differentiate amongst people with below average

household income, average household income &above household income. This
classification can be done on the basis of the daily expenditure that people
make.56% consumers demand single pack.44% consumers demand family packs
i.e.3 in 1 pack.

This data can be graphically explained with the help of the following bar graph:

60

50

40

30 SINGLE PACK
Column1

20

10

0
PACKS PREFERRED BY CUSTOMERS

3. Which tea u prefer to use?

The reaction of people towards various TEA brands can be tabulated

in the following manner:

BRANDS TATA TEA BROOKE TAJ MAHAL OTHERS

BOND
PERCENTAG 32 28 18 22

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In the survey, it could easily be concluded that TATA TEA, the product of TATA has
a market share of 32%.This is followed by, BROOKE BOND, with a market share of
28%.Followed by other brands (EXCEPT TATA TEA,BROOKE BOND,TAJ
MAHAL)with a market share of 22%.This is finally followed by TAJ MAHAL, the
product of HUL which holds18%of the market share.

This data can be graphically explained with the help of the following bar graph:

35

30

25

20 TATA TEA
BROOKE BOND
TAJ MAHAL
15
OTHERS

10

0
BRANDS

4. Which tea pack u prefer to use?

In order to determine the income pattern of the consumers, it was

necessary for the researcher to distribute the consumers on the basis of their
demand for the various packs of TEA brands available in the market. However, the
reaction of people towards various TEA packs can be tabulated in the following
manner:

TEA PACKS SACHET MEDIUM PACK LARGE PACKS

PERCENTAGE 48 32 20

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In the survey, I tried to differentiate amongst the people, with below

average household income, average household income & above household
income. This classification can be done on the basis of the daily expenditure that
people make. However, it can be concluded that sachets are most commonly
used by the people .i.e. 48%consumers demand sachet packs. 32%consumers
demand medium pack. 20%consumers demand large pack.
This data can be graphically explained with the help of the following diagram:

50

45

40

35

30
SACHET
25 MEDIUM PACK
20 LARGE PACK

15

10

0
PACKS PREFERRED BY CUSTOMERS

5. Which tooth paste u prefer to use?

In the initial years, the rural consumers preferred tooth powders, datoons etc.
But from the last decade, the preference of consumers towards toothpaste has
been changed. A huge number of toothpastes of
different companies are sold in rural market.
However, the reaction of people towards various TOOTH PASTES can
be tabulated as follows:

BRANDS PEPSODENT COLGATE CLOSE UP OTHERS

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PERCENTAG 27 35 22 16
E

In the survey that the researcher conducted, it could easily be seen that COLGATE,
the product of COLGATE PALMOLIVE is the market leader, which covers 35%of the
total market. After that, PEPSODENT, the product of HUL is demanded by the
customers, which covers 27%of the market share. Followed by CLOSE – UP, the
product of HUL is demanded by the customers, which covers 22%of the market
share. Which is then followed by others brands (EXCEPT PEPSODENT, COLGATE,
CLOSE -UP), which covers 16%of the total market share.

This data can be graphically explained with the help of the following bar graph:
35

30

25

20 PEPSODENT
COLGATE
15 CLOSE UP
OTHERS

10

0
BRANDS

6. Which coffee u prefer to use?

The reaction of people towards various COFFEE brands can be tabulated

in the following manner:

BRANDS BRU NESTLE NESCAFE OTHERS

PERCENTAG 26 32 32 10
E

In the survey, it can be easily concluded that all the brands are facing tough

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competition. NESTLE, the product of NESTLE S.A.& NESCAFE, another product of

NESTLE S.A., shares equal market share of 32%each.This means that they are in a
very tough competition. This is followed by BRU, the product of HUL which holds,
26%of the market share. While the other brands hold only 10%of the market
share.

This data can be graphically explained with the help of the following bar graph:

35

30

25

20 BRU
NESTLE
NESCAFE
15
OTHERS

10

0
BRANDS

7. Which cream u prefer to use?

The reaction of people towards various CREAM brands can

be tabulated in the following manner:

BRANDS PONDS FAIR & AYUR OTHERS

LOVELY
PERCENTAG 28 32 14 26
E

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In the survey, that I conducted, it can easily be concluded that FAIR &LOVELY, the
product of HUL, holds the major market with a share of 32%.This is followed by,
POND ’s, another product of HUL, which holds 28%of the market share. This is
followed by, other brands (EXCEPT, PONDS, FAIR &LOVELY &AYUR), which
captures 26%of the market share. This is followed by AYUR, the brand of AYUR
ACADEMY OF NATURAL BEAUTY (AANB) which holds 14%of the total market
share.

This data can be graphically explained with the help of the following bar graph:

35

30

25

20 PONDS
FAIR & LOVELY
AYUR
15
OTHERS

10

0
BRANDS

8. which hair oil u prefer to use?

The reaction of people towards various HAIR OIL brands can

be tabulated in the following manner:

BRANDS PARACHUTE DABUR DABUR OTHERS

AMLA VATIKA
PERCENTAG 37 29 19 15
E

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In the survey, it can easily be concluded that PARACHUTE, the product of MERICO
captures 37%of the total market share. This is followed by DABUR AMLA, the
product of DABUR which captures 29%of the total market share. This is followed
by DABUR VATIKA, another product of DABUR which captures 19%of the market.
And after that, followed by other brands (EXCEPT PARACHUTE, DABUR AMLA,
DABUR VATIKA) captures 15% of the market share.

This data can be graphically explained with the help of the following bar graph:

40

35

30

25
PARACHUTE
20 DABUR AMLA
DABUR VATIKA
15 OTHERS

10

0
BRANDS

9. Which biscuits u prefer to use?

The reaction of people towards various BISCUITS brands can be

tabulated in the following manner:

BRANDS MARIE GOOD DAY PARLE G OTHERS

GOLD
PERCENTAG 24 21 38 17
E

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In the survey, it can easily be concluded that PARLE-G, the product of PARLE ,
holds a major market share of 38%.This is followed by MARIE GOLD, a product of
BRITANNIA which holds 24%of the market share. After that, GOOD DAY, another
product of BRITANNIA, holds 21%of the market share. This is followed by other
brands (EXCEPT MARIE GOLD, GOOD DAY, PARLE-G) which hold a market share of
17%.

This data can be graphically explained with the help of the following bar graph:

40

35

30

25
MARIE GOLD
20 GOOD DAY
PARLE-G
15 OTHERS

10

0
BRANDS

10.Which detergent u prefer to use?

The reaction of people towards various DETERGENT

brands can be tabulated in the following manner:

BRANDS SURF RIN TIDE OTHERS

PERCENTAG 27 35 22 16
E

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In the survey, it could be easily concluded that RIN, the product of HUL
captures 35%of the total market share. This is followed by SURF, the product of
HUL which has a market share of 27%.This is followed by TIDE, the product of
PROCTER & GAMBLE which has a market share of 27%.This is finally followed by
other brands (EXCEPT SURF,RIN,TIDE)which captures 16%of the market share.

This data can be graphically explained with the help of the following bar graph:

35

30

25

20 SURF
RIN
TIDE
15
OTHERS

10

0
BRANDS

11.Which shampoo u prefer to use?

The reaction of people towards various SHAMPOO brands can be tabulated

in the following manner:

BRANDS CLINIC PLUS SUNSILK HEAD & OTHERS

SHOULDERS
PERCENTAG 33 25 28 14
E

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In the survey, it can easily be concluded that CLINIC PLUS, the product of
HUL, captures the major portion of the market with a market share of 33%.This is
followed by HEAD & SHOULDERS, the product of PROCTER &GAMBLE which holds
28%of the market share. This is followed by SUNSILK, the product of HUL which
holds 25%of the market share. Finally followed by other brands (EXCEPT CLINIC
PLUS, SUNSILK, HEAD & SHOULDERS) with a market share of 14%.

This data can be graphically explained with the help of the following bar graph:

35

30

25

20 CLINIC PLUS
SUNSILK
15 HEAD & SHOULDERS
OTHERS

10

0
BRANDS

12.Which pack u prefer to use?

In order to determine the income pattern of the consumers, it was

necessary for the researcher to distribute the consumers on the basis of their
demand for the various packs of SHAMPOO brands available in the
market.
However,the reaction of people towards various SHAMPOO packs can be
tabulated in the following manner:

SHAMPOO SACHET SMALL MEDIUM FAMILY

PACKS PACK PACK PACK
PERCENTAG 23 32 28 17

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In the survey, I tried to differentiate amongst the people, with below

average household income, average household income & above household
income. This classification can be done on the basis of the daily expenditure that
people make. However, 32%consumers demand SMALL PACK. 28% consumers
demand medium pack.17% consumers demand large packs.

This data can be graphically explained with the help of the following bar graph:

35

30

25

20 SACHET
SMALL PACK
15 MEDIUM PACK
FAMILY PACK

10

0
PACKS PREFERRED BY CUSTOMERS

13.Which Television you prefer to use ?

The reaction of people towards various television brands can be

tabulated in the following manner:

BRANDS ONIDA BELTEK CROWN OTHERS

PERCENTAG 40 23 33 4
E

In the survey, it can easily be concluded that TELEVISION of ONIDA, captures the
major portion of the market with a market share of 40%.This is followed by
CROWN, which holds 33%of the market share. This is followed by BELTEK , which

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holds 23%of the market share. Finally followed by other brands ( SAMSUNG,
LG, SONY etc) with a market share of 4%.

This data can be graphically explained with the help of the following bar graph:

40

35

30

25
ONIDA
20 BELTEK
CROWN
15 OTHERS

10

0
BRANDS

14.Which bicycle you prefer to use?

The reaction of people towards various bicycle brands can be

tabulated in the following manner:

BRANDS ATLAS HERO AVON OTHERS

PERCENTAG 37 33 22 08
E

In the survey, it can easily be concluded that the BICYCLE of ATLAS, captures the
major portion of the market with a market share of 37%.This is followed by HERO,
which holds 33%of the market share. This is followed by AVON , which holds

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22%of the market share. Finally followed by other brands (EXCEPT atlas, hero and
avon ) with a market share of 8%.

This data can be graphically explained with the help of the following bar graph:

40

35

30

25
ATLAS
20 HERO
AVON
15 OTHERS

10

0
BRANDS

15.Which refrigerator you prefer to use?

The reaction of people towards various bicycle brands can be tabulated in

the following manner:

BRANDS GODREJ VIDEOCON KELVINATO OTHERS

R
PERCENTAG 38 20 28 14
E

In the survey, it can easily be concluded that the REFRIGERATOR of GODREJ,

captures the major portion of the market with a market share of 38%.This is
followed by KELVINATOR, which holds 28%of the market share. This is followed by

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VIDEOCON , which holds 20%of the market share. Finally followed by other
brands (LG, SAMSUNG etc ) with a market share of 14%.

This data can be graphically explained with the help of the following bar graph:

16.Which wrist watch you prefer to use?

The reaction of people towards various bicycle brands can be

tabulated in the following manner:

BRANDS HMT MAXIMA TITAN OTHERS

PERCENTAG 26 14 40 20
E

In the survey, it can easily be concluded that the WRIST WATCH of TITAN,
captures the major portion of the market with a market share of 40%.This is
followed by HMT, which holds 26%of the market share. This is followed by

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MAXIMA , which holds 14%of the market share. Finally followed by other brands
(EXCEPT HMT, MAXIMA AND TITAN ) with a market share of 8%.

This data can be graphically explained with the help of the following bar graph:

17.Which fan you prefer to use?

The reaction of people towards various bicycle brands can be tabulated
in the following manner:

BRANDS LOCAL POLAR KHAITAN CROMPTON

FANS FANS
PERCENTAG 32 28 22 18
E

In the survey, it can easily be concluded that the FANS of LOCAL COMPANIES,
captures the major portion of the market with a market share of 32%.This is

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followed by POLAR, which holds 28%of the market share. This is followed by
KHAITAN , which holds 22%of the market share. Finally followed by CROMPTON
with a market share of 18%.

This data can be graphically explained with the help of the following bar graph:

Conclusions
Thus looking at the challenges and the opportunities which rural markets offer to
the marketers it can be said that the future is very promising for those who can
understand the dynamics of rural markets and exploit them to their best
advantage. A radical change in attitudes of marketers towards the vibrant and
burgeoning rural markets is called for, so they can successfully impress on the 230
million rural consumers spread over approximately six hundred thousand villages
in rural India.

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The rural market is very large in compare to the urban market as well as it is more
challenging market. The consumer wants those products which are long lasting,
good, easy to use and cheaper. The income level of rural consumers is not as high
as the income level of urban consumers that’s why they want low price goods. It
is one of the reasons that the sell of sachet is much larger in the rural area in all
segments. It is necessary for all the major companies to provide those products
which are easy to available and affordable to the consumers. It is right that the
profit margin is very low in the FMCG products, but at the same time the market
size is much large in the rural area. The companies can reduce their prices by
cutting the costs on the packaging because the rural consumers don’t need
attractive packaging. Application of 4A* is also a major task for the major
companies in this area.

Rural market has an untapped potential like rain but it is different from the urban
market so it requires the different marketing strategies and marketer has to meet
the challenges to be successful in rural market.

In this report, it can very easily be concluded that HUL, holds major portion of the
FMCG market. It holds major shares in the soap, detergent, shampoo & cream ’ s
category. HUL’s products are mainly in demand, because they provide these
products in different packs. They consider the fact that rural consumers do not
have that much money to be spent on these products. So, they prefer buying the
small or the medium packs. However, large or family packs are still been bought
by few consumers, who are from a well –off families.

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In the case of TEA, TATA holds a major share. In the case of COFFEE,
NESTLE & NESCAFE holds the major share. Rural consumers favor TATA because it
is an old organization &it has gained a lot of BRAND EQUITY which finally creates
BRAND LOYALTY. In these products, consumers do get brand loyal, because they
do not want to take a risk with their tastes. So they prefer sticking to one brand.
These organizations supply their products in various packs (small, medium
&large), considering the buying capacity of their consumers.

As in the case of BISCUITS, PARLE-G holds the major market share. Rural
consumers favor PARLE-G because it is an old organization & it has gained a lot of
BRAND EQUITY which finally creates BRAND LOYALTY. In case of BISCUITS,
consumers do get brand loyal, because they do not want to take a risk with their
tastes. So they prefer sticking to one brand. Though it is the cheapest biscuit but
still the taste is same and unique. “ACHA, SASTA AND TIKAU”.

In the case of TOOTH PASTES,COLGATE PALMOLIVE holds a major market

share. Consumers are very concerned about their health, so if any product suits

them they prefer sticking to that product. And this product is also available in
various packs, so rural consumers can se it according to their buying capacity.

In the case of HAIR OILS,MERICO holds the major market share. MERICO
is a much known organization & its product PARACHUTE has reached all the
places. So it is a known product, which has created a good amount of goodwill for
the organization. Consumers have confidence & trust in their product. Therefore,
they prefer buying it.

And in the case of durable goods like tv, fan etc. in rural areas people
generally don’t buy the company products, they prefer to buy local products
because of lack of knowledge and the main factor is because of income factor,
which is quite low in rural areas. Illiteracy is also a main factor. For them there is

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no such thing – “status symbol”. Although, there is a brand loyalty but the
percentage is very low.

Suggestions &recommendations
The researcher would like to suggest the following points, so that
the organizations can easily sell their products to their consumers:

1.However,the demand of a product is also affected by its life cycle. If the product
is in the introduction stage, then it will definitely take some time to capture the
market, because in the introduction stage, consumers are not much aware about
the product. Therefore, it is the responsibility of the organization to create
awareness amongst the consumers.

2.They should adapt rigorous marketing strategies, in order to sustain in the

market.

3.There is immense competition in this sector. Therefore, the organizations

should try to gain competitive advantage against their competitor’s.

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4.They should try to reach as many people as possible.

5.For the organizations that are not much popular amongst the consumers,
should adopt Sales Promotion, as their marketing strategies.

6.Application of 4A ’ s has also become an important task for all the organizations.
(*4A=Availability, Affordability, Acceptability, Awareness)

APPENDIX
1. Some Facts about the rural market
70 % of India’s population lives in 627000 villages in rural areas. 90 % of the
rural population is concentrated in villages with a population of less than 2000.
According to the NCAER projections, the number of middle and high-income
households in rural India is expected to grow from 80 million to 111 million by
2007. In urban India, the same is expected to grow from 46 million to 59 million.

Packaged consumer products: More than Rs. 2000 crores

Market for Non-food items: Rs. 20000 crores growing at 2.5% p.a.
Consumption of pesticides: 68,000 tonnes, growing at 12%p.a.
Share of Rural market in overall consumption

Toiletries
Safety Razor Blades 48%
Premium Soaps 24%
Tooth Paste 20%
Hair Oil 20%

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OTC products
Medicated dress 25%
Cold Analgesic 42%
Antiseptic Creams 28%

2.) Product Adoption: Hair products were introduced to rural India in an attempt
to capitalize on a culture where hair grooming is taken extremely seriously by
women. While rural women may wear faded saris and little jewelry, few step out
without ensuring that their hair is in place. Consumer goods companies
introduced a transplanted product from developed markets, the 2-in-1
shampoo/conditioner. Companies thought that women would be attracted to this
product because it was cost-effective; however, initial sales were dismal. What
companies failed to recognize is that most rural consumers had previously never

used shampoo and did not value or understand the full benefits of conditioner.
However, several years back, Hindustan Lever focused on product development
strategies for rural consumers who still did not use shampoo in India. Their
research indicated that a prevailing consumer habit in rural India was to use soap
for hair and body care. Rather than try to change instilled consumer behavior,
product developers focused on creating an opportunity. Consumers wanted a
product that was convenient and low-cost. The result was a new 2-in-1 soap, a
product that cleans the hair and body, and is targeted towards consumers in rural
areas.

SOME STRANGE FACTS

Amazing innovator
With a queer psychology of purchase and usage, Indian rural market is still a
puzzle to marketers. In many a case, it stretches its imagination to find
surprisingly different uses of some of the products. And the red-faced marketers
admit that they actually sell their products in areas they would otherwise find
difficult, simply because there are other uses for them. For instance,

 Buffaloes displayed at the haats for sale are dyed an immaculate black with
Godrej hair dye.

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 Horlicks is used as a health beverage to fatten up cattle in Bihar.

 In villages of Punjab, washing machines are being used to make frothy lassi
in
bulk.
 Iodex is rubbed into the skins of animals after a hard day's work to relieve
muscular pain.

3.) Communication Adaptation: Both, washing and for taking bath - one requires
water. Now for rural markets there are three sources of water - wells, handpumps
and ponds. For the first in the history of advertising - these were branded. Special
stickers were put on the handpumps, the walls of the wells were lined with
advertising tiles and tinplates were put on all the trees surrounding the ponds.
The idea was to advertise not only at the point of purchase but also at the time of

consumption. This case shows that the brand was some how relating to the
consumer. It was right there when the consumer wants it and responds to his
needs when wanted. So the customer could also see the advertising when he was
bathing or washing. Now, the customers who bought these brands got a sense of
satisfaction by seeing their choice being advertised in these places while a
question was put in the minds of the customers who had bought other brands.

Questionnaire
 name:
 occupation:
 monthly salary:
a) a.less than 10,000
b) b.10,000 –25,000
c) c.25,000 –50,000
d) d.More than 50,000
 address:

1. Which soap u prefer to use?

a) Lux
b) Lifebuoy
c) Dettol

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d) Others

2. Which pack u prefer to use?

a) Medium pack
b) Family pack

3. Which tea u prefer to use?

a) Taj mahal
b) Tata tea
c) Brooke bond
d) Others

4. Which tea pack u prefer to use?

a) Sachet
b) Small pack
c) Medium pack

5. Which tooth paste u prefer to use?

a) Colgate
b) Close up
c) Pepsodent
d) Others

6. Which coffee u prefer to use?

a) Nestle
b) Nescafe
c) Bru
d) Others

7. Which cream u prefer to use?

a) Ponds

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b) Fair and lovely

c) Ayur
d) Others

8. which hair oil u prefer to use?

a) Parachute
b) Dabur amla
c) Dabur vatika
d) Others

9. Which biscuits u prefer to use?

a) Good day
b) Marie gold
c) Parle G
d) Others

10.Which detergent u prefer to use?

a) Surf
b) Rin
c) Tide
d) Others

11.Which shampoo u prefer to use?

a) Sunsilk
b) Head and shoulders
c) Clinic plus
d) Others

12.Which pack u prefer to use?

a) Sachet
b) Small pack
c) Medium pack

13.Which Television you prefer to use ?

a) Onida
b) Beltek
c) Crown

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d) others
14.Which bicycle you prefer to use?
a) Avon
b) Atlas
c) Hero
d) Others

15.Which refrigerator you prefer to use?

a) Videocon
b) Kelvinator
c) Godrej
d) Others

16.Which wrist watch you prefer to use?

a) Titan
b) Hmt
c) Maxima
d) Others

17.Which fan you prefer to use?

a) Local fans
b) Khaitan
c) Polar
d) Crompton

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BIBLIOGRAPHY

 UTTAR PRADESH DEVELOPMENT AUTHORITY

 http://business.mapsofindia.com/rural-economy/state-
development/marketing.html

 http://www.ibef.org/economy/ruralmarket.aspx

 http://en.wikipedia.org/wiki/Rural_markets

 http://www.indianmba.com/Faculty_Column/FC213/fc213.html

 http://www.123eng.com/forum/viewtopic.php?p=76117

 http://ezinearticles.com/?Challenges-In-Rural-Marketing&id=1092597

 http://www.infibeam.com/Books/info/t-p-gopalaswamy/rural-marketing-
environment-problems-strategies/9788125916178.html

 http://www.naukrihub.com/india/fmcg/

 http://www.naukrihub.com/india/fmcg/overview/

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 http://www.naukrihub.com/india/fmcg/consumer-
class/income/

 Aithal K Rajesh,importance &growth of rural markets

 Purba basu,research on living style of rural consumers

 http://toostep.com/idea/challenges-in-rural-marketing

 http://images.google.co.in/images?
hl=en&rlz=1W1ADSA_en&q=%20rural%20marketing
%20india&revid=1994801258&resnum=0&um=1&ie=UTF-
8&sa=N&tab=wi

 http://www.articlesbase.com/marketing-articles/rural-
marketing-a-critical-review-1102352.html

 http://www.marketresearch.com/product/display.asp?
productid=2106282

 http://www.google.co.in/search?
hl=en&rlz=1W1ADSA_en&q=india+infrastructure+report+2
009&meta=&aq=2&aqi=g10&aql=&oq=INDIA+INFRA&gs_rf
ai

 http://www.encyclopedia.com/doc/1G1-162866493.html

 http://business.mapsofindia.com/india-
budget/infrastructure/india-rural-infrastructure-report.html

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