RURAL MARKETING

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RURAL MARKETING
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Introduction to Rural Marketing

• The first five years of the new millennium will
  belong neither to the urban markets which have
  reached saturation and where margins are under
  pressure not to the export markets, which suffer
  from inadequate infrastructure back home, and
  uncompetitive prices overseas. It will belong to
  rural marketing.

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RURAL MARKETING

• In the India context, the word RURAL is so much
  associated with agriculture and farmers that
  rural marketing tends to be seen as a marketing
  of inputs or outputs related to agriculture.

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What is Rural Marketing?

• Rural marketing is a function which manages
  all those activates involved in assessing,
  stimulating and converting the purchasing power
  into an effective demand for specific products
  and services, and moving them to the people in
  rural area to create satisfaction and a standard
  of living to them and thereby achieves the goals
  of the organization.

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Rural v\s Urban

• OCCUPATION
• RuralCultivators n few non agricultural
  pursuits.
• Urbanmanufacturing,trade,commerce,professions

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Size of community

• Ruralopen farms small community are vly
  co-related
• Urbanurbanity size of community are vly
  co-related

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Density of population

• Ruraldensity of population is lower than urban

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Mobility

• Ruralsocial mobility less.More migration from
  villages to town.
• Urbansocial mobility inreases with urbanity.

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System of interaction

• Ruralless numerous contacts per man.Predominance
  of personal relatively durable relations.
• UrbanGreater complexity,superficiality
  standarized formality in relations.

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• 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,

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Attractiveness of rural market

• Rural markets have become the new targets to
  corporate enterprises for two reasons
• 1. Urban market has become congested with too
  many competitors.
• 2. The market have reached a near saturation
  point.

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• Various factors which have made rule markets
  viable-

• Large population
• 2. Raising prosperity

3. Growth in consumption
4. Life-style changes 5. Life-cycle
advantages 6. Market growth rates higher than
urban 7. Rural marketing is not expensive 8.
Remoteness is no longer a problem
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• 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 (HuL) is
  top of the mind with their successful rural
  marketing projects like 'Project Shakti' and
  'Operation Bharat'.

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• Clearly the main challenge that one faces while
  dealing with rural marketing is the basic
  understanding of the rural consumer who is very
  different from his urban counterpart. Also
  distribution remains to be the single largest
  problem 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

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• In 1998 HuLs personal products unit initiated
  Project Bharat, the first and largest rural
  home-to-home operation to have ever been prepared
  by any company. The project covered 13 million
  rural households by the end of 1999.
• During the course of operation, HuL had vans
  visiting villages across the country distributing
  sample packs comprising a low-unit-price pack
  each of shampoo, talcum powder, toothpaste and
  skin cream priced at Rs. 15. This was to create
  awareness of the companys product categories and
  of the affordability of the products.

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• Khaitan fans' ad on a horse cart

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• 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.

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"Yaara da Tashan... ads with Aamir Khan created
universal appeal for Coca Cola
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• "Yaara da Tashan..." ads with Aamir Khan created
  universal appeal for Coca Cola
• Coca-Cola India tapped the rural market in a big
  way when it introduced bottles priced at Rs 5 and
  backed it with the Aamir Khan ads. The 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 market is going strength
  to strength to tap the same.

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• 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.
• Ultimately, the ball lies in the court of rural
  marketers. 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.

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• 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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• 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

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Satellite dish antennas reach rural India
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In 2000, ITC took an initiative to develop direct
contact with farmers who lived in far-flung
villages in Madhya Pradesh. ITC's E-choupal was
the result of this initiative.
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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

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Typical shop in rural India stocked with sachets,
etc
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Thank you