• Government agencies like IRDA (Insurance Regulatory and Development Agency and NCAER (National Council for applied Economic Research) define Rural as : Village with a population <5000 with 75% male population engaged in agriculture etc. population density <400 sq km
Rural Markets are defined as those segments ofoverall market of any economy, which are distinctfrom the other types of markets like stockmarket, commodity markets or Labor economics.
Urban & Rural Markets Key Differences Per capita Income Disposable Income Literacy levels Infrastructure Communication Geographical Spread Customer has many choices
Size of the market Largely Untapped Too crowded Urban MarketReasons Income on the rise/disposable for incomeGoing Rural Income from other than agriculture Income flow from urban /abroad Better exposure - media Great success stories HLL 50% Colgate 50% LG 50% Asian Paints 60% Dabur 40% Videocon 40% Cadbury’s 25%
Move to Rural Market …encouraging DataRural India buysSoft Drinks approx 45% of all soft drinksAlmost 50% motor cyclesApprox 55% of cigarettesHalf the total market for TV, Fans, pressure cooker, bicycles Washing soap, tea, blades, salt, toothpowderCoca Cola is growing over 35% in Rural areas compared to Over 22 % in UrbanAccording to Hasna Research , a market research farm thatHas published a Guide to Indian Markets 2006Consumer durables in Indian Villages risen sharplyTV Sales up by 200%Motorcycle by 77%There are 3000 households in rural area that earn > 50 lakhs
Low per capita income Low disposable income Inadequate fixed income (daily wages) Majority – depends on Agricultural Income Acute dependence on monsoon Consumption linked to harvest Infrastructure problems Roads, power Low awareness Communication- difficult & expensiveToo many languagesGeographic Spread
Awareness Key AffordabilityChallenges Availability 4A Acceptability 4 As 4 Ps Promotion Awareness Price Affordable Product Acceptable Place Available
• Marketing Strategy• Distribution Strategy• Promotional Strategy• Sales strategy
• Rural India offers tremendous opportunity for any company to tap.• Companies face many challenges in tackling the rural markets.• Important factors being an understanding of the rural customers needs, a reliable distribution channel, and an effective marketing communication strategy to put their message across to the rural consumer• The Mantra(four As)
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