The strength of future companies in the comingyears would neither be saturated urban markets or export markets which suffer from uncompetitive prices overseas but the rural market.
What is Rural marketing?“Rural marketing can be seen as a function which manages all those activities involved in assessing, stimulating & converting the purchasing power into an effective demand for specific products & service & moving them to the people in rural areas to create satisfaction & a standard of living for them & there by achieves the goals of the organization.” - Dr. Omkareshwar Manappa
Profile of rural consumersAbout 68% of Indias population (593731 villages ,300 cities and 4600towns) (*Census Board 2011)Consumer Characteristics:• Low purchasing power• >600 million consumers spread over 5,93,731 villages• Low per capita income• Low literacy level-58% (Urban 79% )• Divisions based on caste, community and other hierarchical factors• 60% of rural income is from AgricultureRural consumers value for money (Don’t pay extra for frills)• Rural Demand – Seasonal or Festival
Factors influencing rural consumer behavior• Environment of the consumer: (Electrification, water supply ,road network, education)• Creative use of product: – Godrej hair dye being used as a paint to colour horns of oxen, – Washing machine being used for churning lassi.• Product: preferences for color, size, design and shape differs . Eg. Philips audio systems.• Social practices: Variety in cultures each exhibits different social practices• Decision making by male head: – For example, the Mukhiya’s opinion in most cases, is shared with the rest of the village
Profile of urban consumers• High literacy• High income• High awareness• High standard of living• Brand conscious• Buying decisions; – family influences, – peer group influences, – personal interest, – information and experience, – Situational influence – Social surroundings -Physical surroundings - Temporal factors
Current Scenario Of Rural India & Govt. Initiatives
• 700 million potential consumers,• over 40 per cent of the Indian middle-class, and about half the countrys disposable income
• 68% population of India is in Rural India.• More than 10 Government schemes Running.• Main Target is to Increase Rural income by generating employment.• SGSY, MNREGA, SHG’s – Step towards Generating Employment.
• Budget Allocation up from INR 10,000 Crs. to 58,000 Crs. for rural development.• As per BCG and CII reports Rural Customers will be 36% of House Holds by 2025.• This market will be open for retail sector.• Ten Fold growth In rural Market by 2025 to reach USD 100 Bn Mark. - HUL
Marketing In Rural India• Rural Marketing is Less Liquidity Demanding.• Village Meals, Nukkad Natikas, Mobile Vans, Wall Paintings Can do the trick.• These marketing attempts have been very effective.
Why Companies need to target rural market• Saturation in urban market.• To counter or match the competitor’s strategies.• The government increase in spending in rural areas.• Increase in rural purchasing power.• New favorable policy measures by government.• Rural spending is now less dependent on farm income,.• Source of raw material in a cost efficient manner• Gaining access to cheap labor pools.
Challenges in rural marketing• Right Competence• Limited knowledge• Transportation• Communication – Literacy rate 41.2%(1991) to 58.4%in 2011• Retailing & Warehousing – For every 16 villages there is one bank
Traditional four P’s of marketing —product, price, place and promotion,Four A’s — affordability, awareness, availability and acceptability
HUL : Khushiyon Ki Doli• Awareness: 4-5 teams of promoters head to each village and invite the residents to gatherings ( ‘mohallas’) to make them aware of the company and its products.• Consumer Engagement: The promoters go door- to-door and conduct consumer home visits to generate trials where they offer promotions to the consumers.• Retail: Finally, there is another team which visits all the shops in the village which ensures improved availability and visibility of the brands.
PRIVATE COMPANY EFFORTSCoca-Cola’s Parivartan• Trained more than 6,000 retailers to display and stock products Coca-Cola• Provided low-cost iceboxes as regular power outages meant families could not depend on refrigerators.• Doubled sprnding on advertising on Doordarshan, which alone reached 41% of rural households.Dabur ASTRA• ASTRA [advanced sales training for retail ascendance]• In several regional languages.
• Godrej introduced three brands of Cinthol, Fair Glow and Godrej (soap) in 50-gram packs, priced at Rs 5;• Adidas and Reebok increased their sales by 50% in rural markets by reducing prices.
FMCG• HUL’s Project Shakti,• Colgate Palmolive: Operation Jagruti-Switch from Charcoal to Colgate tooth powder• Tata Tea’s Gaon Chalo• ITC’s E-Chaupal• Cavin Kare : Free sample of Chik Champoo• Marico Industries - Parachute coconut oil -“Sudhata ki pehchan”
Consumer Durables• Videocon introduced a washing machine without a drier for US$60;• Philips launched a low-cost smokeless chulha• DCM Shriram developed a low-cost water purifier especially for rural areas• LG Electronics Sampoorna : developed a customized TV which was cheap and capable of picking up low-intensity signals for the rural markets