Rural Marketing in India – Beyond Tactics Rajesh Aithal IIM Lucknow IIIT Allahabad Presentation

Structure Why are they important? Changes in Rural Markets Conceptualizing Rural Markets IT & Rural Markets More Ideas & Developments Cases – ITC echoupal , HP Rasoi Ghar Further Readings, books & blogs…

Why are they important?

Changes in Rural Markets

Conceptualizing Rural Markets

IT & Rural Markets

More Ideas & Developments

Cases – ITC echoupal , HP Rasoi Ghar

Further Readings, books & blogs…

Sudden Interest in Rural Markets GM drives into rural markets to spark sales Mint Jan 20 th Mobile phone vendors dial into rural segment ET Jan 18 th Hero Honda, Nicholas Piramal to focus on rural markets Domain-B 17 th Jan LG to focus on rural markets to fight slowdown ET Jan 14 th Cement firms shift focus to villages BS 1 st Jan

GM drives into rural markets to spark sales Mint Jan 20 th

Mobile phone vendors dial into rural segment ET Jan 18 th

Hero Honda, Nicholas Piramal to focus on rural markets Domain-B 17 th Jan

LG to focus on rural markets to fight slowdown ET Jan 14 th

Cement firms shift focus to villages BS 1 st Jan

Importance

72% is Rural

72% of the population & contributes nearly half of the country’s GDP ( ETIG, 2002-03) Rural is bigger than urban 6 lakh + villages 36 lakh shops (NCAER, 2002) (NCAER, 2002) 59% Durables 53% FMCG

72% of the population & contributes nearly half of the country’s GDP ( ETIG, 2002-03)

Rural is bigger than urban

6 lakh + villages

36 lakh shops

(NCAER, 2002)

According to Indian Market Demographics 2004, approximate size of rural market ranges from 300-500 million Absolute size is becoming bigger than that of urban market Purchase of CTV, VCRs & washing machines increased by 200% Since 2002 consumer expenditure in rural India has risen by 9%

According to Indian Market Demographics 2004, approximate size of rural market ranges from 300-500 million

Absolute size is becoming bigger than that of urban market

Purchase of CTV, VCRs & washing machines increased by 200%

Since 2002 consumer expenditure in rural India has risen by 9%

Figures FMCG – Rs 6,500 Billion Consumer Durables – Rs 500 Billion Agri-Inputs – Rs 4,500 Billion Automobiles ( 2 & 4 Wheelers) – Rs 800 Billion

FMCG – Rs 6,500 Billion

Consumer Durables – Rs 500 Billion

Agri-Inputs – Rs 4,500 Billion

Automobiles ( 2 & 4 Wheelers) – Rs 800 Billion

50% 55%

Future

By 2010 rural India will consume 60% of the goods produced in the country In 20 yrs rural Indian Market will be larger than the total consumer markets in countries such as South Korea or Canada today, & almost 4 times the size of today’s urban Indian market

By 2010 rural India will consume 60% of the goods produced in the country

In 20 yrs rural Indian Market will be larger than the total consumer markets in countries such as South Korea or Canada today, & almost 4 times the size of today’s urban Indian market

Rural Market Has arrived

What is Changing? Infrastructure Disposable Income Aspirations Media Penetration

Climbing Social Indicators Between 1981 to 2001 Number of pucca houses doubled from 22% to 41% and kuccha houses halved (41% to 23%) Percentage of BPL families declined from 46% to 27% Rural Literacy level improved from 36% to 59%

Between 1981 to 2001

Number of pucca houses doubled from 22% to 41% and kuccha houses halved (41% to 23%)

Percentage of BPL families declined from 46% to 27%

Rural Literacy level improved from 36% to 59%

Infrastructure Improving Rapidly In 50 years only 40% villages connected by road, in next 10 years another 30%. More than 90 % villages electrified, though only 44% rural homes have electric connections. Rural telephone density has gone up by 300% in the last 10 years, every 1000+ pop is connected by STD.

In 50 years only 40% villages connected by road, in next 10 years another 30%.

More than 90 % villages electrified, though only 44% rural homes have electric connections.

Rural telephone density has gone up by 300% in the last 10 years, every 1000+ pop is connected by STD.

Some impressive facts about the rural sector. In 2001-02, LIC sold 55 % of its policies in rural India. Of two million BSNL mobile connections, 50% in small towns/villages. Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT)

Some impressive facts about the rural sector.

In 2001-02, LIC sold 55 % of its policies in rural India.

Of two million BSNL mobile connections, 50% in small towns/villages.

Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT)

41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban) with cumulative credit of Rs 977 billion resulting in tremendous liquidity. Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns on Rediff online shopping site 42 million rural HHs availing banking services in comparison to 27 million urban HHs. Investment in formal savings instruments: 6.6 million HHs in rural and and 6.7 million in urban

41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban) with cumulative credit of Rs 977 billion resulting in tremendous liquidity.

Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns on Rediff online shopping site

42 million rural HHs availing banking services in comparison to 27 million urban HHs.

Investment in formal savings instruments: 6.6 million HHs in rural and and 6.7 million in urban

Urban Linkage

Conceptualize Rural Marketing

Domain of Rural Marketing 1 2 3 From To Rural Urban Rural Urban M Jha (1988)

Successful Cases

HP & Digital Photography ITC eChoupal Grameen Phone HP Rasoi Ghar

Marketing in India Blog : rajeshaithal.blogspot.com