Rural Marketing In India Beyond Tactics

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…

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

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

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

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

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%

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.

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

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

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Rural Marketing In India Beyond Tactics

by Rajesh Aithal on Feb 02, 2009

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Rural Marketing In India Beyond Tactics — Presentation Transcript