RURAL MARKETINGRural marketing is the study of all theActivity , agency and policy involved inThe procurement of farm inputs by the Farmers and the movement of rural products from farmers to consumers. _ G.N. MURTHY
NATURE OF RURAL MARKETINGThe rural market is quite different fromurban markets.Agriculture is the chief economicactivity in rural areas, the entire villagepopulation is associated directly orindirectly to agriculture.In the process of development ofcivilization agriculture and pastoral lifealong river banks are the first of settledlife.
Importance of rural marketing Size of rural marketRural target populationEmploymentBetter living Contribution to national income Increase in farm income
Rural v/s UrbanOCCUPATION:Rural:Cultivators n few non –agricultural pursuits.Urban:manufacturing,trade,commerce,professions
Size of community Rural:open farms & small community are –vly co- related Urban:urbanity & size of community are +vly co- related
Problem and difficulties faced in rural marketing Lack of proper communication Distribution problem Seasonal demand Low literacy level
Rural productsRural products are the results of the art of agriculture and allied activities.In a narrow sense,rural products refer to the products arising out of the cultivation, namely various crops, vegetables and fruits etc.
Types of rural goods Industrial goods consumer goodsIndustrial goods:-industrial rural goods are those use for further industrial processing. e.g. tabacoo, fibre crops like cotton and jute.Consumer goods:-goods are mean for direct use like all foodgrains, dairy product, poultry products vegetables and fruits.
Attractiveness of rural marketRural markets have become the new targets tocorporate enterprises for two reasons :1. Urban market has become congested withtoo many competitors.2. The market have reached a near saturationpoint.
Various factors which have made rule markets viable:-1. Large population2. Raising prosperity3. Growth in consumption4. Life-style changes5. Life-cycle advantages6. Market growth rates higher thanurban7. Rural marketing is not expensive8. Remoteness is no longer a problem
Now for some facts and figures. The Indianrural market today accounts for only about Rs8 billion (53 per cent - FMCG sector, 59 percent durables sale, 100 per cent agriculturalproducts) of the total ad pie of Rs 120 billion,thus claiming 6.6 per cent of the total share. Soclearly there seems to be a long way ahead.Time and again marketing practitioners havewaxed eloquent about the potential of the ruralmarket. But when one zeroes in on thecompanies that focus on the rural market, amere handful names come to mind. HindustanLever Limited (HuL) is top of the mind withtheir successful rural marketing projects likeProject Shakti and Operation Bharat.
RURAL MARKETING CHANNELSMarketing channels are routes through whichrural products move from producers toconsumersCleary the main challenge that one faces whiledealing with rural marketing is the basicunderstanding of the rural consumer who isvery different from his urban counterpart.Also distribution remains to be the singlelargest problem marketers face today when itcomes to going rural. "Reaching your productto remote locations spread over 600,000villages and poor infrastructure - roads,telecommunication etc and lower levels ofliteracy are a few hinges that come in the wayof marketers to reach the rural market
In 1998 HuL’s personal products unit initiatedProject Bharat, the first and largest rural home-to-home operation to have ever been preparedby any company. The project covered 13million rural households by the end of 1999.During the course of operation, HuL had vansvisiting villages across the country distributingsample packs comprising a low-unit-pricepack each of shampoo, talcum powder,toothpaste and skin cream priced at Rs. 15.This was to create awareness of the company’sproduct categories and of the affordability ofthe products.
The greatest challenge for advertisers andmarketers continues to be in finding the rightmix that will have a pan-Indian rural appeal.Coca Cola, with their Aamir Khan adcampaign succeeded in providing just that.
"Yaara da Tashan...” ads withAamir Khan created universal appeal for Coca Cola
"Yaara da Tashan..." ads with Aamir Khancreated universal appeal for Coca ColaCoca-Cola India tapped the rural market in abig way when it introduced bottles priced at Rs5 and backed it with the Aamir Khan ads. Thecompany, on its behalf, has also been investingsteadily to build their infrastructure to meet thegrowing needs of the rural market, whichreiterates the fact that this multinational hasrealised the potential of the rural market isgoing strength to strength to tap the same.
For HLL, a one rupee or a five rupee sachet orthe Kutti Hamam (the small Hamam) helps ingiving the consumers a trial opportunity.While it does help in generate volume but notin terms of values. "Till the time that volume -value equation is managed better.Ultimately, the ball lies in the court of ruralmarketers. Its all about how one approachesthe market, takes up the challenge of sellingproducts and concepts through innovativemedia design and more importantlyinteractivity.
Amul is another case in point of aggressiverural marketing. Some of the other corporatesthat are slowly making headway in this areaare Coca Cola India, Colgate, EvereadyBatteries, LG Electronics, Philips, BSNL, LifeInsurance Corporation, Cavin Kare, Britanniaand Hero Honda to name a few.
Interestingly, the rural market is growing at afar greater speed than its urban counterpart."All the data provided by various agencies likeNCAER, Francis Kanoi etc shows that ruralmarkets are growing faster than urban marketsin certain product categories at least. The shareof FMCG products in rural markets is 53 percent, durables boasts of 59 per cent marketshare. Therefore one can claim that ruralmarkets are growing faster than urban markets
In 2000, ITC took an initiative to developdirect contact with farmers who lived in far-flung villages in Madhya Pradesh. ITCs E-choupal was the result of this initiative.
So the fact remains that the rural market inIndia has great potential, which is just waitingto be tapped. Progress has been made in thisarea by some, but there seems to be a long wayfor marketers to go in order to derive and reapmaximum benefits. Moreover, rural India isnot so poor as it used to be a decade or soback. Things are sure a changing
Typical shop in rural India stocked with sachets, etc