SYNOPSIS On RURAL MARKETING For the partial fulfillment of the requirement of MASTER OF BUSINESS ADMINISTRATION IN MARKETING AND HR Affiliated to Mahamaya Technical University, Noida (U.P.) (2011-2013)Under The Guidance of: Submitted by: DR. AVIJIT DEY ANUJ KUMAR (Faculty Guide) Roll No.1168470034
RURAL MARKETING CONTENTSS.NO. SUBJECTS PAGE NO 1 INTRODUCTION 2 OBJECTIVE OF THE STUDY 3 PROBLEM/SCOPE OF THE STUDY 4 RESEARCH METHODOLOGY 5 DATA ANALYSIS 6 IMPORTANCE OF STUDY 7 SUGGESTION 8 CONCLUSION 9 BIBILOGRAPHY
INTRODUCTIONThe predominantly rural character of India’s national economy is reflected in the veryhigh proportion of its population living in rural areas. The predominantly rural characterof India’s national economy is reflected in the very high proportion of its population livingin rural areas. With more than 700 million people living in rural areas, in some 5,80,000villages, about two—third of its workforce was engaged in agriculture and alliedactivities with a contribution of 29 percent of India’s Gross Domestic Product (GDP),India’s economy is predominantly rural in character. India’s economy can be thought ofas comprising of two main sectors, namely, the Rural Sector and the Urban Sector. TheRural sector is, in turn, composed of two main sub sectors i.e. the agricultural subsector and the non-agricultural sub sector. Till recently, the focus of marketers in Indiawas the urban consumer and by large number specific efforts were made to reach therural markets. But now it is felt that with the tempo of development accelerating in ruralIndia, coupled with increase in purchasing power, because of scientific agriculture, thechanging life style and consumption pattern of villagers with increase in education,social mobility, improved means of transportations and communication and otherpenetrations of mass media such as television and its various satellite channels haveexposed rural India to the outside world and hence their outlook to life has alsochanged. Because of all the above factors, rural India in now attracting more and moremarketers.Rural marketing has become the latest mantra of most corporate. Companies likeHindustan Lever, Colgate Palmolive, Britannia and even Multinational Companies(MNCs) like Pepsi, Coca Cola, L.G., Philips, Cavin Kare are all eyeing rural markets tocapture the large Indian market. Coming to the frame work of Rural Marketing, RuralMarketing broadly involves reaching the rural customer, understanding their needs andwants, supply of goods and services to meet their requirements, carrying out after salesservice that leads to customer satisfaction and repeat purchase/sales. Earlier, thegeneral impression was that the rural markets have potential only for agricultural inputslike seed, fertilizers, pesticides, cattle feed and agricultural machinery. There is agrowing market for consumer goods as well.
OBJECTIVEThe concept and scope of rural marketsThe nature and attractiveness of rural marketsRoadblocks of Indian Rural MarketsSolutions to problems of rural marketsIndia is a land of diversity and about 70% of the Indian population lives in villages.These villages contribute in the economic development of the nation through theproduction of food grains, vegetables, fruits, etc. Export of these agriculturalcommodities result in the generation of capital and earnings of foreign exchange.Rural marketing involves the process of developing, pricing, promoting, distributing ruralspecific product and a service leading to exchange between rural and urban marketwhich satisfies consumer demand and also achieves organizational objectives.There are several roadblocks that make it difficult to progress in the rural market.Marketers encounter a number of problems like dealing with physical distribution,logistics, proper and effective deployment of sales force and effective marketingcommunication when they enter rural markets.Indian rural market has a vast size and demand base. Rural marketing involves theprocess of developing, pricing, promoting, distributing rural specific product and aservice leading to exchange between rural and urban market which satisfies consumerdemand and also achieves organizational objectives. As part of planned economicdevelopment, the government is making continuous efforts towards rural development.
PROBLEMS/ SCOPE OF THE STUDYThe rural market may be attracting marketers but it is not without its problems: Low percapita disposable incomes that is half the urban disposable income; large number ofdaily wage earners, acute dependence on the vagaries of the monsoon; seasonalconsumption linked to harvests and festivals and special occasions; poor roads; powerproblems; and inaccessibility to conventional advertising media. However, the ruralconsumer is not unlike his urban counterpart in many ways. The more marketers aremeeting the consequent challenges of availability, affordability, acceptability andawareness in rural market. Features of Rural market: • Large and scattered market • socio economic background • Changing demand pattern • Major income come from agriculture • Saving habit • Low standard of living • Poor infrastructure facilities • Media reach • Communication • Electrification Scope/ Attractiveness of Rural Market: • Large Population • Rising Rural Prosperity • Growth in Consumption • Changing Lifestyle • Life Cycle Advantage • Market Growth Rate Higher than Urban • Rural Marketing is not Expensive
RESEARCH METHODOLOGYType of Research : Descriptive and conclusiveData type : SecondaryData collection source : Magazines, journals, Books And Internet.Introduction:-This chapter aims to understand the research methodology establishing a framework ofevaluation and revaluation of primary and secondary research. The techniques andconcepts used during primary research in order to arrive at findings; which are alsodealt with and lead to a logical deduction towards the analysis and results.RESEARCH DESIGNI propose to first conduct a intensive secondary research to understand the full impactand implication of the industry, to review and critique the industry norms and reports, onwhich certain issues shall be selected, which I feel remain unanswered or liable tochange, this shall be further taken up in the next stage of exploratory research. Thisstage shall help me to restrict and select only the important question and issue, whichinhabit growth and segmentation in the industry.The various tasks that I have undertaken in the research design process are: Defining the information need Descriptive and casual research.
DATA ANALYSISSTEPS in the data analysis: Statement of the problem Identification of information needed to solve the problem Selection or development of instruments for gathering the information Identification of target population and determination of sampling Plan. Design of procedure for information collection Collection of information Analysis of information Generalizations and/or predictions
IMPORTANCE OF STUDYThe study is based totally on secondary data and such data relates to something of thepast and not the exact present scenario. Hence totally depending on such given datacould at timesbe misleading, that is no matter how good the report is one has to docertain amount of homework before jumping to conclusions on the basis of such study. Marketing activity is something that is never stable and is constantly changing withthe changing circumstances, ever changing rules and regulations that control theseactivities. Hence something which is very up-to-date as of now might become obsoletein a very short span of time. One has to be very cautious before taking any decisionbased on such data and has to think beyond what is given. No amount of data can beaccurate enough to give the desired results.
SUGGESTION1. Advertisements on rural media like radio, press media has been increased .2. Physical Distribution channel must be made strong.3. Awareness about the product must be increased among the peoples.4. Profit –margin percentage of the product for the retailers should be increased.5. The rural customers are usually daily wage earners and they don’t have monthly incomes like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced packs that they can afford given their kind of income streams. Then thing like the colour that attracts him is also important.
What Makes Rural Markets Attractive?Rural market has following attributes and the following facts substantiate this: -742 million peopleEstimated annual size of the rural market - FMCG Rs. 65,000 Crore Durables Rs.5,000 Crore Agri-Inputs (including tractors) Rs. 45,000 Crore 2 / 4 Wheelers Rs. 8,000 CroreIn 2001-02, LIC sold 55% of its policies in rural India.Of two million BSNL mobile connections, 50% are in small towns / villages.Of the 6.0 lakh villages, 5.22 lakh have a Village Public Telephone (VPT).41 million Kisan Credit Cards have been issued (against 22 million credit-plus-debitcards in urban), with cumulative credit of Rs. 977 billion resulting in tremendousliquidity.Of the 20 million Rediffmail sign-ups, 60% are from small towns. 50% of transactionsfrom these towns are on Rediff online shopping site.42 million rural households (HHs) are availing banking services in comparison to 27million urban HHs.Investment in formal savings instruments is 6.6 million HHs in rural and 6.7 million HHsin urban.Opportunities:-1. Infrastructure is improving rapidly -In 50 years only, 40% villages have been connected by road, in next 10 years another30% would be connected.More than 90% villages are electrified, though only 44% rural homes have electricconnections.Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop isconnected by STD.
Social indicators have improved a lot between 1981 and 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%.Low penetration rates in rural areas, so there are many marketing opportunities - Durables Urban Rural Total (% of Rural HH) CTV 30.4 4.8 12.1 Refrigerator 33.5 3.5 12.0 FMCGs Urban Rural Total (% of Rural HH) Shampoo 66.3 35.2 44.2 Toothpaste 82.2 44.9 55.6Marketers can make effective use of the large available infrastructure - Post Offices 1,38,000 Haats (periodic markets) 42,000 Melas (exhibitions) 25,000 Mandis (agri markets) 7,000 Public Distribution Shops 3,80,000 Bank Branches 32,000Proliferation of large format Rural Retail Stores, which have been successful also - • DSCL Haryali Stores • M & M Shubh Labh Stores • TATA / Rallis Kisan Kendras • Escorts Rural Stores • Warnabazaar, Maharashtra (Annual Sale Rs. 40 crore).Rural Consumer Insights • Rural India buys -Products more often (mostly weekly).Buys small packs, low unit price more important than economy.In rural India, brands rarely fight with each other; they just have to be present at theright place.Many brands are building strong rural base without much advertising support.
Chik shampoo, second largest shampoo brand.Ghadi detergent, third largest brand. • Fewer brand choices in rural areas; number of FMCG brand in rural is half that of urban. • Buy value for money, not cheap products .Why Different Strategies?Rural markets, as part of any economy, have untapped potential. There are severaldifficulties confronting the effort to fully explore rural markets. The concept ofrural markets in India is still in evolving shape, and the sector poses a variety ofchallenges. Distribution costs and non-availability of retail outlets are majorproblems faced by the marketers. The success of a brand in the Indian rural marketis as unpredictable as rain. Many brands, which should have been successful, havefailed miserably. This is because most firms try to extend marketing plans that theyuse in urban areas to the rural markets. The unique consumption patterns, tastes,and needs of the rural consumers should be analyzed at the product planning stageso that they match the needs of the rural people.Therefore, marketers need to understand the social dynamics and attitudevariations within each village though nationally it follows a consistent pattern. Themain problems in rural marketing are: -Understanding the Rural ConsumerPoor InfrastructurePhysical DistributionChannel ManagementPromotion and Marketing CommunicationDynamics of rural markets differ from other market types, and similarly, ruralmarketing strategies are also significantly different from the marketing strategiesaimed at an urban or industrial consumer.
Strategies to be Followed:-Marketing StrategyMarketers need to understand the psyche of the rural consumers and then actaccordingly. Rural marketing involves more intensive personal selling effortscompared to urban marketing. Firms should refrain from designing goods for theurban markets and subsequently pushing them in the rural areas. To effectively tapthe rural market, a brand must associate it with the same things the rural folks do.This can be done by utilizing the various rural folk media to reach them in theirown language and in large numbers so that the brand can be associated with themyriad rituals, celebrations, festivals, "melas", and other activities where theyassemble.Distribution StrategyOne of the ways could be using company delivery van which can serve twopurposes - it can take the products to the customers in every nook and corner of themarket, and it also enables the firm to establish direct contact with them, andthereby facilitate sales promotion.However, only the bigwigs can adopt this channel. The companies with relativelyfewer resources can go in for syndicated distribution where a tie-up between non-competitive marketers can be established to facilitate distribution. Annual "melas"organized are quite popular and provide a very good platform for distributionbecause people visit them to make several purchases.According to the Indian Market Research Bureau, around 8000 such melas are heldin rural India every year. Rural markets have the practice of fixing specific days ina week as Market Days (often called "Haats) when exchange of goods and servicesare carried out. This is another potential low cost distribution channel available tothe marketers. Also, every region consisting of several villages is generally servedby one satellite town (termed as "Mandis" or Agri-markets) where people prefer togo to buy their durable commodities. If marketing managers use these feedertowns, they will easily be able to cover a large section of the rural population.
Promotional Strategy:-Firms must be very careful in choosing the vehicle to be used for communication.Only 16% of the rural population has access to a vernacular newspaper. So, theaudio visuals must be planned to convey a right message to the rural folk. The rich,traditional media forms like folk dances, puppet shows, etc., with which the ruralconsumers are familiar and comfortable, can be used for high impact productcampaigns. CONCLUSIONThus, looking at the challenges and the opportunities, which rural markets offer to themarketers, it can be said that the future is very promising for those who can understand
the dynamics of rural markets and exploit them to their best advantage. A radicalchange in attitudes of marketers towards the vibrant and burgeoning rural markets iscalled for, so they can successfully impress on the 230 million rural consumers spreadover approximately six hundred thousand villages in rural India .The growing opportunity in the rural market is no doubt the prime factor. The ruraldemand has been growing rapidly and its composition has been changing for the betterin the recent years. The increased income/ purchasing power of the rural consumer andthe improved income distribution has enhanced rural demand for several products.Better access to many modern products/brands has added to this growth.The heat of competition in the urban market actually serves as the stronger driverbehind the growing interest of cooperates in the rural market. The fact that the ruralmarket is still largely an untapped as well as the early entrants can tap it withouthaving to face intense competition as in the case of the urban market, makes the ruralmarket all the more attractive to them.Corporate have been finding the going increasingly tough in the urban market ,especially for the products in respect of which penetration levels are already high . BIBLOGRAPHY
Study books: • David H Maister, "Marketing Professional Services”,”Forward-Thinking Strategies for Boosting Your Business, Your Image, and Your Profits," 2nd Edition. Sep 2002. Edition. 13, Is. 3; p. 57.delhi. • Ali Abdulla, “The Marketing of Nations”, “A Strategic Approach to Building National Wealth”, Aug 1997, Edition 122, pg. 104, Delhi. • T P Gopalaswamy, “Rural marketing environment, problems and strategies” third edition published by Vikash publishing house pvt. Ltd. Noida. • Nargundkar, “Market research” second edition Tata Mc Graw Hill. • Bucklin and Lattin, “A Study of the demographic and psychographic factors”: Journal of Marketing Vol.65, (January 2007).