Rural Marketing

1. RURAL MARKETING

2. Reference
New Perspective in Rural & Agricultural Marketing
Y Ramkishen
Rural Marketing Book – Pradeep Kashap & Siddhartha Raut
Cases In Rural Marketing – An Integrated Approach
CGS Krishnmacharyulu & Llith Ramkrishnan

3. PROFILE OF RURAL MARKET
RURAL CONSUMER
MARKETING RESEARCH
RURAL MARKET RESEARCH
RURAL SEGMENTATION –TARGETING & POSITIONING
RURAL MARKETING STRATEGY
RURAL PRODUCT
RURAL PRICE
RURAL DISTRIBUTION
RURAL SALES FORCE MANAGEMENT
RURAL COMMUNICATION
TOPICS

4. What is Rural
Government agencies like IRDA (Insurance Regulatory
And Development Agency and NCAER (National Council
for applied Economic Research) define Rural as villages
with a population <5000 with 75% male population engaged
In agriculture etc”
Concept of Rural from the perspective of marketing has
Indeed been dynamic.- gradually changed over the times
Was not India a so called Village/Rural for the world a
couple of decades back
Census
Towns are actually rural areas but satisfy
The following criteria
Minimum Population>=5000
75% of the mail population engaged in
Non –agri activity
RB1
Location with population up to 10000
Considered Rural
Semi Urban 10000 to 100000
NABARD
All locations upto a population of 10000
Will be considered Rural
Sahara
All locations having shops/establishments’
Upto 10000 (not population related) are
Treated as Rural
LG Elect.
The rural and semi urban area is defined
As all cities other than major metros
NABARD National Bank for Agriculture & Rural Dev

5. What is Rural Marketing
Developing of the market in the area as defined as Rural
Hence it could be aptly said that it encompasses the
Activities such as developing the process to meet this
Objective – Right product at the right price to the right people
at the right time. Exchange between rural and Urban is a
Factor . Could be Urban to Rural: Rural to Urban, Rural to
Rural

6. Reasons
for
Going Rural
Size of the market
Largely Untapped
Too crowded Urban Market
Income on the
rise/disposable income
Income from other than
agriculture
Income flow from urban
/abroad
Better exposure - media
Great success stories
HLL 50%
Colgate 50%
LG 50%
Asian Paints 60%
Dabur 40%
Videocon 40%
Cadbury’s 25%
Hero Hona 40%
Sorce ORG Marg and Fransis
Kanoi

7. Points to Note with Regard to Rural Markets
Extremely Diverse Market
Villages – Size,
Population,
Spread,
Income
Literacy levels ,
awareness level,
languages
Urban Market – scope and saturation
Flow of funds – from Urban National /International
Literacy levels on the rise
Media Penetration

8. Encouraging Indicators/Initiatives for Rural Market Growth
Scientific methods – major impetus to Production of
food grains
Export on the rise – Increase in agriculture and handicrafts
Initiatives taken by banks for more branches and Kisan
credit card to buy seeds, fertilizers, consumer goods on
installment basis
Reputed Companies helping in changing lifestyles – Levers
Britania ,Dabur, LG, Honda,Videocon
Media creating an impact-creating awareness levels
Government Policies – White Revolution – Milk products
Yellow Revolution (poultry and edible oils)
Blue Revolution – Aqua culture
Employment Schemes – JRY(Jawahar Rojgar Yojna,
PMRY,Small Industries Training,
Ruiral Electrification, Spend on Health and Sanitation,
Medical and Health, Primary Education,
Credit card for farmers
Waiver of Loans
 Initiatives by leading organization in spreading awareness
Hindustan Levels Shakti, ITC Reliance etc

9. Move to Rural Market …encouraging Data
Rural India buys
Soft Drinks approx 45% of all soft drinks
Almost 50% motor cycles
Approx 55% of cigarettes
Half the total market for TV,
Fans,
pressure cooker,
bicycles
Washing soap,
tea,
blades,
salt,
toothpowder
Coca Cola is growing over 35% in Rural areas compared to
Over 22 % in Urban
According to Hasna Research , a market research farm that
Has published a Guide to Indian Markets 2006
Consumer durables in Indian Villages risen sharply
TV Sales up by 200%
Motorcycle by 77%
There are 3000 households in rural area that earn > 50 lakhs
We have come some way ahead – but there is a long way to go

10. PROBLEMS
IN
RURAL
MARKETING
Low per capita income
Low disposable income
Inadequate fixed income
(daily wages)
Majority – depends on Agricultural
Income
Acute dependence on monsoon
Consumption linked to harvest
Infrastructure problems
Roads, power
Low awareness
Communication- difficult & expensive
Too many languages
Geographic Spread
Digging for Diamond

11. Urban & Rural Markets
Per capita Income
Disposable Income
Literacy levels
Infrastructure
Communication
Geographical Spread
Customer has many choices
Key Differences

12. Profile of the Rural Consumer

13. Profile of the Rural Consumer
>Low Literacy Level
>Low Income Level
>Massive Geographic Spread
Urban population concentrated 3200 cities town
Rural scattered over 630000 villages
>Reference Group
Health Workers
Doctors
Teachers
Panchayat Members
Rural Bank Managers
District Managers
Occupation – Principal Farming
Trading
Handicrafts
Cattle & Poultry Farming
>Media Habits Fond of music T.V Radio Video Films
Generally they have a lot of reservation/inhibition
rigid in their behaviour

14. RURAL CONSUMER CLASS
The Affluent Class
The Middle Class
The Poor
RURAL CONSUMER BEHAVIOR
How does an individual decide to spread his
Available resources (time,money effort) on
Consumption-related products.
That is – what they buy
why they buy
when they buy
where they buy it
how often they buy it
how often they use it
Poor
Aspirant
Climbers
Well Off
Very Rich

15. Simple Model of Rural Consumer Behaviour
Need Recognition
Pre Purchase Search
Evaluation of Alternatives
Purchase Decision
Post purchase behaviour

16. Factors that Influence Rural Behaviour
Stimuli
Inputs to any senses
Products
Package
Commercials
Brand image
Reference
Information cues about
the characteristics of the
product
Perception
Depends on
Exposure Interpretation
Eg IFB had not adequately Educated
farmers about the Washing machine
-they thought It was a churn for making
large quantities of lassi (prosperous
village of Punjab)
Iodex – muscular pain
Reliever used on animals
After hard days work in MP
Godrej hair dye on Buffaloes
To make them look better in
Village haats in Raichur
Attitude
>Consumer belief
Consumer feelings

17. Key
Challenges
4A
Awareness
Affordability
Availability
Acceptability
4 Ps 4 As
Promotion Awareness
Price Affordable
Product Acceptable
AvailablePlace

18. RURAL MARKET RESEARCH

19. Marketing Research is a formalized means of obtaining
Information to be used in making marketing decisions
Market research
Issue Information Required to address
Design Method of Collecting Information
Manage The data collection process
Analyze The results
Communicate Finding and implication

20. SOURCES
FOR
CONDUCTING
RURAL
MARKET
RESEARCH
Primary Sources
Retail shops/STD booths
Tea Stalls
Playgrounds/schools
Chaupals (meeting point
old/middle aged/
influential)
Haats & Melas
Influence Group
Secondary Sources
Government website
www.censusindia.com
www.indiastat.com
www agroindia.com
Private bodies (market research
advertising agencies
Indian Market Research Bureau
Thompson Rural Index
Guide to Rural Markets
Publications

21. Tool Kits Used for Rural Market Research

22. Tool Kits Used for Rural Market Research
Faces
Color Wheel
Same Color – Different shades
Different Color
Happy ………Sad
Number of Coins
Ladder
Playing Cards

23. POINTS TO REMEMBER
FOR
RURAL MARKETING RESEARCH

24. Build Rapport - ***
Greet – need to be informal
Speak local language
Do not jump to survey –speak of other
matters of interest
Gradually lead to the objective of the interview
Explain the benefit of the survey – how it will gain
Interviewer should be aware of the rural area
Never make the respondent uneasy –
if he offers tea do not refuse
Remember …

25. RURAL MARKET
SEGMENTATION TARGETING & POSITIONING

26. SEGMENTATION
Very Varied –hence proper segmentation very essential
Geographic:
Region North, East, West and South
Village size
Climate
Demographic
Age
Family Size
Gender
Income
Occupation
Education
Caste
Psychographics
(consists of psychological: sociology: anthropological)
Lifestyle Rigid ,changing attitude, urban influence
Personality Authoritarian, Ambitious
Behavioral
Occasions Regular, special occasion
Benefits
User status regular user, first time user, non user
Usage rate Light, medium, heavy
Loyalty None, medium, strong
Attitude to ) positive, negative, hostile
Product )
Different variables could be used.. multilevel segmentation

27. Class Rural Consumer Classification
1995-
96 2006=2007
The Affluent/Very Rich Households owning 1.60% 5.60%
personal cars/jeep with other products
The Well Off Household owning any/all of the foll. 2.70% 5.80%
A.C/Motorcycle/scooter/washing m/c
color TV with other durable (No car/jeep)
The Climbers Households owning any/all of the foll 8.30% 22.40%
VCR/VCP,mixer grinder sewing m/c
audio equip, B/W TV,geyser with other durables
(not those mentioned in above 2 categories)
The Aspirants Households owning any/all of the foll 26.00% 44.60%
bicycle,electric fans, electric iron with other durab
(not those mentioned in above 3 categories)
The Destitutes/Poor Households other than those classified above 61.40% 20.20%
Households owning any/all of the foll
wristwatch,pressure cooker,cassette recorder
transistor/radio
Source - NCAER

28. DEVELOP THE PROFILE
Select the Target Market
Evaluate the Market
Evaluate the Segment
size
growth rate
profitability
accessible
compatible with firm’s resources & capabilities
Easy Hard
Low
High
Ease of Implementation
Value
to Rural
Customer

29. TARGETING
>Select Target Segment
>Formulate Market a marketing strategy for the target market
POSITIONING
One shoe fits all !!!! …….
Everything for Everyone !!!
It is “Something for Someone”
How to Position
USP of the product – uniqueness of the product
Special needs – either address partially/ unaddressed
Noticeable gap in the products available
Positioning Concept
Study the possible motives of the rural customer
Then figure out how to appeal to them
(USP, Price Quality Uses, Class, Culture etc
Select & Develop the Concept
Bridge gap between the product and the target market.
Communicate the Concept
Advertise and Reach (Media)
Offer Product
After STP (Segmentation, Targeting and Positioning)
Post Sales Feedback & After Sales Service

30. RURAL MARKETING STRATEGY

31. ENTERINING
THE
RURAL
MARKET
New Entrant
Company starts Rural
Market first & then
ventures in Urban
Market
(eg Cavin Kare Chik &
Meera Shampoo)
Mid- Entrant
Company starts Rural
Market after success in
Urban Market
(eg HLL, LG)
Late - Entrant
Company starts Rural
Market after success in
Urban Market for long
(eg Cadbury)
R
G
A
Retain
Grow
Add
Purpose the market

32. RURAL MARKETING STRATEGY
P
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Profile the Rural Market
Profile the Consumer
Market Behaviour & MR
Segmentation Targeting Positioning
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Rural Product
Rural Pricing
Rural Distribution
Rural Sales Force Management
Rural Communication
Monitor the Rural Strategy
Feedback & Control
1
2
3

33. DEVELOPMENTAL MARKETING
Developmental marketing is a process through which
awareness is created
>could be demonstration
>could be presentation
>Free samples
>could be through up eg tie up with Bank
tie up with Petrol/Diesel pumps
(Hyndai did with IOC and PNB and SBI subsidiaries
>30% sale of Hyndai from Rural/Semi Urban areas)
Awareness
Trial
Purchase
Post-Purchase Satisfaction
Colgate – program Operation Jagruti
Switch from Charcoal to Colgate tooth powder
HLL - Free samples of Lifebuoy
Cavin Kare – Free sample of Chik Champoo
Marico Industries – Parachute coconut oil
“Sudhata ki pehchan” –smell to differentiate between real and
spurious

34. RURAL PRODUCT
RURAL PRICE
RURAL DISTRIBUTION
RURAL SALES FORCE MANAGEMENT
RURAL COMMUNICATION

35. Rural Product
Product to be marketed with the requirements of the Rural Consumer
should not be an extension of urban offerings
(Philips launched Free Power Radio – does not require
Battery/electricity you wind it with a lever and radio runs
For approximately 30 min.
Classification
Of
Rural
Products
FMCG
(HLL, Dabur, Marico, Colgate=Palmolive
Coke, Pepsi)
Consumer Durables
TV ,Fridge, Fan, Presssure Cooker,
Cycle, Two wheelers, Sewing machines,
watch, mixer grinder, radio, music system,
Fans, Washing machines
(Philips, LG, Videocon, Onida )
Services
Telecom, Banking, Health care ,Insurance
(Airtel, BSNL, SBI, PNB,Dena bank,)
Agri-inputs
Seeds, pesticides, tractors
(Rallis India, Bayer,)
Product
Life
Cycle
(PLC)
Launch
Take Off
Maturity
Decline

36. Points to note
Rural Products
Easy to Use
After sales support
Conveniently packed- success of Sachets
Product literature to be simple
Have a logo – easy to identify eg Thums Up
Rural Packaging
Packaging material –plastics, poly packs, unbreakable materials
Looks - attractive colors (like all tea companies)
Size and convenience- small is beautiful
Rural Branding
1. Brand Name
2 Create Brand Identity
3 Enhance Recognition
4 Build a Brand Image
5 Countering Spurious brands
Look alike
Spell alike
Duplicates
Enhancing Brand Strategies with Social Perspective
Soaps for Hygiene
Cooking gas for environment
Creating need by more awareness
Partnering with a long term perspective requires total belief and
Commitment - to the people, to the processes, to their own employee.
Need to work for a cause – ITC, Hindustan Petroleum, HLL ,
Colgate Palmolive , Several Banks are a few such examples

37. RURAL PRICE
Pricing In Rural Market plays a key role in the success of a product
RURAL PRICING OBJECTIVES
 Have a long run perspective
Idea is to penetrate first
Increase Volume
Make using the product a habit
Volumes to take care of the Margins
Keep eye on Competition Price
The following may help in addressing the issue
Low cost –less amount (small packages- sachets)
Simple but colorful packaging – eg. success of biscuits
Refill packs
Value engineering – eg soya protein in place of milk protein
METHODS OF PRICING
1. Cost –Plus Pricing = cost of product +distribution +profit
2. Value Pricing (VFM-Value for Money) High Benefit
3. Power Price – eg Re 1, Rs 2, 3, 5,10
4. Penetration Price – Introduce at low and hike price after success
5. Differential Pricing –Different price for different market
6. Price Gap – Comp prices – range

38. RURAL DISTRIBUTION
Physical Distribution Channel of Distribution
Transportation
Warehousing Communication
PHYSICAL DISTRIBUTION
Transportation Railways, Roads ,Waterways, Animals
Communication ITC using internet, Mobile users by fisherman
Warehousing (Three Tier Rural Warehousing Set Up)
Central/State Warehousing
Cooperatives
Rural Godowns

39. WHY CHANNELS OF DISTRIBUTION
Geographical Spread
Dealers are few – hence required to bank on a number of resources
Financial Viability
Inadequate Bank and Credit Facilities
TO ADDRESS THE ABOVE CHALLENGES
Rely on Private Village Shops
Supply Chain Stores
Rural Super Market
Small companies tie up with large companies – Leverage/Syndicate
Distribution network of Marico to sell Tide by P&G
Satellite Distribution
Whole-
Saler
Town
D
D
D
D
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
SD
R
D-dealer
SD- Sub Dealer
R-Retailer

40. PLANNING FOR SALES FORCE MANAGEMENT
SET THE PERSONAL SELLING OBJECTIVES
FORMULATE THE SALES POLICIES
STRUCTURE THE SALES FORCE
SIZE OF THE SALES FORCE
ASSIGNING SALES TARGETS
CREATING SALES FORCE- SELECT, RECRUIT, TRAIN
SALES FORCE COMPENSATION, MOTIVATION, SUPERVISION
SALES COMMUNICATION & REPORTING
SALES COORDINATION/SALES CONTROL

41. TRAITS OF A RURAL SALESPERSON
Hardworking
Have Empathy
Enthusiastic
Perseverance
Knowledge
Attitude
Skills
Willingness to work in Rural Areas
Adopting to cultural differences
Down to earth approach
Fluent in local language
Developmental approach – Create not only Communicate
Common to both
Urban & Rural Sales person
Additional traits for making it Big in Rural Areas

42. The Success of Organizations depends on lot on the Sales Force
They are the face of the Organization – the Ambassador
They are the ones who have direct interaction with
The Potential Consumer/Customer
The Users
The Dealers
The Distributors
The Retailers
They are a major link to the chain and establish the link
They are the ones who help in building Trust
They need to break the rigid ideas and preconceived notions

43. RURAL COMMUNICATION
Effective Communication goes a long way in establishing the right
Messages and thereby more interaction with Potential Customers
Communication, however, is not complete if there is no feedback
It is very important to re enforce messages in Rural areas
Factors Affecting Rural Communication
Literacy level
Media Habits
Traditional approach
High resistance – more so initially
Lavish at occasions (eg Marriage)
Purchasing power also depending on weather- the crops
Inequitable distribution of wealth
Too many languages
Culture

44. RURAL MEDIA
Mass Media
(Conventional)
Traditional Media
(Non Conventional)
T.V /Cable network
Satellite Channels
Radio
Print
Cinema/
Theatre
Word of
Mouth
Video on
Wheels
Puppet Shows
Folk Theatre/Opera
Demonstration
Haats and Mela
Wall painting
Post card and posters
Booklets/Calendar
Advantages
>Excellent Reach
Less expensive ,wider
coverage
Disadvantages
At times unnecessary
coverage
No customized messages
Companies using this medium
Levers, Onida, Videocon
Mahindra Tractors, Eveready
Advantages
>High involvement
High Interest
Localized administered at low
cost
Disadvantages
Coverage
Repeat /Re enforcement
Skill of performer
Companies using this medium
Bajaj, Levers, HUL, ITC

45. You are the Marketing Director of A Company dealing
in Consumer Durables (TV, Fridge, Washing Machine
Music System, Microwave etc).
Your business has been growing steadily in the
Urban Market – however, you are aware that the
Business will grow manifold if you also cater to the
Rural market. (Present growth rate has been 8%.
You are targeting a growth of 14%)
Present your case to the Managing Director and the
Board – How you intend going achieving the desired
Objective – with your plans for opening up the
Rural Market
Take into account the following
The Target Audience
The Product proposition
Distribution Strategies and Sales Forecast
Pricing Strategies
Promotional Strategies
How the above strategies will help in achieving the
Business Objectives.
While making the presentation – you need to be clear on
1. Why you chose to launch the particular product
2. Why did you chose the particular location
(Opportunity Assessment)