2. Rural Marketing- Content
Introduction to Rural Marketing
Rural Consumer Behavior and Marketing Research
Segmenting, Targeting and Positioning in Rural Markets
Product and Services
Pricing
Distribution
Promotion
3. The future lies with those companies who see the “poor” as
their customers.
CK Prahalad to Indian CEO's, Jan 2000.
To get rich, sell to the “poor”.
Pradeep Kashyap.
Rural Marketing
4. Rural Marketing- Definition
“Rural marketing can be seen as a function which manages
all those activities involved in assessing, stimulating and
converting the purchasing power into an effective demand
for specific products and services, and moving them to the
people in rural area to create satisfaction and a standard of
living for them and thereby achieves the goals of the
organization”.
5. NATURE AND CHARACTERISTICS OF RURAL
MARKET
• Agriculture is main source of income. The income is seasonal in nature.
• Though large, the rural market is geographically scattered.
• It shows linguistic, religious and cultural diversities and economic
disparities.
• The market is undeveloped, as the people who constitute it still lack
adequate purchasing power.
• It is largely agricultural oriented, with poor standard of living, low-per
capital income, and socio-cultural backwardness.
6. SIGNIFICANCE OF THE RURAL MARKETS
1. Increase in population, and hence increase in demand.
2. A marked increase in the rural income due to agrarian prosperity.
3. Large inflow of investment for rural development programmes from
government and other sources.
4. Increased contact of rural people with their urban counterparts due to
development of transport and a wide communication network.
7. SIGNIFICANCE OF THE RURAL MARKETS
5. Increase in literacy and educational level among rural folks, and the resultant
inclination to lead sophisticated lives.
6. Inflow of foreign remittances and foreign made goods in rural areas.
8. FACTORS CONTRIBUTING TO THE
CHANGE IN THE RURAL MARKET
lRural communication
lEmerging Role of Bio-Tech. in Indian Agriculture Sector
lGreen Revolution
lDevelopment programmes
Intensive Agricultural District Programme (IADP- Package
Programme)
Intensive Agricultural Area Programme (IAAP)
High Yielding Varieties Programme (HYVP- Green Revolution)
l
9. PROBLEMS IN RURAL MARKETING
l Transportation
l Communication
l Availability of appropriate media
l Warehousing
l Village structure in India
l Rural markets and sales management
l Inadequate banking and credit facilities
l Branding
l Packaging
10. RURAL MARKETING MODEL
l
l Research
l Segmentation
l Life style analysis
l Profile study
lDefine needs
lTarget Market
lMarketing Mix
lImplementation
lControl
13. Profile of rural consumer
l
l Low literacy levels
lLow income level in general
lLocation patterns of rural consumers
lReference groups
lOccupation
lMedia habits
lOther variable ( Culture, language, religion etc)
14. Simple model of rural consumer behavior
Need Recognition
Pre- purchase search
Evaluation of
Alternatives
Purchase decision
Post-purchase
Behavior
15. Rural marketing research-Sources
Primary sources
Retail shops/STD booth
Tea stalls
Playgrounds/ school
Choupals
Haats and Melas
Influence group
Secondary sources
Government websites
Private bodies
Publication
16. Rural Research method
Faces – Lux, Lifebuoy,OK, Hamam, Nirma Bath
Colour Wheel- Green-Good crop
Light green- Not very good crop
Yellow- Dry field (Dry sand
Orange -Setting Sun
Red – Danger
Dice – Rate the items by assigning the face values of the die to the
item
Lux Lifebuoy OK Hamam Nirma
17. Rural Research method
Rummy Coins/ Carrom Coins/ Weights
Stacking techniques- Stacks of five, four, three, two and one coins are
made ready.
Playing cards-
Ranking : A small bamboo ladder with the same number of rungs as
the number of items to be compared is constructed
1
2
3
4
5
19. Segmentation
1. Identify Segment Variables :
lGeographic segmentation:
lDemographic segmentation
lPsychographic segmentation
lBuyer Behavioral segmentation
l2. Segment the market
l3. Develop the profile
l4. Select the target market
l5. Evaluate the market
l6. Evaluate the segment
20. Targeting and Positioning
Targeting: Characteristics of each segment but also “
distinctive excellence”
Positioning: Unique features of the product, some special need
in the market or some noticeable gap in the competitors.
22. Product
“ Anything that has a value in exchange”
Product – price – place – promotion
Challenges – Availability, affordability, acceptability &
awareness
Marketing Tools Marketing Challenge
Product Acceptability
Price Affordability
Place Availability
Promotion Awareness
23. Rural Product
“ Product in the rural perspective is a need- satisfying entity
unique to a rural consumer and not a futile extension of an
urban offering”
25. Rural Product Categories
Rural product
FMCGs:
Dabur
Marico
Colgate
Pamolive
Consumer Durables:
LG,
Videocon
Onida
Philips
Services:
SBI
BSNL
Dena Bank
Agri-Imput:
Rallis India
Bayer
Novarties
26.
27. Appropriate Product Strategies
Existing & New Products
Product features – service quality – price &
performance relationship
Simplicity is key
“ Sense & Simplicity”
Urban market successes could be rural market
failures
Appropriate new product development processes
28. Product Development Stages
Stage Marketing Activities
Idea Generation •Searching for new product ideas
Idea Screening •Select the most promising ideas and drop those with only limited potential. Study the needs and
wants of potential buyers, the environment and competition.
Concept Testing •Describe or show product concepts and their benefits to potential customers and determine their
responses. Identify and drop poor product concepts. Gather useful information from product
development and its marketing personnel.
Business Analysis •Assess the product’s potential profitability and suitability for the market-place. Examine the
company’s research, development, and production capabilities. Ascertain the requirements and
availability of funds for development and commercialisation. Project ROI.
Product Development •Determine technical and economic feasibility to produce the product. Convert the product idea
into a prototype. Develop and test various marketing mix elements.
Test Marketing •Conduct market testing. Determine target customers’ Reactions. Measure its sales performance.
Identify Weaknesses in product or marketing mix.
Commercialisation •Make necessary cash outlay for production facilities. Produce and market the product in the
target market and effectively communicate its benefits.
32. Issues in Pricing
Internal & external factors
Selecting pricing methods
Pricing adaptations
Low price points – Simple packaging – utility around
packaging material
Highlighting value
33. Price Adaptations ( Indicative)
Product sharing services, Example: Tractors
Product Bundle pricing, Example: HUL Project Shakti
Free gifts – may sometimes not work in rural areas
Special event pricing-Ex: Utsav
35. Place- Rural Distribution Challenges
Large number of small markets
Dispersed population and trade
Poor connectivity
Low availability of suitable dealers
Inadequate banking/ credit facilities
Poor product display and visibility
Poor communication of offers and schemes
36. Levels of Distribution
Level Partner Location
1 Company Depot/ C & FA National/ State level
2 Distributor/ Van Operator/
Super Stockist/ Rural
Distributor
District level
3 Sub Distributor/ retail
Stockist/ sub stockist/star
seller
Tehsil HQ, towns and
large villages
4 Wholesaler Feeder towns, large
villages, haats
5 Retailer Villages, haats
37. Types of Promotions
Advertising
Sales promotions – coupons, contests, demonstrations
and sampling, Example: Tata Shaktee Haat Hungama
Direct marketing, Example: Videocon
Publicity, Example: Project Shakti
Using a direct selling through a sales force, Example:
Swasthya Chetna for Lifebouy
38. Promotion- Adaptations for Rural Markets
Conventional Non- Conventional Personalised
Television Haat and Mela Direct mailer
Radio Folk Media( puppet and
magic show)
POS (demonstration, leaflet)
Press Video Van Word of mouth
Cinema Mandi Interpersonal communication
Outdoor: Wall Painting,
Hoarding
Animator
39. Cont’d
Push strategy – sales force and trade promotion
Pull strategy – advertising and consumer promotion
40. Rural Consumer Insights
Rural India buys
Products more often (mostly weekly).
Buys small packs, low unit price more
important than economy.
Distribution and pricing are the mantras to
success in rural India.
41. Rural Consumer Insights
In rural India, brands rarely fight with each other, they
just have to be present at the right place.
Many brands are building strong rural base without much
advertising support.
Chik shampoo, second largest shampoo brand.
Ghadi detergent, second largest brand.
Fewer brand choices in rural : number of FMCG brands in
rural are half that of urban.
Buy “value for money”, not “cheap” products
42. 42
Challenges in the Future
Reaching the product to remote rural locations
and entering more rural homes (penetration)...
Increasing rural incomes (market growth)....
43. 43
Challenges in the Future
Making 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 32,000
44. 44
Challenges in the Future
Using IT to transform markets :
ITCs e-choupal and other IT initiatives EID
Parry, Amul dairy information system kiosk)
STD revolution/ mobile connectivity
45. 45
Challenges in the Future
Proliferation of large format rural retail stores
DSCL Haryali stores
M & M Shubh Labh stores
TATA/Rallis Kisan Kendras
Escorts rural stores
Warnabazaar, Maharashtra (annual sale Rs
120 crore)
