INNOVATION IN RURAL MARKETING

About 70% of the Indian Population resides in rural India which itself speaks of its potential. But Rural
India has an untouched potential which is why companies are trying to expand their horizons from
urban to rural and implement their business strategies in the rural market. Spending in rural markets
has increased of late, that is mainly because the incomes have increased over the past decade. Gone
are the days when people from small towns used to plan a trip to a nearby city or town to buy products
or go for shopping. Thanks to television, a customer here in rural market is aware of innumerable
products that are offered in the market place.
Urban market has been growing at a tremendous rate, but corporates see an untapped rural market
that can prove to be a first mover advantage for many if taken care of. Rural market is growing at a rate
twice as fast as of the urban market. They have witnessed a tremendous rise in sales of hitherto typical
urban products such as refrigerators, pressure cookers, air conditioners, mobile phones etc. Hero has
been one of those companies whose motorbikes sell more in rural market than in the urban. Heros
splendor has been a great hit in the rural market.
There are a lot factors that need to be considered when we talk about rural market. One is the
penetration of the internet. Internet penetration is only 15 % in India, and this calls for a huge
opportunity as with the advent of internet a lot of target market and segments can be covered. The
other is the distribution channels in the rural India. Earlier there were problems with the road
connectivity between many villages and urban cities, infrastructure has been improving with time and
we see a good connectivity through roads hence people have been taking non agricultural jobs too (a
rise in non-agricultural market, though a stagnant growth in the agricultural sector has been a cause of
concern). The new culture of working outside your village and good road connectivity has also given a
green light to packaged food products (as demand and supply both can be met ).
Yes, the geographical width of the product distribution has to be increased but the focus of the
corporates should be on introduction of the brand and building a strategy specific to rural market.
Organizations should not make the mistake of treating rural market parallel to the urban market by
offering them the same value proposition. For e.g. if we take the case of ghadi detergent what ghadi did
was they formulated their product according to the quality of the water (i.e. mapped the quality of the
water region wise), if water for a particular region was found to be a little hard than normal, they added
a little more solvent chemicals to make washing easier. Thus this is how they became the market leaders
in the Indian detergent market.
Britannia Industries launched Tiger Biscuit especially for the rural market. Its share of the glucose biscuit
has been the largest.
The standard of living, rate of consumption for the rural consumer is entirely different from the urban
consumer. Various consumer goods companies have customised their prices and pack sizes for
penetrating the rural market. For instance CavinKares Chic shampoo sachet @ Re 1 has brought

revolution in rural marketing. To develop a product to suit the rural scenario, companies came up with
special rural products, like battery free radio by Phillips, Sampoorna TV by LG, chotta haathi, Tata Ace by
Tata
As the market penetration will improve, customer reach and retention would be the biggest factors in
the eyes of the companies. Rural market customers are perceived to be very brand loyal so the first
mover advantage would also play a big role followed by a good and reliable after sales service.
Companies who respond to these challenges will definitely be differentiated in the rural market place.
Television has played a huge role in being an effective communicator for the rural mass hence
companies should distinguish themselves with their advertisements. Advertisements that touch the
emotions and the products that cater to the emotional benefit of a consumer would drive quantum of
sales.
Active wheel mobile campaign and project shakti that continues to empower millions of women that
combines social responsibility business model and a good business strategy, was a huge success in the
rural markets. Active wheel mobile campaign was a huge success, a total of 7.7 million missed calls were
received (with 55% of the respondents from non-TV households).

PROSPECTS OF RURAL MARKETS:Some of the biggest companies generate a third of their consumers from rural India. Rural regions are a
home to about 75% of all new factories built in India in the last decade. According to Neilson FMCG
market in rural India is expected to cross $100 bn by 2025. According to Neilson rural India accounts for
nearly half of the sales in some the biggest FMCG categories. About half of the revenue of HUL and
Colgate comes from rural market. Almost 100% of village consists of Radio Transmission while Television
covers 87% of the territory of the country hence this as discussed earlier is a big opportunity. Several

FMCG companies such as Godrej , dabur , HUL , have increased their hiring in rural india and small towns
in order to establish a local connect and increase visibility. Nestle plans to make further inroads.
Automobile sector has seen a significant rise, in two wheeler segment hero has been doing very well
with the hero motorbikes. Marutis market share has increased by leaps and bounds in the last couple
of years.
Innovations in the Rural Market (IT) :
DESI CREW: - It is a rural business process outsourcing company whose services and operations are
based on impact sourcing model being socially responsible by creating jobs in the rural and semi-urban
areas. They train people to meet the back office demands. This helps companies reach economies of
scale as the professional services they provide are economically and quantitatively viable.
MITTI COOL: - An ingenious refrigerator made from terracotta that keeps water cool and vegetables
fresh for days. It does not use a single watt of electricity.
GYANDOOT :- Gyandoot provides the rates of various agro based commodities and land rates. Each
gyandoot caters to about 30 villages and 15 panchayats.
E-CHOUPAL: - It was introduced to bring farmers from remote areas to come in direct contact with the
consumer. It is an initiative by ITC Ltd. It provides a e- procurement of agriculture and aquaculture
products like soyabeans, wheat, coffee and prawns.ITC has provided computers and internet access in
rural areas across several agricultural regions of the country, where farmers can directly negotiate the
sales of their produce with ITC Limited. Online practices helps farmers to know about good farming
practices, mandi prices and helps them place orders for agricultural inputs like seeds and fertilizers. This
helps famers obtain a better price.

Aksh :- It is an optical fibre cable north india based company. Aksh has the license to lay down otpical
fibre cables in the rural areas. Cable TV viewers are low in the rural areas mainly because they cannot
afford it , hence penetration of the cable TV has been left unserved. The bandwidth that Aksh provides
supports a number of services and hence it will help increase the exchange of information.

References: http://indicconnect.com/Indian_rural_market_something_for_everyone.pdf
http://zenithresearch.org.in/images/stories/pdf/2012/March/ZIJBEMR/17_ZIJBEMR_MARCH12_VOL2_I
SSUE3.pdf
http://en.wikipedia.org/wiki/E-Choupal
http://theglobaljournals.com/paripex/file.php?val=August_2013_1376662228_f9d4f_55.pdf
https://www.youtube.com/watch?v=R2JYoTUW9b0