GO RURAL & INDUSTRIAL EYES IN RURAL MARKETING Presented By: Poornima Singh Km.

Priti

RURAL MARKETING
Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas.

What is Rural Marketing?

Rural Marketing can be defined as a function that manages all activities involved in assessing, stimulating, and converting the purchasing power of rural consumers into an effective demand for specific products and services and moving these products and services to the people in rural areas to create satisfaction and a better standard of living and thereby achieving organizational goals.

URBAN

RURAL

RURAL

URBAN

RURAL

RURAL

Evolution of Rural Marketing

Phase Origin Function Major Products Agricultural produce Agricultural inputs Source Market Rural Destination Market Urban

Since independence Mid-Sixties

Agricultural marketing Marketing of agricultural inputs Rural marketing

II

Urban

Rural

III

Mid-Nineties

Consumables and durables for consumption and production All products & services

Urban/ Rural

Rural

IV

21st Century

Developmental marketing

Urban & Rural

Urban & rural

Nature of Rural Marketing

Large, Diverse and Scattered Market. Major Income of Rural consumers is from Agriculture. Standard of living & rising disposable income of the rural customers. Traditional outlook Rising literacy level Diverse socioeconomic background Infrastructure Facility

Taxonomy of Rural Markets

(Classification of Rural Markets)
Constituents Consumer Market Individuals and households Products Consumables: Foods products, Toiletries, Cosmetics, Textiles and Garments, Foot Wear etc. Durables Watches, Bicycles, Radio, T.V., Kitchen appliances, Furniture, Sewing machines, Two Wheelers etc. Tillers, Tractors, Pump sets, Generators, Harvesters, Boats etc. Services -------

Industrial Market

Agricultural and allied activities, Poultry farming, Fishing, Animal, Husbandry cottage industries, Health Centre, School, Cooperatives, Panchayat office etc. Individuals, House holds, Officers, and Production firms

Consumables: Seeds, Fertilizers, Pesticides, Animal feed, Fishnets, Medicines, Petrol/Diesel etc.

-------

Services Market

-------

-------

Repairs, Transport, Banking, Credit, Insurance Health care, Education, Communication, Power etc.

Whether Rural Markets are Attractive?

Large population Rising prosperity
INCOME GROUP Above Rs. 100,000 Rs. 77001-100,000 Rs.50,001-77000 25001-50000 Rs. 25000 & below 1994-95 1.6 2.7 8.3 26.0 61.4 2000-01 3.8 4.7 13.0 41.1 37.4 2006-07 5.6 5.8 22.4 44.6 22.2

Growth in consumption

Life-style changes Market growth rates higher than Urban Rural marketing is not expensive

Rural vs Urban Market Characteristics

Comparison Factors Purchase period

Urban Festivals & auspicious occasions Trust international brands more

Rural Harvesting season=> Low loan pay back ability Trusts domestic brands more=> Because of low awareness & information

Brand awareness

Household size

3,4 members

4.,8 members=> Low disposable income Haats & melas, mandis and word-of-mouth High cash purchase=> Limited retail finance availability & seasonal income pattern (72 million Kisan Credit Card) 25% annual growth

Channel of communication

TV, Print

Credit vs. cash purchase

High credit purchase

Market GrowthEx consumer durable

7-10% annual growth

The 4Ps Of Rural Marketing

1. Product
Category I These products are of immediate use to the family Pressure Cookers, Mono Cassette Record, Pressure Pans, Wrist watches (mechanical), Wrist watches (quartz) ,Radio/Transistors , Electric irons, Ceiling Fans Category II- These products reduce the strain of the households and also act as a source of entertainment. 2-in-1 (mono), 2-in-1 (stereo), B and W TV (S), B and W TV (R) , Instant Geyser, Sewing Machines, Storage Geysers, Vacuum Cleaners, Table Fans, Bicycles Category III- These are combination of means to supplement income. C TVs (S), C TVs (R), VCRs/ VCPs, Scooters, Mopeds, Motor Cycles, Refrigerators, Washing Machines, Mixer/grinders

2. Pricing
For example banks offer loans for tractors, pump sets, television sets and so on to make the product affordable to a rural consumer. Smaller unit packs are preferred in the case of FMCG products to offer at lower prices.

3. Placement or Distribution
A three tier rural warehousing setup exists: CWC/SWCs (Central/ State Warehousing Corporation) Co-operatives Rural Godowns Retailers in rural markets

4. Promotion
Rural communication can be through Conventional media or through a nonconventional media. Conventional media: Print, Cinema, Television and Print. Non-conventional media: Theatre, Posters, Haats, street plays, Melas and through influential person in the area.

The 4As of Rural Marketing

Availability
7, 00,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. They are highly dispersed. Given the poor infrastructure, it is a greater challenge to regularly reach products to the far-flung villages. Marketer should plan accordingly and strive to reach these markets on a regular basis. Marketers must trade off the distribution cost with incremental market

penetration.

Eg. India's largest MNC Hindustan Lever., Coca-Cola, LG Electronics

Affordability
With low disposable incomes, products need to be affordable to the rural consumer, most of who are on daily wages. A solution to this has been introduction of unit packs by some companies. Most of the shampoos are available in smaller packs. Fair and lovely was launched in a smaller pack. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50- gm packs. Hindustan Lever has launched a variant of its largest selling soap brand, Lifebuoy. Coca-Cola has addressed the affordability issue by introducing the smaller bottle priced at Rs 5. The initiative has paid off: 80% of new drinkers now come from the rural markets. Some product also can be made affordable by making available the loan facility by having alliance with banks.

Acceptability
There is a need to offer products that suit the rural market. LG Electronics have developed a customized TV for the rural market named Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Coca-Cola provided low-cost ice boxes in the rural areas due to the lack of electricity and refrigerators. It also provided a tin box for new outlets and thermocol box for seasonal outlets. HDFC Standard LIFE topped private insurers by selling policies in rural sector. The company tied up with non-governmental organizations and offered reasonably-priced policies in the nature of group insurance covers.

Awareness
A large part of rural India is inaccessible to conventional advertising media. The media penetration in rural areas is only about 57%.It has been seen that, two out of five Indians are unreached by any media - TV, Press, Radio and Cinema put together. Haats, mandis and melas are opportunities. Family is the key unit of identity for both the urban and rural consumer. However, the rural consumer expressions differ from his urban counterpart. For a rural consumer, outing is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence. Haats, mandis and melas are the place of opportunities to promote awareness about the product. E.g. Hindustan Lever , Godrej Consumer Products, Coca-Cola, LG Electronics , Philips

INDUSTRY EYES RURAL MARKET

FMCG
FMCG companies have realized a significant proportion of their sales from rural markets. Presently rural India accounts for 34% in FMCG consumption. They account for 70% of toilet soap and 50% of TV, fans, bicycles, tea and wrist watch consumption. HUL has launched special initiatives to push its rural sales through Project Shakti and Shakti Amma television channel Successful FMCG products have typically been low priced and available in small-unit packages. Ex. Parle-G priced at Rs. 2, Chik Shampoos sold in sachets priced at 50 paisa and 500gm

RETAIL
The rural retail market is currently estimated at US$ 112 billion, or around 40 per cent of the Indian retail market. Hariyali Kissan Bazar, promoted by DCM. ITCs Choupal Sagar. Large format retail stores called Adhaar also have been set up by Godrej Agrovet.

AUTOMOBILES
Rural areas have traditionally been major markets for automobiles such as tractors and cars Market leader in the small car segment, Maruti Suzuki India Limited, has registered almost a fifth of its sales from the non-metro areas across the country Mahindra & Mahindra is now selling more Scorpios in rural and semi-urban markets.

Another entrant is Toyota Kirloskar Motor,which is planning to sell 40% of its cars in rural markets in India.

CONSUMER DURABLES
Many companies are committed to modify their products to explicitly suit rural demands For example, lighting solutions company BPL Techno Vision has launched its rechargeable light emitting diode (LED) lantern 'BPL Chirag' for the domestic rural market.

Rural marketing strategies adopted by stated business houses

HUL Project Shakti, partnership with self help groups of rural women and covers 5000 villages in 52 districts in different states. Micro enterprises opportunities for rural women. Providing health and hygiene education through shaktivani program. Ishakti portal: Shakti has already been extended to about 15 states, 80000 villages in with 45000 women entrepreneurs and generating Rs 700 1000 per Month to each women.

Hero Motocorp Ltd:

To strengthen their network in rural areas the company started sales, servicing & spare parts outlets in small towns & villages across India. The most successful product is Splendor in rural market and the company kept on focusing on upgrading and models so then they later came up with splendor Plus & Splendor NXG which provided extra features and the customers are satisfied. The company conducts SKITS, DRAMAS to give some special message and attract the crowd & advertise its products.

Maruti Suzuki India Limited

Ghar Ghar Me Maruti: Mera Sapna Meri Maruti is targeted at the customer segment consisting of village panchayat members who are highly influential and respected in rural areas and nearby towns. This scheme increased Maruti sales by 16600 units.

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