TAPPING INDIAN RURAL

MARKET
 INTRODUCTION
According to innovation focused marketers Rural
is defined as a group of people who are
traditional in outlook, rooted in the land and who
resist change.

Most companies in the FMCG and agri-input sector

would define rural as a place with a population of
up to 20,000.Durable goods companies would
consider any town with a population of below
50,000 as a rural market.
EVOLUTION
PHASE 1(before mid 1960 s)
Agricultural marketing.
Marketing of rural products in rural and urban
areas.
Unorganized market.

PHASE 2(mid 1960s to mid 1990s)

The Green Revolution.
Marketing of agricultural inputs.
Village markets flourished and indigenous products
hit the urban markets on a large scale.
PHASE 3(after mid 1990s)
Indias industrial sector gained strength.
Emergence of new service sector.
Steady growth in the rural market for household
consumables and durables.

PHASE 4(around 2015)

Global rural marketing will emerge.
GO RURAL DECISION
URBAN
Saturation in urban markets.
PUSH Fierce competition in urban markets.
FACTORS

RURAL PULL Rising affordability & lifestyle changes.

FACTORS Growing acceptance & awareness.

RURAL Uneven development, fragmented

markets.
INHIBITING Heterogenity in lifestyle, low disposable
FACTORS income, competition from MNCs.
PRODUCT STRATEGY
ACCEPTABILITY is the Key factor

The customer should think that they can buy the product
by putting an extra money on that.

They should feel that the product is designed as per

their needs.

They should think that the product gives some value to

them.

The customer should feel the comfort with the product

and there should not be any hesitation to go for it.
PRODUCT STRATEGY
Sampoorna TV
LG Electronics re-jigged the TV to appeal to local
needs. It spent Rs. 21 lakhs to develop a set that
would have on-screen displays in the languages of
Hindi, Tamil & Bengali.
Tata Ace
PRICING STRATEGY
AFFORDABILITY is the Key factor

Affordability here does not mean that cheaper products

should me made and marketed.

The designing of the product should match the needs of the

customer.

The Customer should not think that they cannot buy it, that
means it should be in their buying capacity.

The income earned in rural markets is from different ways ,

so by keeping this in mind most of the companies should
design the product in such a way that it reaches the
customer.
PRICING STRATEGY
 DISTRIBUTION STRATEGY
Distribution central to the success of rural marketing
strategy
Making decisions on logistics and channel design much
easier now
Major challenge finding and reaching out to consumers in
rural hinterland
DISTRIBUTION PRACTICES
FMCG SECTOR
Three pillar distribution strategy of Colgate-Palmolive
- Promotions through haats and melas
- Focus on satisfaction of everyone involved in
distribution
- Automated information system: easy to track market
data on real-time basis

Emami
- Introduced new super-stockists networks for rural
coverage
- Van Operations Model

Godrej
- GCPL Rural initiated a project Dharti
 DIRECT MARKETING
Company sales force
Van marketing
Stalls at haats, melas and fairs
Network marketing
Internet marketing ( e.g. echoupal)
 INDIRECT MARKETING
Syndicated distribution
Channel levels

Traditional Channel Members:

Wholesalers
Retailers

Tata Teas Gaon Chalo

Initiative in UP
 RURAL RETAILING
Includes FMCG goods, durables, agricultural inputs and
vehicles such as tractors.
The rural retail market forms around 40 percent of the total
size of retail market in India, worth USD 280 billion
(ASSOCHAM reports)
Present Scenario not very encouraging
- Only 10000 of 0.6 million villages in India can access
organised retail services
 RURAL MALLS
Huge malls that act as one-stop shop

These have the following facilities:

Mandi, Home needs storage, Medical/Veterinary services,
Sources of entertainment
PROMOTION
STRATEGY
 PROMOTIONAL MIX
1. DIRECT COMMUNICATION:
. Example: In 2001, Colgate-Palmolive
launched Operation Jagruti .

1. INTERACTIVE MEDIA:
. Example: Marico Industries launched
a van campaign
. Brooke Bond Lipton India Ltd (BBLIL)
markets its rural brands through
magic shows and skits.
3. PUBLICITY / PR:
. EXAMPLES: HUL micro-marketing
programme in India tapped women self-
help groups .
. Nokia work together with micro-finance
organizations to sell mobile phones.

4. PERSONAL SELLING:
. Many LIC agents and ACC representatives
make house-to-house visits and provide
information about their products
5. ADVERTISING:
. EXAMPLES: Philips India used to have parades
of people dressed as electric bulbs or
batteries.
. HUL used a giant cut-out of Lifebuoy during a
boat race in Kerala that is held as a part of
Onam festival.

6. SALES PROMOTION:
. OFFERS: buy-more-to-save-more concepts .
. SAMPLING: Distribution of samples achieves
both brand awareness and conviction.
. DEMONSTRATIONS/EXPERIENTIAL
MARKETING: touch and feel experience.
Unilevers Lifebuoy soap used a germ-glow
box as a part of a demo kit.
COMMUNICATION MEDIA:

COMMUNICATI
ON MEDIA

NON-PERSONAL PERSONALIZED
MEDIA MEDIA

EVENTS OUTDOOR
MASS MEDIA ATMOSPHERICS
MEDIA
EMPOWERING RURAL PEOPLE THROUGH
availability (of products),

awareness (education about the benefits) and

empowerment of rural consumers (by inviting them to be a part

of the value creation process).
 Push marketing ; rural context

No
modification
Urban Rural
product market
Distribution
focus

attract channel members and motivate them

reach the remotest part
sales promotion schemes are trader oriented
eg: rural retail outlet (competition for shelf space)
PULL MARKETING; RURAL CONTEXT:

modified

Urban Rural
product market

Communication
and customization
focus

brand building
use media, melas and haats as the focal approach to target rural
consumers, their special needs/wants/ special focus on tastes and
preferences
consumer oriented promotional schemes
persuasion ,word of mouth
PULL UP MARKETING
Co-creation (involves collaboration with various organizations)-
Dialogue, Access, Risk assessment and Transparency.
Purchasing power enhancement through Microfinance, Micro
enterprise,
Empowerment (Eliminating the long chain)
local sourcing of raw materials and adoption of indigenous technology

Marketing Empowerment
firm focus

Co-creation focus

Urban markets Rural marketing

Initiatives:

Bharati Airtel -The mobile services have covered around three

lakh villages, planned expansion to 6lakh villages over the next
two to three years.
ICICI Bank has formulated a comprehensive channel strategy for
rural markets with multiple channels catering to all segments of
the rural population. Involving ICICI kiosk within the range of 10
km.
HUL uses street performers - magicians, singers, dancers and
actors-adjusting their scripts and acts based on rural market.
As a result ,public awareness of Breeze 2-in-1, its low-priced
soap, increased from 22 to 30 percent.
PULL UP STRATEGY INITIATIVE

ITC e-choupal
direct marketing
enriching the farmer with knowledge
role of the Choupal Sanchalak
already benefiting over 3.5 million farmers. By 2012,the e-Choupal network
planned to cover over 100,000 villages, representing 1/6th of rural India

Rural Innovations Network (RIN):

Rural Innovations Network (RIN) works to tap this inventiveness of
farmers and entrepreneurs

Eg:
water crisis in Sadalga village, located in Karnatakas drove sugarcane
farmer Anna Saheb to develop a low-cost drip irrigation system. resulting
in 50 percent saving on water and 10 percent increase in yield.
RURAL MARKET INITIATIVES BY
HINDUSTAN UNILEVER LIMITED
HUL linked the companys core
business with rural
development
Mutually beneficial to both the
society at large and for the
company..
Rural sales contribute around
40% to HULs overall sales
HUL has been proactively
engaged in rural development
since 1976
RURAL DISTRIBUTION MODEL OF HUL
PRICING AND PACKAGING
Rural consumers are price sensitive
Sachets and small packs of premium products.
Price doesnt exceed Rs.5 per sachet.
Lux at Rs.5,
Lifebuoy at Rs.2,
Surf Excel sachet at Rs.1.50,
Pond's Talc at Rs.5,
Pepsodent toothpaste at Rs. 5,
Fair & Lovely Skin Cream at Rs.5,
Pond's Cold Cream at Rs.5,
Brooke Bond Taaza tea at Rs.5.
PROJECT SHAKTI
A BUSINESS INITIATIVE
WITH SOCIAL BENEFITS
PROJECT SHAKTI
Project Shakti was launched in the
year 2001 in the Nalgonda district
situated in Andhra Pradesh
OBJECTIVE : To create income-
generating capabilities for
underprivileged rural women, by
providing a sustainable micro
enterprise opportunity, and to
improve rural living standards through
health and hygiene awareness.
4,00,000 VILLAGES
HOW IT WORKS
Villages with a population of about 20003000
are selected
Personnel from HUL approach SHGs
Selection of the Shakti Amma
HUL vouches for Shakti Ammas with banks for
credit
One Shakti entrepreneur

is appointed for one village &

Villages that are about 2 kilometres
apart from her village
(satellite villages ).
 FUTURE ASPECT
There is huge potential and definitely there is
lot of money in rural India
Better strategic attention to these unique
demands will assure greater chances of
product's success in the rural market.
According to market research firm Nielsen,
rural FMCG market will touch to $100 b by
2025
Food category will continue to drive bulk of
business in rural market