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Government agencies like 
 Ñ nsurance
Regulatory And Development Agency and
 Ñ
ational Council for applied Economic
Research) define
- DRural as villages with a population <5000 with
75% male population engaged in agriculture
etcµ.



- t 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.
- t is a two-way marketing process wherein the
transactions can be:
* V
   : t involves the selling of products and
services by urban marketers in rural areas. These
include: Pesticides, FMCG Products, Consumer durables,
etc.
o    V
: Here, a rural producer Ñinvolved in
agriculture) sells his produce in urban market. This may
not be direct. There generally are middlemen, agencies,
government co-operatives, etc who sell fruits, vegetables,
grains, pulses and others.
†     : These include selling of agricultural tools,
cattle, carts and others to another village in its proximity.
 ›
 


Rural people do not buy Branded consumption

brands accounts for 80% sale
for FMCG
Rural consumers buy They seek value for
cheap products money

Rural market is a t is heterogeneous

homogeneous market
Ô  






°


 






  

-Marketing rural
products in rural
and urban areas
-Agricultural inputs
in rural areas
-DAgricultural
* Phase OneÑ Pre 1960·s) marketingµ
-Farming methods
were primitive and
mechanisation was
low
-Markets
unorganised
 -Green Revolution
-Companies like
Mahindra and
o Phase Two Ñ 1960s to 1990s) Mahindra, Sri Ram
Fertilisers and
FFCO emerge
-Rural products
were also marketed
through agencies
-Demand for
consumables and
durables rise
-Companies find
† Phase ThreeÑ 1990s to Present)
growth in urban
markets stagnating
or falling
X 
 Ô

X









1. ncrease in population and hence increase in

demand.
2. A marked increase in the rural income due to
agrarian prosperity.
3. Standard of living is also increasing in rural
areas.
4. Large inflow of investment for rural
development programmer from government
and other sources.
5. ncreased contact of rural people with their
urban counterparts due to development of
transport and wide communication network.
6. ncrease in literacy and educational level and
resultant inclination to sophisticated lives by the
rural folks.
7. nflow of foreign remittances and foreign made
goods into rural areas.
8. Change in the land tenure systems causing a
structural change in the ownership patterns and
consequent changes in the buying behaviour.
9. Rural markets are laggards in picking up new
products. This will help the companies to phase
their marketing efforts. This will also help to sell
inventories of products out dated in urban
markets.
 







*
 V
 ›




- Rural people can use the two-way communication through on ² line
service for crop information, purchases of Agri-inputs, consumer
durable and sale of rural produce online at reasonable price. Farm
information online marketing easily accessible in rural areas because of
spread of telecommunication facilities all over ndia. Agricultural
information can get through the nternet if each village has small
information office.

o 
›




V 


V
V V

 
- Most of the dealers have direct touch with the local farmers; these
farmers need awareness about pests, decease, fertilizers, seeds,
technology and recent developments. For this information, farmers
mostly depend on local dealers. For development of rural farmers the
government may consider effective channel and keep information at
dealers, for farmer education hang notice board and also train the
dealer recent changes and developments in agriculture.
-
ational Chain Stores: large number of stores set up in different rural
areas throughout the country by the same organization for marketing
its products. Thus national chain stores can serve large number of
customers in rural area.
† 

  


 
- Cost benefit can be achieved through development of information
technology at the doorsteps of villagers; most of the rural farmers
need price information of agri-produce and inputs. f the
information is available farmers can take quick decision where to
sell their produce, if the price matches with local market farmer no
need to go near by the city and waste of money & time it means
farmers can enrich their financial strength.

ë   
  
V


- Supply plays major role in price of the rural produce, most of the
farmers grow crops in particular seasons not through out the year,
it causes oversupply in the market and drastic price cut in the
agricultural produce.
ow the information technology has been
improving if the rural people enable to access the rural
communication, farmers awareness can be created about crops and
forecasting of future demand, market taste. Farmers can equates
their produce to demand and supply, they can create farmers
driven market rather than supply driven market. f the need based
production system developed not only prices but also storage cost
can be saved. t is possible now a days the concept of global village.
‰ ›

  


- Agricultural extension is continuously going through renewal
process where the focus includes a whole range of dimensions
varying from institutional arrangements, privatization,
decentralization, partnership, efficiency and participation. The
most important change that influences the extension system is
market forces. There is a need for the present extension system
to think of the market driven approach, which would cater the
demands of farmers.

| 
  V

- ndia is the second largest producer of fruits and vegetables in
the world with an annual production of more than 110 million
tones of fruit and vegetable only 1.3 percent of the output is
processed by the organized sector commercially, the reason
higher consumption in fresh form. However, as the packaging,
transportation and processing capacities increase, the market for
processed fruits and vegetables is projected to grow at the rate of
about 20 % per annum. 100 % export oriented units ÑEOU) and
Joint venture units required improving the processing industry.
·


›
  
 ›
  
V



- There is a need to promote direct agricultural marketing
model through retail outlets of farmer's co-operatives in
urban areas. The direct link between producers and
consumers would work in two ways: one, by enabling
farmers to take advantage of the high price and secondly,
by putting downward pressure on the retail prices.

â V

 


- Rural produce, raw fruits and vegetable, processing
goods, have the potential market in Asian, Europe and
western countries. Particularly soudhy countries have
commendable potential for ndian rural produce.

m 


 ›


- Under this concept, both the supply of inputs and
servicing of inputs are undertaken at the same point or
by the same company.
 






*    There are not enough opportunities for

education in rural areas. The literacy level is as low Ñ36%)
when compared to all- ndia average of 52%
o   Demand for goods in rural markets
depends upon agricultural situation, as agriculture is the
main source of income. Agriculture to a large extent
depends upon monsoon and, therefore, the demand or
buying capacity is not stable or regular.
†
  Many rural areas are not connected by
rail transport. Kacha roads become unserviceable during
the monsoon and interior villages get isolated.
ë  
 An effective distribution system requires
village-level shopkeeper, Mandal/ Taluka- level
wholesaler or preferred dealer, distributor or stockiest at
district level and company-owned depot or consignment
distribution at state level. The presence of too many tiers
in the distribution system increases the cost of
distribution.
‰   
 Facilities such as telephone,
fax and telegram are rather poor in rural areas.
|
  Life in rural areas is still governed by
customs and traditions and people do not easily adapt
new practices. For example, even rich and educated
class of farmers does not wear jeans or branded shoes.
·   Rural consumers are cautious in
buying and decisions are slow and delayed. They like to
give a trial and only after being personally satisfied, do
they buy the product.
⠛    Television has made a great
impact and large audience has been exposed to this
medium. Radio reaches large population in rural areas
at a relatively low cost. However, reach of formal media
is low in rural households; therefore, the market has to
undertake specific sales promotion activities in rural
areas like participating in Melas or fairs
ÔÔ 



1. nfrastructure is improving rapidly - n 50 years only,

40% villages have been connected by road, in next 10
years another 30% would be connected.
2. More than 90% villages are electrified, though only 44%
rural homes have electric connections.
3. Rural telephone density has gone up by 300% in the last
10 years; every 1000+ pop is connected by STD.
4. Social indicators have improved a lot between 1981 and
2001 -
5.
umber of "pucca" houses doubled from 22% to 41%
and "kuccha" houses halved Ñ41% to 23%).
6. Percentage of BPL families declined from 46% to 27%.
7. Rural literacy level improved from 36% to 59%.
8. Low penetration rates in rural areas, so there are many
marketing opportunities .
a

 

*
  

Product for rural market must be built or

modified to suit the lifestyle and needs of the
rural consumers .
Product Strategies followed in Rural market:
-
ew/Modified Product.
- Utility Oriented Product
- Avoiding Sophisticated Packaging
- Application of value Engineering.
- Small unit packaging

Often ,they identify FMCG by three things:

1. Color,
2. Visuals of animals and birds and
3.
umbers.
- So a 555, 777, hara goli, pila hathi, lal saboon, saphed
dantmanjan are the kind of terms with which they
identify brands. Hence it is very important for us to
understand that a lot needs to be done in terms of
communications, media, marketing and branding. The
following have to be kept in mind while the marketer
makes a decision on the product.
1. The product for the rural markets has to be simple, easy
to use and provide after sales service or maintenance.
2. The product has to be packed for low price and
convenient usage.
3. The pack has to be easily understood by the rural
consumer. The information on the pack is preferred in
local language communicating the functional benefit of
the product.
o 
A rural customer is price sensitive and shops for
value.
- This is mainly because of his lower income
levels than his urban counterparts. Hence the
marketer has to find ways of making the
product affordable to the rural consumer.
- 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.
- The product packaging and presentation offers
scope for keeping the price low.
- Reusable packs or refills are also preferred and
are seen as value addition.
 Pricing Strategies followed in Rural
market:
- Large Volume ²low merging
- Overall Efficiency And passing on
benefits to consumers.
- low cost/ value for money product
- Low volume-low price.
Ô


 
- Godrej recently introduced three brands of
Cinthol, Fair Glow and Godrej in 50-gm packs,
priced at Rs 4-5 meant specifically for Madhya
Pradesh, Bihar and Uttar Pradesh
- Hindustan Lever, among the first M
Cs to
realise the potential of ndia's rural market, has
launched a variant of its largest selling soap
brand, Lifebuoy at Rs 2 for 50 gm
- Coca-Cola has also introduced Sunfill, a
powdered soft-drink concentrate. The instant
and ready-to-mix Sunfill is available in a single-
serve sachet of 25 gm priced at Rs 2 and
mutiserve sachet of 200 gm priced at Rs 15.
†  

A village as a place for promotion, distribution,
and consumption is very different from town or
city.
Place Strategy suggested for Rural market:
- Segmentation
- Coverage of villages with 2,000 and above
population
- Distribution up to feeder markets/ Mandi
towns.
- Direct Contact with rural Retail
 



Distribution of products is one of the
biggest challenges of rural marketing.
There are CWC ÑCentral Warehousing
Corporation) and SWCS ÑState
Warehousing Corporations) set up in
rural areas to store and distribute
products. A three tier rural warehousing
setup exists:
CWC/SWCs
Co-operatives
Rural Godowns
There are some problems of rural distribution:
- Transportation has not been fully developed.
- Lack of proper channels of communication like telephone,
postal services, and so on pose a lot of problem to
marketer to service the retailer as it is difficult to the
retailers to place order for goods.
- Storage of goods in rural areas is also a problem for the
marketers.
- Multiple tiers push up the costs and channel
management is a major problem for marketers due to
lot of middlemen in the process.
- Availability of suitable dealers
- Poor viability of rural outlets
- There are a lot of private shops in the rural sector.
 
- Promotion aspect always creates a
challenge in rural markets because of the
fact that village have thin population
density and are widely spread over large
remote areas.
Various promotional tools/Media Vehicles for rural ndia
are: -
- Television
- Radio
- Print media
- Cinema
- Hoarding/Wall Painting
- Folk media
- Cultural shows and events
- Video van/ Raths
- Haats
- Melas
- Mandis

     


- C C BA
K customized their rural
ATMs, according to the rural needs.
- C C rural ATMS are battery operated so
that power failure is not issue.
- BP energy sells smoke less, biomass run
stoves ÑOorja) for rural markets, priced
attractively Rs.675.
- Bank of ndia introduced DBhumiheenµ
credit cards for providing credit card
facilities to landless farmers.

     


-
oika has developed affordable Mobile
phones for rural markets with unique
features such as local language
capabilities, present time/ call limits etc.
- Philip has developed a TV ¶ Vardaan· for
rural markets. This TV work on the
voltage 90-270 volts.
- Philips has introduced ¶ Free Power radio·.
This radio do not require power and
battery also. it run on simple winding of
level provided in the set. The price of this
attractive set is Rs. 995.

     


- LG developed CTV called· CinePlus· was launched
in rural markets price Rs.5000
- Hyundai increases focus on Rural ndia. ts new
promotional scheme titled - ¶Ghar Ghar Ki
Pehchaan'. n this first of its kind initiative,
Hyundai Motor would extend special schemes for
government employees in rural areas and
members of Gram Panchayats on the purchase of
the Hyundai Santro
- Launched on May 1, the ¶Ghar Ghar Ki Pehchaan'
scheme will continue till July 31, 2008. Through
this special rural scheme Hyundai Motor ndia
plans to touch base with at least 58 per cent of
ndian villages with a population of 500 or more
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