11

Rural Marketing
Presented Click to edit Master subtitle style

22

According to the census of India :-

village with clear surveyed boundaries not having a municipality, corporation or board, with density of population not more than 400sq.km and with at least 75 per cent of the male working population engaged in agriculture and allied activities would called as rural

FMCG and Consumer durable companies,

33

Indian Rural Market

The rural economy contributes nearly half of the countrys GDP (ETIG 2002-03) which is mainly agriculture driven and monsoon dependant. More than 50 percent of the sales FMCG and Durable companies come from the rural areas.

India lives in villages, close to 72 percent of Indian population lives in rural areas. In the country we have 6.36 lakh villages out of which only 13 percent have population above 2000.

44

Source: Census Of India Number of Villages Percentage of total Population 2001

villages 17.9 24.3 25 19.7 10.8 1.8 0.5 100 Less than 200 200-499 500-999 1000-1999 2000-4999 5000-9999 10000 & above Total 114267 155123 159400 125758 69135 11618 3064 636365

.
55

According to this definition,

There are 6,38,000 villages in the country. Of these, only 0.5 cent has a population above 10,000 2 per cent have population between 5,000 and 10,000. Around 70 per cent has a population less than 1000

Defining Rural India

Organisation NSSO ( Census)
l l

Definition
l

Limitations rural not defined

Population density < 400 / Sq Km

75 percent of the male working population is engaged in agriculture

lNo

Municipal corporation / board

Planning Commission

Towns upto 15,000 population are considered rural

Town characteristics not defined

Contd
LG Electronics All places other than the 7 metros Only clarifies what are the cities NABARD All locations with a population upto 10, 000 considered rural Village & town characteristics not defined

Sahara

Commercial establishments located Population characteristics in areas servicing less than 1000 unknown population

Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S ( 2007)

Defining Rural Marketing

National Commission on Agriculture Decisions to produce saleable farm commodities involving all the aspects of the market system or structure, both functional and institutional, based on technical & economic considerations and includes the pre & post harvest operations. NGOs Marketing products produced in rural areas to urban areas Marketing products produced in rural areas in rural markets Corporate Rural Marketing Definition Function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organisational goals.

Phases in Rural Marketing

Sr. No 1 Time Frame Phase One( Pre 1960s) Key Events & Trends
lMarketing

rural products in rural and urban areas

lAgricultural lFarming lMarkets

inputs in rural areas marketing

lAgricultural

methods were primitive and mechanisation was low unorganised

Contd
2 Phase Two ( 1960s to 1990s)
lGreen

Revolution

lCompanies

like Mahindra and Mahindra, Sri Ram Fertilisers and IFFCO emerge
lRural

products were also marketed through agencies like KVIC 3 Phase Three( 1990s to Present)
lDemand

for consumables and durables rise

lCompanies

find growth in urban markets stagnating or falling

Scope of Rural Marketing

Keenly debated topic Definitions based on organisational/ institutional vision, mission & goals

Need for a comprehensive and modular understanding

Rural Marketing is a work in progress

Domain of Rural Marketing

Rur al Fro m Rur al Urb an
T o

Urb an

Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988

Scope of Rural Marketing

Domain of Rural Marketing Participants Dimensions of the transaction Products/ services Modalities Norms Outcomes

Rural to Rural

Rural to Urban

Urban to Rural

Changes in Rural India

Diverse change levers in rural India The pull of the cities & towns migration and its side effects

Effect of government programmes Civil society interventions Natural & manmade disasters

Transitions In Rural India

Food Grain Crops On land activities Farm Activities

Non food, cash crops

Livestock & fisheries

Manufacturing & services

Rural Employment Patterns( Male)

Sector Year 1987 ( % share in employment) Year -2004 ( % share in employment) 67 8 7 7 Agriculture Transport & Communication Trade & Hotels Construction 75 2 5 4

Manufacturing

Source: NSSO data, Mckinsey Global Institute Study, 2004-05

Rural India Population Trends

1971 Total Population (in million) Rural Population (in million) As a proportion of total population Decadal Variation 548.2 1981 683.3 1991 848.3 2001 1026.9

524.0

628.8

741.6

76.7

74.3

72.2

19.8 Source: Census 2001

16.7

15.2

Contd

The joint family system is being replaced by the nuclear family system

The occupational pattern shows a predominance of cultivators and wage earners

Cultivators( 40.86 %) and Wage Earners( 35.28 %) according to NCAER studies (2002)

Rural Settlement & Habitation Trends

Key findings from 2001 census Population density 253/ sq kilometer and total number of villages is 638, 588

Villages having less than 500 population are falling Villages having 2000 + population most prosperous What are the implications of these trends?

Contd

Size of villages/ habitations are changing Role & influence of towns is changing Social interaction is a mix of rural and urban Lets look at some key trends in detail

Rural Income Trends

Annual Income ( at 199899 prices) <= 35,000 35,001- 70,000 70,001 1,05,000 1,05,001- 1,40,000 > 1,40,000 Income Class 1989-90( % Households) 1998-99 ( % Households) Low Low Middle Middle Upper Middle High 67.3 23.9 7.1 1.2 0.5 47.9 34.8 10.4 3.9 3.0

Source: National Council for

Rural Marketing- Schools of Thought

Determinist School Activist School What is the right approach? Dependent on level of market development, stage in the PLC and access to resources

Amul & ITC prominent examples

Strategic Issues & Directions in Rural Marketing

Evolutionary Vs revolutionary changes in rural markets

Role of state & market forces ICT based interventions Partnership innovations Developmental role of rural marketing

24 24

Demographic details of Indian Rural Markets:

25 25

About 285 million live in urban India whereas 742 million reside in rural areas, constituting 72% of India's population resides in its 6, 38,000 villages. The number of middle income and high income households in rural Indian is expected to grow from 46 million to 59

Rural Initiators
26 26

This is where the fortunes of many of Indian biggest corporations are likely to be shaped. Among those that have made some headway are
Coca-cola, Britannia Colgate Palmolive

HUL,

LG Electronics, Standard life Philips ITC

The foreign-invested telecom companies.

Gone are the days when a rural consumer went to a nearby city

27 27

Today, rural markets are critical for every marketer-be it for a branded shampoo (or) an automobile. Time was when marketers thought van campaigns, cinema commercials and a few wall paintings would suffice to entice rural folks under their folds

The 4 Ps Of Marketing: A relook from rural Perspective

28 28

The choice of strategy depend upon the organization ability to meet the consumer need effectively.

This require delivering value to the consumer by developing suitable product at a price they are willing to 4 4 As ( Challenges) pay &Ps (Tool) at a place they can purchase.
Product Price Place Promotion Acceptability Affordability Availability Awareness

1. Availability
29 29

The first challenge is to ensure the availability of product or services.

India: 6,38,000 Village are spread over 3.3 Mn Sq. Km Around 70 % of Indian live in rural areas but finding them is not easy. Challenge to send product to far flung village on a regular basis

30 30

Over the year Indias largest FMCG Co., HUL has built a strong distribution system that help its brand to reach the interior of rural market.

Coca cola, which consider rural India as a future growth driver, has evolved a hub & spoke distribution model to reach village.

LG define all cities & town other than 7 metro cities as rural & semi urban market. To tap these unexplored market LG

Affordability
31 31

The second challenge is to ensure affordability of the product or service. With low disposable income, product need to be affordable to rural consumers, most of them whom are daily wages earner.

HUL, the first MNC to realize the potential of Indian rural market has launched a variant of its largest selling soap brand, lifebuoy, at Rs 2 for 50 gm.

Coca cola has addressed affordability issue by

Acceptability
32 32

The third challenge is to gain acceptability for the product or its service.

LG in 1998 introduced a customized TV for rural market & christened it Sampoorna. It was a runaway hit selling 100,000 set in very first year.

Because of lack of electricity & absence of refrigerator in rural area coca cola provide low-cost ice boxes, i.e tin boxes for new outlets & thermocole boxes for seasonal outlets

Awareness
33 33

41% of rural household have access to TV building awareness is another challenge.

HLL relies heavily on its own co. organized media.

Godrej which is trying to push its soap brand into the interior areas, use radio to reach the local people in their

34 34

Size & Structure Rural Marketing Environment Problem in Rural Marketing Rural Marketing Strategy

35 35

India Rural Market Environment

Consciousness of fact is not knowing it; if it were the fish would know more of the sea than the geographers & the naturalists:- George Barnard Shaw.

Age & Stages of Life cycle

36 36

The purchase of product/services & their form & nature is influenced by age & life cycle stage of consumer. This give direction to the estimation of demand, segmentation, Age Life Cycle & product mix decision. Urban Rural targeting of market, Stage
Below 12 13 -19 20 40 Child Teenage Young VG, chocolate, health drinks Cell phone, motorcycle, internet Car, pc/ computer, branded clothes Toy , ice candy, daliya Bicycle, TV , cinema

40 -60 Above 60

Middle Aged Old

Motorcycle, LPG, telephone, unbranded clothes, local liquor, haat Luxury car, credit card, Chaupal, playing cards, clothing, alcohol pilgrimage Club, theatre, parks

37 37

Demographic Environment:

With the growing in population it doesnt mean growing market. For Marketer age-group shape the environment 48% of rural population is below 20%

Distribution of Population by Age- Group

Age - Group 0-4 5-14 15-19 20-34 35-54 55+ Rural 11.5 25.7 9.5 23.1 19.7 10.5 100 Source: Census Of India, 2001 Urban 8.9 21.8 10.6 26.8 22.5 9.4 100

Occupational Pattern:39 39

Typically one can find in rural find that the principal occupation is farming, animal husbandry, poultry, trading etc. one can also find primary health workers & teachers in rural areas
Occupation Proportion of Rural Population % 50 Cultivators Agriculture Labours Trading & Craftsmanship 27 10

Non Agricultural Labourer ( Livestock, 10 Forstary, fishing, hunting, plantation etc) Salary Earner 3

Rural India Population Trends

1971 Total Population (in million) Rural Population (in million) As a proportion of total population Decadal Variation 548.2 1981 683.3 1991 848.3 2001 1026.9

524.0

628.8

741.6

76.7

74.3

72.2

19.8 Source: Census 2001

16.7

15.2

Education & Level Of Demand

41 41

Approx 60 % of Population lives Below Middle Income bracket Literacy rate in rural India has risen 23 % over the last 20 Urban year { in 1981 itRural 36 % , in 2001 it was 59 %. was
31.7 16.9 18.4 3.5 18 29.5 22.9 16.3 29.6 13.2

Education Level Below Primary

Primary But Below Middle Middle But Below Matriculation Matriculation But Below Graduate Graduate & Above

Source: Census Of India, 2001

Family Structure
42 42

Rural household has grown 26 Million during the last decade. Annual size of rural family has decreased due to movement of more families from joint to nuclear Structure of Individualized Joint family is emerging Rural Urban
19.5 60.2 17.1 3.2 15.2 65.5 15.4 3.9

New Concept Type Of Household

Joint Nuclear Without Elder Nuclear With Elder Others

Source: India Readership Survey, 2005

Rural Housing Pattern

The Type of house in rural area are a very strong indicator of economic growth.

Over the last 20 year the trend in house has changed dramatically, from less semi-pucca or kuccha to more House type 1981 1991 2001 permanent Pucca types.
Pucca Semi- Pucca Kuccha Total 22 37 41 100 31 36 33 100 41 36 23 100

Source: census Of India 2001

Socio- Economic Concept

The word Rural connotes an environment characterized

by low investment , low literacy. Low density of population, low infrastructure facilities, low income & low saving &

Population

Source: Census Of India 2001

Number of Villages 114267 155123 159400 125758 69135 11618 3064 636365 17.9 24.3 25 19.7 10.8 1.8 0.5 100

Percentage of total villages

Less than 200 200-499 500-999 1000-1999 2000-4999 5000-9999 10000 & above Total

4545

Economic Environment

Over the Last 10 year there has been considerable shift in the distribution of household from lower income to higher income group. The higher income class has grown 6 Times
Annual Income ( Rs) at 1998-99 <=35000 35001-70000 70001-105000 105001 140000 >140000 Total Source: NCAER Income Class Low Low Middle Middle Upper Middle High 1989-90( % of HH) 67.3 23.9 7.1 1.2 0.5 100 1998-99 (% of HH) 47.9 34.8 10.4 3.9 3 100

Social & Cultural Environment

The society & polity across the country varies between region & sub-region & also have different religion caste & linguistic Groups. There are no strict boundaries for identifying cultural differentials, common socio cultural behavior has been mapped as distinct Socio Cultural Religion.

48 48

Marketer use SCR as a yardstick for market segmentation & Targeting.

Caste System: Indian Society had a definite scheme of social gradation.

Village Community: Village has been in many way self sufficient & autonomous. Agricultural Surplus Contributed to the sustenance of Economic Infrastructure, the caste based occupation & trade collectively contributed to self sufficiency

Village had a council of elder ( Panchayat) which decide dispute between villager & discussed matter of Common interest

Political Environment

Historically, the panchayat & Village Pradhan had been representing rural India. The salient feature of Panchayati Raj under 73rd Amendment are:

To hold panchayat election regularly five year To provide reservation of seat for SC, ST & Women ( not less than 33%) To appoint a SFC( State Finance Commission) to make recommendation as regards the finance power of panchayats.

Rural Development Programme

The ministry of development is engaged in implementing a no. of scheme, which aim at enabling rural people to improve their living standards. Some of the programme listed below are:

Pradhan Mantari Gram Sadak yojna Pradhan mantri Gramodaya Yojana ( Rural Drinking Water) Indiara Niwas Yojana Panchayat Raj Jawahar Gram Samridhi yojana

Infrastructure Facilities Of Rural India

The link between infrastructure & development is not a once for all affair. It is a continues process; & progress in development has to be preceded, accompanied & followed by progress in infrastructure, if we are to fulfill our declared objectives of a self accelerating process of economic development Dr. V.K.R.V. Rao

Agriculture production not only need water, seeds, & fertilizer but also require power, credit, transport facilities, marketing facilities etc.

All these facilities & services constitute collectively the infrastructure of economy & the development & expansion of these facilities are an essential precondition for creating agricultural production in our country.

Road transport is of particular advantage to farmer. Good

Occupation & Income

54 54

In the rural sector, a range of goods & services beyond the very basic one are bought by a consumer, influenced by income & occupation of individual. A farmer has to allow variation in income during pre harvest & post harvest period. The shop keeper behave differently as he is in a position to adjust his income according to demand in village by adjusting inventory & credit, without these affecting purchase of goods. On the other hand salary earner has fixed & assured income

55 55

Rural Occupation & Consumption Pattern

Rural (HH %) Occupation Category Owner Farmer Shopkeeper Salary Earner Agri Worker Unskilled non agri worker Artisian 34 8 13 20 17 6 Contribution to TV ownership (%) 33 14 31 6 9 6 Contribution to 2 Wheeler ownership (%) 33 16 39 3 4 4 1 Contribution to refrigerator (%) 31 20 40 2 5 2 1

Rest (Leased Farmer, 2 2 Livestock) Source: NCEAR data analyse by bijapurkar & murthy 1999

Irrigation
56 56

Rural income is mostly depended on the rain god, if the rainfall is adequate & weather condition are favorable, rural people will prosper, as it happened in Punjab, Haryana, otherwise they commit suicide as it is happening in AP & in north Karnataka. Studies by the NCEAR provide evidence of the increased income of rural households

Rural Electrification:57 57

In the table a marked feature is the increasing use of electricity in agriculture. With programmed of rural electrification, the demand for lift irrigation & energisation of pump-set has increased during recent year( from 10 30 1970-71 1996-97 %)
Industry Agriculture Railway Traction Public Lighting Domestic Use total 68 10 3 10 9 100 38 30 2 10 20 100

58 58

Rural Development Programme

Pradhan Mantari Gram Sadak yojna mantri Gramodaya Yojana ( Rural Drinking Water) Niwas Yojana Raj Gram Samridhi yojana

Pradhan Indira

Panchayat Jawahar Desert

Development Programme

S.no 1

Company Bajaj Electrical

Products Home Appliances

What they are doing Pricing basic model closer to products made by small scale sector Planning to penetrate 1.4 lakh new village Creating Brand awareness by taking bowling alley to village Test marketing urban model in rural Punjab New Campaign for White Batteries Setting up a rural strategy task force to hike per capita usage Modifying product to meet different need in different region

59 59

2 3 4 5 6

Colgate Palmolive Dabur India Electrolux Ever-ready India Godrej soap

Dental cream Chwayanprash Refrigerator Batteries Toilet Soap

Hero Cycle

Bi-cycle

S. No Company 8) Hindustan Lever

Products Personal Product, detergent Dairy Whitener Cellular Services

What They are doing Door- door selling to penetrate village with population under 2000 Selling low unit price package Setting of cell phone PCO in village with a population of less than 10000 Selling high priced TV with a regional language to display Started dedicate distribution channel for low end appliances Selling Low Priced Sachet Using CD Rom to plan van route

60 60

9) 10)

JK Dairy Koshika Telecom

11) 12) 13) 14)

LG Maharaja Marico Industries Nippo Batteries

Colour TV Home Appliances Hair Oil Batteries

FMCG
61 61

The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian economy. This sector touches every aspect of human life. The FMCG producers now realize that there is a lot of opportunity for them to enter into the rural market. The sector is excited about the rural population whose incomes are rising and the lifestyles are changing.

62 62

Over 70% of sales is made to middle class households today and over 50% of the middle class is in rural India.

The sector is excited about a burgeoning rural population whose incomes are rising and which is willing to spend on goods designed to improve lifestyle.

Also with a near saturation and cut throat competition in urban India, many producers of FMCGs are driven to chalk out bold new strategies for targeting the rural consumers in a big way.

63 63

The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during the last fifty odd years.

The FMCG sector is a cornerstone of the Indian economy. This sector touches every aspect of human life.

Indian FMCG market has been divided for a long time between the organized sector and the unorganized sector.

64 64

Unlike the US market for FMCG which is dominated by a handful of global players, Indias Rs. 460 billion FMCG market remains highly fragmented with roughly half the market going to unbranded , unpackaged home made

65 65

MART, the specialist rural marketing and rural development consultancy, has found that 53 per cent of FMCG sales and 59 per cent of consumer durable sales lie in the rural areas.

Of two million BSNL mobile connections, 50 per cent went to small towns and villages; of 20 million Rediffmail subscriptions, 60 per cent came from small towns; so did half the transactions on Rediff's shopping site.

OLD Data
66 66

According to a study by Chennai-based Francis Kanoi Marketing Planning Services Pvt Ltd, the rural market for FMCG is worth Rs.65,000 crore, for durables Rs 5000 crore, for tractors and agri-inputs Rs.45,000 crore and two- and four-wheelers, Rs.8000 crore. In total, a whopping Rs.123,000 crore. This could be doubled if corporate understood the rural buying behaviour and got their distribution and pricing right

(Students Need To find Out NEW Data)

Rural Marketing-Challenges and Opportunities

67 67

The Indian rural market with its vast size and demand base offers great opportunities to marketers.

Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India.

68 68

Actually the market bristles with variety of problems. The main problems in rural marketing are:

Physical Distribution Channel Management Promotion and Marketing Communication

69 69

One more example, which can be quoted in this regard, is of HLL. A year back HLL started 'Operation Bharat' to tap the rural markets. Under this operation it passed out low priced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to twenty million households.

70 70

Rural Trends in India

71 71

According to Mr.D.Shiva Kumar, Business Head (Hair), personal products division, Hindustan Lever Limited, the money available to spend on FMCG (Fast Moving Consumer Goods) products by urban India is Rs.49,500 crores as against is Rs.63,500 crores in rural India.

As per NCAER projections, the number of middle and high-income households in rural India is expected to grow

72 72

Apart from increasing the geographical width of their product distribution, the focus of corporate should be on the introduction of brands and develop strategies specific to rural consumers. Britannia industries launched Tiger Biscuits especially for the rural market.

Some Facts
73 73

* Estimated annual size of the rural market * FMCG Rs.90,000 Crore * Durables Rs.(?) * Agri-inputs Rs. 65,000 Crore * Two/Four wheelers (?)

Why Go Rural
74 74

On account of low penetration rate in rural market there lies a vast untapped potential for the marketers.

This can be supported by the fact that rural market accounts for only

31% of the colour TVs, 10% of Washing Machines, 18% of fridges, 38% of tooth paste, 24% of shampoos and 28% of face creams.

Impulse to go Rural
75 75

1. Large Population:The rural Indian population is large and its growth rate is also high. Over 70% Indias one billion plus population lives in around 627,000 villages in rural areas. This simply shows the great potentiality rural India has to bring the much needed volumes and help the FMCG companies to bank upon the volume driven growth.

Table 1. Percentage distribution of households and income

76 76
Area Rural Urban All - India Households 72.4 27.6 100 Population 75.6 25.4 100

77 77

2. Rising Rural Prosperity:India is now seeing a dramatic shift towards prosperity in rural households. To drive home the potential of rural India just consider some of these impressive facts about the rural sector.

As per the National Council for Applied Economic Research (NCAER) study, there are as many middle income and above households in the rural areas as there are in the urban areas..

Table 2. Distribution of people incomewise

78 78
Income Group 2001 02 Total High Middle Low Total 1.48 69.18 32.29 102.95 Rural 0.41 4.83 29.52 74.46 % 27.7 64.8 91.42 72.6 2006 - 07 Total 2.96 90.25 20.41 114.52 Rural No. 0.7 59.85 95.8 80.96 % 23.6 66.3 95.7 70.7

79 79

3. Growth in Market:The purchasing power in rural India is on steady rise and it has resulted in the growth of the rural market. The market has been growing at 3-4% per annum adding more than one million new consumers every year and now accounts for close to 50% of volume consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than urban markets.

Table 4. Rural FMCG market Projections

80 80
Category Growth % 2001 02 Total Rural Share 6021 793 1441 15731 2846 2006 Projected Total 18086 4237 9376 35295 6648 Rural Share 11291 2292 4140 25806 4108 62.4 54.1 45.1 73.4 62.6 Rural Market Share

Toilet Soap Baby Telcom Powder Tooth Paste Cooking oil Vanaspati

13. 4 23.65 23.95 10.91 7.63

9645 1445 3198 20946 4549

81 81

* Low Penetration rates in rural markets facilitates opportunities Durables Urban Rural Total (%of rural House hold ) Color TV

82 82

* Infrastructure is improving thick and fast * More than 40% villages are already connected by roads and in another 10 years or so 30% more will be added. * Under the Rural Electrification more than 90% villages are electrified. * Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD.

83 83

* Social Indicators have improved immensely during last 10 years or so * Number of concrete made houses increased from 22 to 44% . * Percentage of Below the Poverty Line People decreased from 46 to 27%.

84 84

* For Promotion and Distribution Marketers can make effective use of following infrastructure as well * Post Offices 1,38,000 * Haats

Tapping the Opportunities

85 85

Marketing Strategy:

Comprehend the psyche of rural consumers. It may require intensive personal selling effort as villagers require more personal contacts to convince.. Firms should refrain from designing goods for the urban markets and subsequently pushing them to rural markets.

86 86

Marketing Strategy:

To effectively tap the rural markets a brand must associate with their culture and personality. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriads rituals, festivals, melas etc

87 87

Distribution strategy

A one of the ways could be using company delivery vans which can serve two purposes

it can take the products to the customers in every corner of the market and it also enables the firm to establish direct contact with them and thereby facilitates sales promotion.

88 88

Distribution strategy

Syndicated distribution. Haats and Melas could also be a great platform to display merchandise. Also, every region consisting of several villages is generally served by one satellite town termed as Mandi where people prefer to go to buy their durable commodities.

89 89

Designing right promotion strategy is the crux of the problem. Whether to utilize universal approach to reach both rural and urban of differently tailored approach considering rural and urban differences is the first question to be answered

Promotion Strategy

90 90

Promotion Strategy

Design aspects include message content, structure, format and source. The message can be disseminated with the right choice of media-mix (personal and non-personal) aided by sales promotion and direct marketing efforts

91 91

Problem In Rural Marketing

Underdeveloped people and underdeveloped markets Lack of proper physical communication facilities Inadequate Media coverage for rural communication Multi language and Dialects Market organization & staff Traditional mind not to react new ideas. Agricultural income mostly invested in gold ornaments and weddings. Low rural literature.

Thank You
92 92

Mail me you Query/Suggestion at

profshashank@gmail.com

India
U an rb 28%

R ural 72%

India
State U ts D istricts List of T sils/T ah alukas/C Blocks D V illage s U rban A gglom eration (U s) s A T n ow s T otal Pop ulation M ale F ale em Pop lation variation (1991 u -2001) R ural U rban Pup olation Sex R atio Literacy T otal (% ) M (% ale ) F ale (% em ) C han in Literacy R ge ate (199 1-20 01) 65.38 75.96 54.28 13.75 28 7 593 5464 638365 384 5161 1027015247 531277078 495738169 21.34 741660293 285354954 933 72.20% 27.80% 51.70% 48.30%

Definitions

Rural and Urban Areas

The conceptual unit for urban areas is a 'town', whereas for the rural areas it is a 'village.' The classification of an area as an urban unit in Census of India 2001 is based on the following definition:

All places declared by the state government

The ground realities!

The Ruraledit Master subtitle style Click to Consumer

Why rural?

Click to edit Master subtitle style

Huge business opportunities

Rural consumers constitute about 72% of Indias population

No single-national competitor

Marketers have, so far, concentrated on the top-end consumer Therefore, this segment is largely dominated by proxy products and local/regional/duplicate/fake brands

Who is the rural consumer?

Click to edit Master subtitle style

Demographics

Largely working as farmers or agricultural workers Have limited education, may well be illiterate
This

leads to linear and simple thinking,

Shopping behaviour

Buy small quantities - more frequently

Unit price is critical, particularly as many of them are daily-wage earners

Look for acceptable performance/ functional benefits / paisa vasool paradigm (good in relation to current product) at a reasonable price Transcreation of packaging critical Flash price of pack wherever feasible In their own way, good at arriving at a cost per dose (or cost per month) equation: even if not expressed mathematically

More sensitive and alert to value

Shopping behaviour

Build personal acquaintance with neighbourhood retailer

Often

trust the retailer who does influence brand choice get credit from the retailer

Frequently

Shopping behaviour

Word-of-mouth, very important and credible Mass driven

Buy

products that are perceived to be popular: the bandwagon effect

Try to minimise their risk: tend to be stronger creatures of habit

Collectivism
(As opposed to individualistic)

Adhere to prevailing social norms: the community they live in is very important and their behaviour is usually consistent with the communitys shared beliefs and norms Enjoy social gatherings: womens associations, celebrations, events, etc Spend a lot of their free time chatting

Family and the housewifes role

Housewives manage the household and decide on its needs

Largely But

determine brand choice for low-cost household products in rural India, males play that role too

Males are still dominant; largely a patriarchal society

Family and the housewifes role

Housewife is often frustrated in her own ambitions, but wishes to see these aspirations fulfilled vicariously through her children, daughter included
Aims

for children to achieve academic excellence

Housewife craves for an identity outside the home

Other beliefs

Strong belief in fate and luck, religion and God Active participation in religious activities Cleanliness is next to Godliness

Socially acceptable aspirations for the housewife

When she can stand up to her mother-inlaw without being disrespectful When the children excel in their studies/school activities When the son sends money from the city to the village When she exercises her own choice in

Rural India
Myths toReality Click & edit Master subtitle style

Myth

Rural consumers aren't worth bothering about since they buy loose, unbranded products rather than the branded variety. In branded they buy only inexpensive brands.

Reality

The ORG study shows a high preference for branded products. In 18 categories, branded consumption accounts for 80% of sales. These include: toilet soaps, washing powders, analgesics, safety razor blades, toothpastes, shampoos, batteries, rubs and balms, skin creams, toothpowders, toothbrushes, antiseptic

Reality

Penetration of premium products is being reported, even to the lowest socioeconomic classification. Although the percentages may be very small, given the large universe, the actual figures may be quite significant.

Myth

One family, one brand - there's one brand for the whole household.

Reality

In many categories, multiple-brand usage is a fact. Rural households are not completely homogeneous.

Unchanged characteristics of rural consumers

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India

Continued existence of an oppressive and rigid caste system, particularly in rural areas
rural consumer normally hails from the lower castes, and therefore any depiction of him/her on an equal footing with the higher castes would be seen as aspirational
The

Key considerations while targeting rural consumers?

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Targeting rural consumers

Highlight multiple uses from the same product liquid for cuts, gargle for bad throat, washing clothes as a disinfectant , dandruff etc
Jet Dettol

mosquito coil for mosquito repellent and room freshner

Advertise small packs with a low unit price

Tiger Cavin Chota

biscuits tikki pack Kare - Chik shampoo Pepsi 5 rupiya mein

Why pay more?

Nirma

Super Jab vohi manghe damo vali quality kam dam mein mile to koi vo

kuye le

Targeting rural consumers

Using price itself as an indicator of value has some risks attached to it; if used indiscriminately, it can:
Down-grade Permanently

the perceived quality of the product

position the product at that price point making it difficult to effect price increases in the future

The rural consumer is sensitive about being portrayed as poor

Dont Play

do it!

on their aspirations instead

Fantasy, Song & Dance, Idiom of the cinema detergent powder employs song and dance, up-market models and a vibrant jingle
Navrattan Nirma

hair oil - Govinda in a dance sequence with Chandramukhi

Targeting rural consumers

Use opinion leaders

If

they are credible, they work

detergent powder employs a doctor to endorse the brand doctor

Colgate

Sunlight

dental cream endorsed by a - Anti Leprosy

Sarpanch

Targeting rural consumers

Exploit the warmth of emotion among family members

Alpha luggage - man wants to take back the wife when he goes to town to work again
VIP

Consider leveraging the appeal of mass sports

Lifebuoy

soap has consistently used mass

Targeting rural consumers

Make promotions relevant and aspirational

promotions that promise the possibility of winning a dream prize such as a house, gold ornaments etc alternatively look at instant redemptions
Upbeat

Use radio effectively

Radio

often has a much higher reach than

Targeting rural consumers

Pack
is sometimes the only communication medium to low literacy levels, particularly in India, recognition of the brand name is mainly through its distinct logo and visual pack properties
For Due Pack

this very reason, it is usually

Targeting rural consumers

As the rural consumer tend to come to the shop frequently, POS materials act as a constant reminder of brand presence and advantage
Branding POS

must be done through colour, brand name and symbols: strong visuals are important

material should be tinplates, plastic, sun-resistant inks and reusable: calendars, mirrors, stands

Durable:

Functional

Space-efficient Decorative

Location is key: need to be placed strategically

Billboards, wall paintings, banners

Special events which are entertaining are very popular

How to select rural media

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Rural Communication Planning

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Framework for selection and evaluation of relevant rural advertising options for a given communication task

The framework

Outline media possibilities for various marketing situations Construct an evaluation system for various rural options Modify it for relevant state as per regional variations Outline execution pointers Outline costs

Marketing Situations

Build penetration

launch in newer popstrata

Test market
Test

acceptability of new product/mix

Ideally, this is the requirement.

Situation Increase penetration Test Market Pressure Test Promotion Maintenance Reach High High Low High Low Low Frequency Low High High Low

But
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Reach or Frequency?

Depends on launch period in villages If recently launched, <3 years, compromise reach to provide additional visibility in key markets If established, compromise on

Reach & Frequency options

Learningsedit Master subtitle style Click to from projects executed by

Increase penetration
High Reach
Van Based Advertising Melas Direct to Home Folklore groups Exhibitions/Created events

Low Reach High Frequency Low Frequency

Test marketing
High Reach
Jeep based advertising Wall Painting Bus Stand Bus Panels Haats Hoardings Postal branding

Low Reach High Frequency Low Frequency

Pressure Test
High Reach
Co-operative Notice Board Shop Front Painting Tin Plating House Dealer Boards Village Boards Well Tiles Calendars/Lables

Low Reach

High Frequency

Low Frequency

Promotions
High Reach
Van Based Advertising Melas Direct to Home Folklore groups Exhibitions/Created events

Low Reach High Frequency Low Frequency

Maintenance
High Reach
Tin Plating Trees/Shops Leaflets Posters Banners Streamers/Danglers

Low Reach High Frequency Low Frequency

Rural media usage grid

High Reach
Jeep based advertising Wall Painting Bus Stand Bus Panels Haats Hoardings Postal branding Co-operative Notice Board Shop Front Painting Tin Plating House Dealer Boards Village Boards Well Tiles Calendars/Lables Van Based Advertising Melas Direct to Home Folklore groups Exhibitions/Created events

Low Reach

Tin Plating Trees/Shops Leaflets Posters Banners Streamers/Danglers

High Frequency

Low Frequency

Thank you!
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