Project Report On

Rural Marketing At
Parle

Presented To:- Prof. K Prof. Kavita Shukla

Presented From:- Brijesh Kumar Singh

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The Overview…

In our country over 70% of the total population live in villages. There are states like
U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies form 80 to 90 per cent.
Agriculture and agriculture related activities contribute to about 75% of the income in rural
areas. Over 6, 31,307 villages, 700 million people a myriad of languages many traditions and
a rich culture. A vibrant land with a long History. Rural Indian people are known as much for
their warmth as their diversity. The real “BHARAT”.

“EXPLORE THE RURAL MARKETS

DO NOT EXPLOIT THEM”.

INDIAN ECONOMY

RURAL SECTOR URBAN SECTOR

NON-
AGRICULTURAL
AGRICULTURAL

--CROP CULTIVATION --INDUSTRY

--ANIMAL HUSBANDRY --BUSINESS
--DAIRYING --SERVICES
--FISHERIES
--POULTRY
--FORESTRY

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Till recently, the focus of marketers in India was the urban consumer and by large no
specific efforts were made to reach the rural markets. But now it is felt with the tempo of
development accelerating in rural India, coupled with increase in purchasing power, because
of scientific agriculture, the changing life style and consumption pattern of villagers with
increase in education, social mobility, improved means of transportation and its various
satellite channels have exposed rural India to the outside world and hence their outlook to life
has changed. Because of all these factors, rural India is attracting more and more marketers.

Increase in competition, saturated urban markets, more and more new products
demanding urban customers, made the companies to think about new potential markets. Thus,
Indian rural markets have caught the attention to many companies, advertisers and
multinational companies. According to a recent survey conducted by National Council for
Applied Economic Research (NCAER), the purchasing power of the rural people has
increased due to increase in productivity and better price commanded by the agricultural
products. By and large this rise in purchasing power remains unexploited and with growing
reach of the television, it is now quite easy for the marketers to capture these markets.

Rural marketing has become the latest mantra of most corporates. Companies like
Hindustan Lever, Colgate, Palmolive, Britannia, and even Multinational Companies (MNCs)
like Pepsi, Coca Cola, L.G., Philips, and Cavin Kare are all eyeing rural to capture the large
Indian Market.

Coming to the frame work of Rural Marketing broadly involves reaching the rural
customer, understanding their needs and wants, supply goods and services to meet their
requirements, carrying out after sales service that leads to customer satisfaction and repeat
purchase/ sales.

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Concept of Rural Marketing…

Rural marketing is a process of developing, pricing, promoting, distributing rural-

specific goods and services leading to exchange between urban and rural markets which
specifies consumer demand and also achieves organizational objectives.

Rural marketing involves a two-way marketing process, however, the prevailing flow
of goods and services from rural to rural areas cannot be undervalued.

Since demands’ of urban and rural folks are different, companies should manufacture
products to suit the rural demand rather than dump urban products on rural consumers.

The process should be able to straddle the attitudinal and socio-economic disparity
between the urban and rural consumers.

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Rural Marketing in India…

A thorough understanding of the rural markets has become an important aspect of

marketing in the Indian marketing
environment today. This attraction
towards the rural markets is
primarily due to the colossal size of
the varied demands of the 230
million rural people. In fact, the
rural markets are expanding in
India at such a rapid pace that they
have overtaken the growth in urban
markets. This rate of growth of the
rural market segment is however not the only factor that has driven marketing managers to go
rural. The other compelling factor is the fact that the urban markets are becoming
increasingly complex, competitive and saturated.

Further, the vast untapped potential of the rural markets is growing at a rapid pace.
The policies of the government largely favour rural development programmes. This is clearly
highlighted by the fact that the outlay for rural development has risen from Rs 14000 crores
in the 7th plan to Rs 30000 crores in the 8th plan period. These figures also prove that the
rural market is emerging stronger with a gradual increase in disposable income of the rural
folk. In addition, better procurement prices fixed for the various crops and better yields due to
many research programmes have also contributed to the strengthening of the rural markets.
Thus, with the rural markets bulging in both size and volume, any marketing manager will be
missing a great potential opportunity if he does not go rural.

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Distinctiveness of Rural Markets…

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. Our nation is classified in around 450 districts, and
approximately 630000 villages, which can be sorted in different parameters such as literacy
levels, accessibility, income levels, penetration, distances from nearest towns, etc. The
features of Indian rural markets are:

 Major income from agriculture: Nearly 60 % of the rural income is from

agriculture. Hence rural prosperity is tied with agricultural prosperity.
 Low standard of living: The consumer in the village area do have a low standard of
living because of low literacy, low per capita income, social backwardness, low
savings, etc.
 Traditional Outlook: The rural consumer values old customs and tradition. They do
not prefer changes.
 Diverse socio-economic backwardness: Rural consumers have diverse socio-
economic backwardness. This is different in different parts of the country.
 Infrastructure Facilities: The Infrastructure Facilities like roads, warehouses,
communication system, and financial facilities are inadequate in rural areas. Hence
physical distribution becomes costly due to inadequate Infrastructure facilities.

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Problems Related To Rural Marketing…

Although the rural market does offer a vast untapped potential, it should also be
recognized that it is not that easy to operate in rural market because of several problems.
Rural marketing is thus a time consuming affair and requires considerable investments in
terms of evolving appropriate strategies with a view to tackle the problems.

The major problems faced are:

 Underdeveloped People and Underdeveloped Markets : The number of people

below poverty line has not decreased in any
appreciable manner. Thus underdeveloped
people and consequently underdeveloped market
by and large characterize the rural markets. Vast
majorities of the rural people are tradition bound,
fatalistic and believe in old customs, traditions,
habits, taboos and practices.

 Lack of Proper Physical Communication Facilities : Nearly fifty percent of the

villages in the country do not have all weather roads.
Physical communication of these villages is highly
expensive. Even today most villages in the eastern
parts of the country are inaccessible during the
monsoon.

 Media for Rural Communication : Among the mass media at some point of time in
the late 50's and 60's radio was considered to be a potential medium for

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communication to the rural people. Another mass media is television and cinemas.
Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres,
which is far less when compared to the number of villages.

 Dispersed Market: Rural areas are scattered and it is next to impossible to ensure the
availability of a brand all over the country. Seven Indian states account for 76% of the
country’s rural retail outlets, the total number of which is placed at around 3.7
million. Advertising in such a highly heterogeneous market, which is widely spread,
is very expensive.

 Many Languages and Dialects: The number of

languages and dialects vary widely from state to
state, region to region and probably from district to
district. The messages have to be delivered in the
local languages and dialects. Even though the
number of recognized languages is only 16, the
dialects are estimated to be around 850.

 Low Per Capita Income: Even though about 33-35% of gross domestic product is
generated in the rural areas it is shared by 74% of the population. Hence the per capita
incomes are low compared to the urban areas.

 Low Levels of Literacy: - The literacy rate is low in rural areas as compared to urban
areas. This again leads to problem of communication for promotion purposes. Print
medium becomes ineffective and to an extent irrelevant in rural areas since its reach is
poor and so is the level of literacy.

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 Prevalence of spurious brands and seasonal demand: - For any branded product
there are a multitude of ‘local variants’, which are cheaper, and, therefore, more
desirable to villagers.

 Different way of thinking: - There is a vast difference in the lifestyles of the people.
The kind of choices of brands that an urban customer enjoys is different from the
choices available to the rural customer. The rural customer usually has 2 or 3 brands
to choose from whereas the urban one has multiple choices.

Constraints/Hurdles Faced…

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With the change in the economic policies of the government, many companies have
ventured into the rural markets. However, their efforts have not been sufficiently rewarded.

The various constraints can be enumerated as:-

 Lack of Infrastructure: The basic facilities like roads, transport facilities, electricity,
telecommunication, etc are missing in most of the rural areas of India.

 Market Planning and Awareness: Lack of awareness and understanding of

consumer behavior in rural markets, creates problems in formulating strategies and
plans.

 Designing the Products: There is a drastic difference in the utility value in the urban
and rural market. A product with a particular design and pattern may not find
acceptance in rural markets, but may be a success in urban areas.

 Inadequacy of Channels of Distribution : Due to comparatively less focus on rural

markets – the exploitation of the rural market to the fullest extent has not taken place.

 Communication: With the given level of literacy and awareness of rural population,
communication constitutes a major hurdle in exploiting rural markets. Various factors
like language, religion, superstitions, rigidity etc make communication in rural
markets more difficult.

 Right to Decision: In most rural families, it is the head of the family who decides
what to buy and when to buy. Consequently his purchase decisions are influenced by
his own personality traits, rather than the aptitude and perception of the actual
consumers of these goods.

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 Pricing of the Product: Price factor is more crucial in rural areas than in urban
markets. The consumer must feel satisfied and benefited after paying the price for a
particular product.

Mass media…

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The past two decades have seen a dramatic expansion of exposure to mass media in
rural areas. Since these are, almost, by definition urban media at present is an
overwhelmingly urban portrayal of life and values, their impact on attitudes and behavior has
been profound.

 Radio is the medium with the widest coverage. Studies have recently shown high
levels of exposure to radio broadcasting both within urban and rural areas, whether or
not listeners actually own a set. Many people listen to other people's radios or hear
them in public places. Surveys indicate that in rural areas more than a one third of the
married women of reproductive age have listened to a radio within the last week.

 Television, video and films expose viewers to a common window on styles of life
and behaviour, an impact increased by the
supranational reach of the media. Television is
extremely popular where it is available.
Television increasingly exposes viewers to a wide
range of national, regional and international
viewpoints. Rural exposure to television has been
lower by far than radio.

The mass media brings change wherever they go; but change does not have to be
random. Successful media campaigns have changed attitudes and behaviour in a variety
of areas, from basic literacy to health care and family planning.

 But Advertising to rural consumers continues to be a hit and miss affair. At best, it is
an exercise where communicators grapple with issues of language, regional and religious
affiliations and local sensitivities. Most often finding the right mix that will have a pan-
Indian rural appeal is the greatest challenge for advertisers. But more often than not,
marketers throw in the towel going in for simplistic solutions: such as going in for a mere
transliteration of advertising copy. The result: advertising that is rooted in urban
sensitivities and do not touch the hearts and minds of the rural consumer.

Various other reasons making the mass media ineffective are: -

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1. The Indian society is a complex social system with different castes, classes, creeds
and tribes. The high rate of illiteracy added to the inadequacy of mass media
impedes reach almost to 80% of India's population who reside in village.

2. Mass media reaches only 57% of the rural population. Generating awareness,
then, means utilizing targeted, unconventional media including ambient media.

3. Mass media is too glamorous, interpersonal and unreliable in contrast with the
familiar performance of traditional artist whom the villager could not only see and
hear, but even touch.

4. The communication and the design of marketing mix needs to be different, as

what attracts one need not attract the other as well. So again, even if the media
reaches a rural consumer, there might not be an impact as he may fail to connect
to it due to his different lifestyles. Moreover rural marketing is usually related
with products having low profit margins and high sales volumes and hence it is
more important to emphasize the availability of the product to all potential
consumers than an overdose of expensive inefficient mass-media strategies.

To understand the way the rural markets work - we need to go to these markets and
spend time there in understanding them. We live in surroundings where the things are
completely different from what the rural customer experiences. And we can't understand him
unless we go and spend time there. Things like what time does he get up, etc need to be
studied and customer needs to be understood. Also these studies need to be passed on so
others can also benefit from the ground works done and enhance them further.

We need in depth studies of the market, the medium, the message and the rural
customer in center of all these to understand the rural markets completely.

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The winning combination will be a good product with consistent quality and
availability. Once you earn the villagers' loyalty (and they are known for their brand loyalty),
it will be difficult for competitors to take away your customers.

 RETAILERS: -For the rural customer

the choices available are limited. So the
retailer plays a very big role in the
purchase decision. Data on rural
consumer buying behavior indicates that
the rural retailer influences 35% of
purchase occasions. The rural customer
goes to the same shop always to buy his
things. And there is a very strong
bonding in terms of trust between the
two. The buying behavior is also such that the customer doesn't ask for the things by
brand but like - "paanch rupey waali chaye dena". Now it is on the retailer to push
whatever brand he wants to push as they can influence the buyer very easily and very
strongly on the preferences. Therefore, sheer product availability can determine brand
choice, volumes and market share. Thus distribution is the key factor for the success of
rural marketing.

This includes, maintaining favorable trade relations, providing innovative incentives

to retailers and organizing demand generation activities among a host of other things.

In rural areas, the place where consumers prefer to shop is very important, because it
has been found that they buy their requirements from the same shop. This high shop loyalty is
accentuated by the "khata" system, which is widely practiced. Hence, if the product is not
available at the place where the consumer shops, he would buy some other available brand.

 RURAL FOLK MEDIA: -As a general

rule, rural marketing involves more

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intensive personal selling efforts compared to urban marketing. Marketers need to

understand the psyche of the rural consumers and then act accordingly. To effectively tap
the rural market a brand must associate it with the same things the rural folks do.
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 myriad rituals, celebrations,
festivals, melas and other activities where they assemble, can do this.

In the Indian rural marketing context, perhaps linguistics could provide a new
approach to tackling communication issues and arriving at a better understanding of rural
consumers. Also, the manner in which symbols and icons are used, which provides insights
and clues into the mindsets of rural audiences, can be deployed to grab their attention.

Though television and radio fare better then print, the best way to kick start sales are
events. Where the company meets and interacts with the audience, talks to them in their own
idioms and tells them what this product offers. Marketers should think up games and events,
which would attract the attention of the villagers from all professions uniformly. This would
require local level goods creation and social negotiation skills.

The best choice comes from weekly bazaars. With varying populations, one shop or
few shops cannot really cater to all the needs of the consumers. Thus, it makes sense to have
weekly outlets that caters to the needs of the consumers in these regions. Frugal though the
rural consumer is success from these weekly outlets is that much more pertinent.

What attracts her is the freshness of the produce, buying in the bulk for a week and
the bargaining power. These markets (haats and shandies) have high potential that corporates
are now waking up to. The scope that these markets offer to distribution is something that has
to be seriously considered. Distribution is clearly the key to rural marketing.

 TRADITIONAL MEDIA can be used to reach

these people in the marketing of new concept.
The traditional media with its effective reach,
powerful input and personalized communication
system will help in realizing the goal. Besides

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this when the advertisement is couched in entertainment it goes down easily with the
villager.

The traditional media like folk/street plays, wall signs/shop paintings, van
campaign/Haat events (weekly fairs), melas, home-to-home contacts and product
demonstrations can be effectively used for this purpose.

Strategies…

The rural markets are expected to witness a different kind of a shift. As companies
aggressively compete to get a higher share of the rural pie, competitive advantage will lie
with those who have a higher reach.

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Marketing according to a leading management theorist Peter Druker can be put in this
way “There will be always, one can assume, be need for some selling. But the aim of
marketing is to make selling superfluous. The aim of marketing is to know and understand
the customer so well that the product or service fits him and sell itself. Ideally, marketing
should result in a customer who is ready to buy. All that should be needed then is to make the
product or service available."

Through this we feel that the gist of mktg. in rural & urban is the same. It is nothing
but teasing the minds of people, their desires, needs, expectations & playing with their
psychology. But the market for a product may vary in rural & urban area and the marketing
strategies to market the product is also different in urban and rural area.

The strategies should revolve around what attracts the rural customer to a product. For
example –

 Packaging:

Rural customers are usually daily wage earners and they don’t have monthly incomes
like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced
packs that they can afford given their kind of income streams.

Packaging and package sizes are increasingly playing a vital role in the decision
making process of the rural buyers. Certain products like detergents and paste are bought in
large quantities, whereas shampoos, toilet soaps, eatables are bought in smaller pack sizes.
The reasoning behind this is that the products that are common to family members are bought
in large pack sizes, whereas individual-use products are preferred in smaller packs.

A successful example is that of HLL’s project ‘Operation Bharat’. HLL supplied

hampers for Rs. 5, 10, 15 and 20, each of which had a Clinic shampoo bottle, a tube each of

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Pepsodent, Fair & Lovely, and Pond’s Dreamflower Talc, in different sizes and
combinations. The idea behind this strategy was to have a product for hair care, dental care,
skin care and body care.

 Value for money:

Rural consumers are quite brand conscious. A rural consumer wants value for money
minus the frills. Zany advertising and marketing would be a no-go for this sector. A high
price tag usually deters the rural consumer from purchase. To counter this, companies need to
resort to low unit price strategy to expand sales.

A good example of this would be the sachet revolution and combi-packs. According
to a survey, 95 percent of total shampoo sales in rural India are by sachets. Colgate has
followed the very successful sachet route by introducing the toothpowders in 10g sachets of
Rs. 1.50 each and the toothpaste with Super Shakti in 15g packs of Rs. 3 each. The entrant
can also offer attractive exchange and money back schemes for its middle and lower
segments.

 Convenience:

An example is what Colgate did to its tooth powder packaging. Firstly – it made
sachets as was required by their income streams. Secondly - since many households don’t
have proper bathrooms and only have a window or things like that to keep such things -- it
was wise to cap this sachet for convenience of storage while use. So this is what they did.

 Demonstration:

Direct Contact is a face-to-face relationship with people individually and with groups
such as the Panchayat and other village groups. Such contact helps in arousing the villager's
interest in their own problem and motivating them towards self-development.

Demonstration may be:

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A. Method demonstration
B. Results demonstration

The five steps to make any demonstration effective are:

1. Information about people

2. Objectives to be accomplished

3. Demonstration plan & Execution of the plan

4. Evaluation of the demonstration

5. Reconsideration after evaluation.

In result demonstration, with help of audio -visual media can add value. Asian Paints
launched Utsav range by painting Mukhiya's house or Post office to demonstrate that paint
don’t peel off.

 Promotion and marketing communication:

While planning promotional strategies in rural markets, marketers must be very

careful in choosing the vehicle to be used for communication. They must remember that only
16% of the rural population has access to a vernacular newspaper. Although television is
undoubtedly a powerful medium, the audiovisuals must be planned to convey a right message
to the rural folk.

The marketers must try and rely on the rich, traditional media forms like folk dances,
puppet shows, etc with which the rural consumers are familiar and comfortable, for high
impact product campaigns.

Thus, a radical change in attitudes of marketers towards the vibrant and burgeoning
rural markets is called for, so they can successfully impress on the 230 million rural
consumers spread over approximately six hundred thousand villages in rural India.

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 Wall Paintings

Wall Paintings are an effective and economical medium for advertising in rural areas.
They are silent unlike traditional theatre .A
speech or film comes to an end, but wall
painting stays as long as the weather allows
it to. Rural household’s shopkeepers and
panchayats do not except any payment, for
their wall to be painted with product
messages.

The greatest advantage of the medium is the power of the picture completed with its
local touch. The images used have a strong emotional association with the surrounding, a feat
impossible for even a moving visual medium like television, which must use general image to
cater to greatest number of viewers.

Such a promotion has led to an interesting outcome. For both, washing and for taking
bath - one requires water. Now for rural markets there are three sources of water - wells, hand
pumps and ponds.

For the first in the history of advertising - these are being branded. Special stickers
were put on the hand pumps, the walls of the wells are lined with advertising tiles and
tinplates are put on all the trees surrounding the ponds. The idea is to advertise not only at the
point of purchase but also at the time of consumption.

So the customer could also see the advertising when he was bathing or washing. Now,
the customers who bought these brands got a sense of satisfaction by seeing their choice
being advertised in these places while a question was put in the minds of the customers who
had bought other brands. So this was an innovative strategy that worked quite well.

Example of successful use of wall painting is by Nirma, which makes extensive use of
wall paintings, also a soil conditioner called Terracare uses images of Sita, Luv and Kush to
attract the rural consumer.

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 Haats & Melas

The countries oldest tradition holds the key to

rural penetration. The average daily sale at a
Haat is about Rs.2.25 Lacs while the annual
sales at melas amount to Rs.3, 500 crore.

In rural India, annual melas organised

with a religious or festive significance are quite
popular and provide a very good platform for
distribution. Rural markets come alive at these
melas and people visit them to make several purchases.

According to the Indian Market Research Bureau, around 8000 such melas are held in
rural India every year.

Rural markets have the practice of fixing specific days in a week as Market Days
when exchange of goods and services are carried out. This is another potential low cost
distribution channel available to the marketers. Haats serve a good opportunity for promotion
after brand building has been done at Mela.

Also, one satellite town where people prefer to go to buy their durable commodities
generally serves every region consisting of several villages. If marketing managers use these
feeder towns they will easily be able to cover a large section of the rural population. Melas
are organized after harvest season, so the villager has enough money, which he will be ready
to spend. Demonstration at Haat is essential to convert customers at haats since their attitude
is far more utilitarian than that of visitors to a fair.

Dealing with this sector needs innovative and localized approaches: Watch major
Titan Industries plans to aggressively approach the rural and semi-urban markets in India by
creating a separate image for its low-priced Sonata brand. The company has opened its first
showroom in Bhopal and nine more showrooms are to be opened across the country. The
marketing strategy being followed is to keep the prices of the watches at an affordable range
of Rs 295-1,195 and create a niche market for the brand.

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They will not open showrooms in metros such as Mumbai or Delhi for Sonata brand.
The target segment would be the Rs 295-700 customers. They plan to open showrooms at
locations, which rural customers visit frequently such as bus terminals, railway stations
among others. Also, there would be a range of 300 models from smart plastics and all
weather steel to all gold and all-occasion gold and leather. Titan will be looking for the
marriage season, which will start from April-June where the rural customers become actual
buyers.

Another innovative idea is that of Sanjay Lalbhai's Ruf and Tuf jeans is targeted at
the rural market. And they are leaving nothing to chance. Arvind Mills is teaching tailors in
the villages how to stitch the jeans.

 Mobile Traders:

Even though they have been used before for redistribution,

Cycle Salesman could possibly emerge as one of the most cost-
effective ways of selling directly to rural consumers. The lack of
motor able roads and high distribution costs are not a hindrance
any more. Mobile traders score over the conventional wholesale
channel on both counts of cost and reach. They travel either on foot
or on cycles. That means transportation costs are virtually non-existent. Besides these traders
can target smaller villages, which conventional distribution channels often do not touch?

The mobile traders can play a crucial role in buying decision. Most rural women are
loath to visit retail outlets. Mobile traders therefore are a smart way of reaching women in
their home environment. The women rely on these mobile traders to sell them goods in the
security of their home.

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Rural India is a marketer’s dream given its tremendous potential and increasing
money power. The formula of success for companies entails a complete shift in marketing
and advertising strategies.

"To be successful in the rural market, remember- there is no unity in diversity, but
act local while thinking global."

If Distribution is the Key, then what’s going wrong???

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Unfortunately, most marketers of today try to extend marketing plans that they use in
urban areas to the rural markets and face, on many occasions failure. They should adopt a
strategy that appeals individually to the rural audience and formulate separate annual plans
and sales targets for the rural segment.

Changes must be made in the marketing mix elements such as price, place, product
and promotion. Corporate marketers should refrain from designing goods for the urban
markets and subsequently pushing them in the rural areas. The unique consumption patterns,
tastes, and needs of the rural consumers should be analyzed at the product planning stage so
that they match the needs of the rural people.

 Distribution costs and non-availability of retail outlets are major problems

faced by the marketers. But if one takes a closer look at the characteristic features of the
rural market, it will be clear that distribution in fact, is no problem at all. For most
companies wanting to enter the rural markets, distribution poses a serious problem.

 The problems of physical distribution and channel management adversely

affect the service as well as the cost aspect. The existent market structure consists of
primary rural market and retail sales outlet. The structure involves stock points in feeder
towns to service these retail outlets at the village levels. But it becomes difficult
maintaining the required service level in the delivery of the product at retail level.

Solution…

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DELIVERY VANS:-

The way to overcome the problem would be by using company delivery vans, which
can serve two purposes- it can take the products to the customers in every nook and corner of
the market and it also enables the firm to establish direct contact with them and thereby
facilitate sales promotion. However, only the bigwigs can adopt this channel. The companies
with relatively fewer resources can go in for syndicated distribution where a tie-up between
non-competitive marketers can be established to facilitate distribution.

An example of the successful strategy is that of Tata Cellular in rural Andhra

Pradesh. Inspite of low advertisement budget, they created a hybrid distribution channel, with
four tiers direct, retail, showroom and franchise outlets that were designed for easy reach.
Specific road shows to rope in different segments such as transporters, traders and PSU
employees were organized.

Mr Harish Bijoor, CEO, Zip Telecom, says, "Rural markets need to be approached
differently and cannot be understood as extensions of urban markets. Most marketers err on
this count. Advertising that believes in translating the English version into the vernacular
cannot capture the rural heart. For rural markets, one needs to think in the local language,
remote with the local feel and mood and visualize advertising that is rich in this context."

To attract rural buyer’s advertisers need to use simple films showing how a product is
to be used. Rajdoot Paints issues such functional advertising very effectively.

Rural V/S Urban…

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SR. NO. ATTRIBUTE RURAL URBAN

1 Population Density Low High
2 Occupation Agriculture Trade, Industry, and
Services.
3 Economy Close and less Open and Monetized.
monetized.
4 Infrastructure Poor and Weak. Abundant and Strong.
5 Attitude to Modernization Tradition bound. Ready for adaptation
and change.
6 Family Structure Joint Nuclear
7 Possession of House hold Low High
assets
8 Mobility Low High
9 Literacy Low High
10 Exposure Low High
11 Attitude towards Life Fatalistic Scientific
12 Manufacturing Activity Low High
13 Distribution Outlets Fewer More

Marketing-Mix…

Aspect Rural Urban

Product
a) Awareness Low High

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b) Concept Less Known Known

c) Positioning Difficult Easy
d) Usage Method Difficult to grasp Easily rasped
e) Quality Preference Moderate Good
f) Features Less Important Important
Price
a) Sensitive Very much Yes
b) Level Desired Low-Medium Medium-High
Physical Distribution
a) Channels Village Shops, Haats & Wholesalers&
jatras. Retailers.
b) Transport Facilities Average Good
c) Product Availability Limited High
Promotion
a) Advertising TV, Radio, Print Media to Print, Audio-Visuals,
some extent, More Outdoors, Exhibitions.
Languages

b) Personal Selling Occasionally Door-to-Door

Frequently
c) Sales Promotion Gifts, Price Discounts Contests, Gifts, Price
Discounts
d) Publicity
Less Good Opportunities.
Limited Adequate scope

Present position…

Change is the “LAW OF NATURE”. Though change

is common, some changes seem peculiar and
paradoxical. Today, we witness in Indian

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Economy one such a bi-faceted change – a change from national to global on one side and,
urban to rural on the other.

“RURALISE” is among the Buzz words of this new era. Though change is evolutionary and
characteristic of a developing nation with huge population and vast resources, one requires a
visionary entrepreneurship to respond proactively to it.

The first five years of new millennium will belong neither to the urban markets,
which have reached saturation and where margins are under pressure nor to the export
markets, which suffer from inadequate infrastructure back home, and uncompetitive price
overseas. But it belongs to RURAL MARKETING.

“RURAL MARKETING” has become the latest mantra of most corporates. FMCG
majors like HLL, P&G, PARLE, COLGATE PALMOLIVE, BRITANNIA, etc. were the first
to wake up this fact. Even MNC’s like LG, PHILIPS, WIRLPOOL, and other consumer
electronic majors are also gung-ho about the rural segment. The fever has spread the
consumer durable companies and beyond.

Today, many of the Corporates and MNC’s look at these markets by compulsion as
well as by choice. Compulsion, because markets are saturated, and there is no where to go.
Choice: - because they are attractive and viable.

Profile of Rural Consumers…

Importance of customs

This however raises a fundamental problem of fathoming the differences between

urban and rural markets in India. This is of paramount importance in the Indian marketing

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environment as rural and urban markets in our country are so very diverse in nature that
urban marketing programmes just cannot be successfully extended to the rural markets.

The buying behaviour demonstrated by the rural Indian differs tremendously when
compared to the typical urban Indian. Further, the values, aspirations and needs of the rural
people vastly differ from that of the urban population. Basic cultural values have not yet
faded in rural India. Buying decisions are still made by the eldest male member in the rural
family whereas even children influence buying decisions in urban areas. Further, buying
decisions are highly influenced by social customs, traditions and beliefs in the rural markets.
Many rural purchases require collective social sanction, unheard off in urban areas.

Another contrasting feature is the precision in the assessment of purchasing power of

the consumers. In urban markets, income levels are generally used to measure purchasing
power and markets are segmented accordingly. However, this measure is not adequate for
defining the purchasing power in rural areas because of the single fact that rural incomes are
grossly underestimated. Farmers and rural artisans are paid in cash as well as in kind.
However, while reporting their incomes, they report only cash earnings, which then affect the
calculation of their purchasing power.

This is the reason why marketers are often surprised to find that their products are
sometimes consumed by people who, according to their surveys and estimates do not have
the purchasing power to do so. Every marketing manager must therefore make an attempt to
understand the rural consumer better so that he can plan his strategies in such a manner that
they produce the desired results.

Consumer Behavior, Influences and Its Implications…

A stereotype of the rural consumer or of rural consumer behavior is absent and

this creates problems as well as opportunities for the marketer. Variations in behavior reflect

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geographical, demographical and behavioral influences on lifestyle, which provides

marketers with options to segment the market.
 
To understand rural buying behavior, a marketer must first understand the
factors that influence buying behavior and the variations to behavior.

These help to generate information upon which a marketer can create bases to
segment the rural market taking the following factors consideration:

        Environment of the consumer

        Geographical Influences
        Influence of Occupation
        Place of Purchase
        Creative use of Products    

Obviously rural consumers do make some purchases from urban areas (towns
etc) because there are a few product categories where rural distribution is still comparatively
low and therefore the consumers buys from towns; and in certain cases, the consumer seeks
variety. In the case of biscuits, toilet soaps and washing powders, the consumers may
perceive the range in villages as limited.

The Next Step…

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The potentialities of the rural market are indeed

great. With the changing economic conditions in the
country and with emerging rural markets are bound to
yield rich dividends.

All this calls for concentrated and coordinated

action on the part of both, the government and the
industry.

The government’s role lies primarily in

developing the infrastructure, e.g. a good network of
roads in the interiors of rural India, speedy arrangements
for better light, water and irrigation facilities, financial
and technical assistance in setting up industries in villages, and distribution of their products.
The government’s role will be equally important in conducting rural market surveys and
compilation of vital statistics and their publication for the benefit of business and industry.

A hand-in-hand working of the government and industry will definitely help define a
smooth road to development and growth of rural market.

Hungry Kya???

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Its Biscuit Time folks!!!

Biscuits are something that doesn’t need an introduction as such. Everyone everyday
have them. Some have it for their taste, some for their health factor, some to fulfill their
hunger and so on.

A product that is consumed almost daily. A product that has no boundaries. There are
biscuits for all kinds of teeth. Sweet, Creamy, Salty, Semi Sweet, Sweet and Salty etc are the
various kinds of biscuits that are available in today’s market, fitting all kinds of mood. And if
you look at the history of biscuits, it dates back to second century Rome and it comes from
the Latin word "bis coctum" which mean twice baked.

As people started to explore the globe, biscuits became the ideal traveling food,
because they stayed fresh for long periods. Biscuits really boomed during the seafaring age,
when they were sealed in airtight containers to last for months at a time. In fact, the countries
where biscuits are most popular today, such those in Western Europe, led the seafaring
charge. The present biscuits scenario in India looks like a battle front.

The battle being led by stalwarts like Britannia and Parle with close competition from
other companies like ITC, Nutrine, HLL Kissan, Kwality and even International Brands like
Kellogg’s, Nestle, Sara Lee, United Biscuits etc. Britannia is undoubtedly the leader with
Brands like Tiger, Little Hearts, and Milk Bikis etc.

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Britannia's Tiger biscuits are doing a world of good to the company. It is indeed
selling like hot pancakes in the rural areas which actually constitute 56% of the biscuit
market.

But in the Glucose segment Parle G is the market leader. Parle G has indeed become
a household name. Not to forget the Market niches coming in the form of Hll and ITC. Hll
bistix(biscuits sticks that can be dipped into flavours like Strawberry and Chocolate) is
indeed an innovation and will surely have and is surely having a lot of takers. The pricing
adopted by HLL is also kind of unique. Its charging only Rs 5 for Bistix.

Whereas, ITC's foray into the world of Biscuits seems to be paying off good. ITC
Sunfeast brand of biscuits with a new and peppy flavour of Marie, Orange will surely
generate a kind of curiosity in the minds of biscuit consumers. The toughest competition for
these established players come from the unorganized market. This market is indeed
interesting to study. It consists of "n" number of companies. They are more or less
Counterfeiters or Cloners.

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