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Introduction
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.
The general impression is that the rural markets have potential only for
agricultural inputs like seeds, fertilizers and pesticides, cattle feed and agricultural
machinery. More than 50% of the national income is generated in rural India and
there are opportunities to market modern goods and services in rural areas and also
market agricultural products in urban areas. Infact it has been estimated that the
rural markets are growing at fives times the rate of urban markets. About 70% of
bicycles, mechanical watches and radios and about 60% of batteries, sewing
machine and table fans are sold in rural India. At the same time the sales of colour
television, washing machines, refrigerators, shampoos, face cream, mosquito
repellent and tooth paste are very low and there is tremendous potential for such
products in rural markets
While rural markets offer big attractions to the marketers, it is not easy to
enter the market and take a sizeable share of the market within a short period. This
is due to low literacy, low income, seasonal demand and problems with regards to
transportation, communication and distribution channel. Further there are different
groups based on religion, caste, education, income and age. There is a need to
understand the rural markets in terms of buyer behaviour, attitudes, beliefs and
aspirations of people.
Characteristics of rural markets
According to the 1991 census, the rural population constitutes about 74% of
the total population in our country. While the population went from 55 crores
(1971) to 85 crores (1991), the rural-urban proportion have remained more or less
the same as in 1971. There are states like U.P, M.P, Bihar, Rajasthan and Orissa
where rural population varies from 80 to 90 percent. Therefore a large population
gives an opportunity for marketing a variety of goods and services. However
income and purchasing power play a major role in determining the demand in rural
areas.
2. Occupation pattern:
3. Literacy level:
It has been estimated that the rural literacy level is 36% compared to 62% in
urban areas. Literacy is one of the important factors in developing awareness and
knowledge about technological changes. As many as 16 major languages are
spoken adding to the complexities in rural communication.
5. Media reach:
The media reach in rural household is low. Statistics indicates that the reach
of Print media is 10%, followed by TV 31%, Radio 32% and Cinema 36%.
Therefore the marketer has to consider rural specific promotion media and methods
to reach the villagers.
6. Communication facilities:
About 20% of the six lakh villages are without telephone facility even today.
This includes Rajasthan (17600 villages), MP (14200 villages), Maharashtra
(12000 villages), Gujarat (7000 villages), and AP, Assam, Orissa about 6000
villages each. (Source: The Indian Express dated 30.3.2003).
7. Transportation facilities:
About 50% of the markets are not connected by road. Most of the roads are
kachha and become unusable during rainy season. Many farmers use bullock cart
for transporting their produce from village to the market. This means of transport is
time consuming.
8. Rural electrification:
9. Medical facilities:
Medical facilities are quite inadequate and the villagers have to travel long
distances for getting medical treatment.
10. Distance:
Village nearer to towns has elements of the urban life. Interior villages are
more traditional.
Promotion strategies
Through the rural markets offer big attractions to the marketers, one of the
most important questions frequently asked is “How do we reach the large rural
population through different media and methods?
Formal media
It includes Press and print, TV, Cinema, Radio, and Point of purchase and
Outdoor advertisement. Reach of formal media is low in rural households
(Print:18%, TV:27%, Cinema:30%, and Radio:37%) and therefore the marketer has
to consider the following points:
➢ Television:
It has made a great impact and large audience has been exposed to this
medium. HLL has been using TV to communicate with the rural masses. Lifebuoy,
Lux, Nihar oil etc are some of the products advertised via television. Regional TV
channels have become very popular especially in Southern states. Examples: SUN
TV is very popular even in rural areas in Tamil Nadu and Asianet is a preferred
regional channel in Kerala. Many consumer goods companies and fertilizer
companies are using these TV channels to reach the rural customer.
➢ Radio:
➢ Cinema:
About 65% of the earnings from cinema are from rural markets. Film
viewing habits is high in certain states like Tamil Nadu, Karnataka and Andhra
Pradesh. Village theatres do roaring business during festivals by having four shows
per day. The monthly charge for showing an ad film is within Rs.500. Local
distributor or dealer who has good contacts with cinema houses in villages can
easily monitor this activity. Examples: Films on products like Vicks, Lifebuoy and
SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides can
also be screened in village theatres.
➢ Outdoor advertisements:
This form of media, which includes signboards, wall painting, hoarding, tree
boards, bus boards, dealer boards, product display boards etc, is cost effective in
rural areas. Symbols, pictures and colours should be used in POPs meant for rural
markets so that they can easily identify the products. Generally rural people prefer
bright colours and the marketer should utilize such cues.
➢ Point of purchase:
Display of hangings, festoons and product packs in the shops will catch the
attention of prospective buyers. However a clutter of such POP materials of
competing companies will not have the desired effect and is to be avoided.
➢ Wall paintings:
➢ Tree boards:
These are painted boards of about two square feet in dimension having the
picture or name or slogan of the product painted on it. The cost of such a painted
board is about Rs.80. These boards are fixed to the trees on both sides of the
village road at a height of about 10 feet from ground level. These boards attract the
attention of slow moving vehicles like cycles, bullock carts and tractors and people
walking on the road. Considering the poor condition of roads, even the buses move
at slow speed through village road. Fertilizer and pesticide companies in rural areas
extensively use tree boards. These are low priced promotion items and can be used
by consumer goods companies too.
These media with effective reach and personalized communication will help
in realizing the promotional objectives. Companies to suit the specific
requirements of rural communication are using a variety of such media effectively
and some of the more important media and methods are given below.
➢ Farm-to-Farm/House-to-House visit:
➢ Opinion leaders:
Villagers place more emphasis on the experience of others who have used a
product/brand to make purchase decision. Opinion leader is a person who is
considered to be knowledgeable and is consulted by others and his advice is
normally followed. Such opinion leaders could be big landlords, bank official,
panchayath-president, teachers, extension workers etc. Examples: a) Mahindra
Tractors use bankers as opinion leaders for their product. b) Asian Paints promoted
its Utsav brand of paint by painting the village Sarpanch’s house a few months
prior to the launch if the branch to demonstrate that the paint does not peel off.
➢ The Melas:
Melas are of different types i.e. commodity fairs, cattle fairs and religious
fairs and may be held only for a day or may extend over a week. Many companies
have come out with creative ideas for participating in such melas. Examples: a)
Britannia promotes Tiger Brand Biscuits through melas. b) The mahakumbh at
Allahabad is the biggest mela in India. HLL has put up 14 stalls in the mela
grounds for promoting Lifebuoy. Handcarts have been deployed for increasing
access.
➢ The Haats:
Traditionally on certain days of week, both the sellers and buyers meet in the
village to buy and sell goods and services. These are the haats that are being held
regularly in all rural areas. The sellers arrive in the morning in the haat and remain
till late in the evening. Next day they move to another haat. The reason being that
in villages the wages are paid on weekly basis and haat is conducted on the day
when the villages get their wages. For the marketer, the haat can be an ideal
platform for advertising and selling of goods. By participating in haats and melas,
the company can not only promote and sell the products but also understand the
shared values, beliefs and perceptions of rural customers that influence his buying
behaviour.
➢ Folk dances:
AV unit is one of the effective tools for rural communication. The van is a
mobile promotion station having facilities for screening films slides and mike
publicity. The sales person makes a brief talk about situation in the village, the
products and the benefits. The ad film is screened along with some popular film
shots and this continues for about 30 minutes. At the end of the film show, he
distributes handbills and answers queries of the customers. The whole operation
takes about 1-2 hours depending upon the products under promotion, number of
participants in the meeting and time taken for question and answers. The vans
move to the next village for the second show. The cost of running a fully equipped
AVP unit is about Rs.4000 per day and AVP van operation has to be considered as
an investment for business development in rural areas. Example: Companies such
as HLL, Colgate, and Phillips have made effective use of AVP vans for
popularizing their products in rural areas.
Package is an integral part of the product. Its main purpose is to protect the
product during transit, to preserve the quality and to avoid any loss in quality and
quantity. The main purpose of this contest is to remind the customer to buy the
product as soon as he enters the shop. Another objective is to influence the dealer
to stock the product and support the company in increasing the sales. The display
contest has to be announced well in advance and promotional materials to be
distributed to all the selected dealers in a geographical area. Prizes for best displays
are announced to motivate the dealers; the contest lasts for about a month. A well-
planned product display contest not only increases the involvement of dealers in
the company’s products but also increases the sales during the contest period. This
is used for promoting consumer goods such as shampoos, soaps and toothpaste.
➢ Field demonstration:
➢ Information centers:
➢ Life-style marketing:
Each rural market segment has certain special features i.e. they share
common life-style traits. They include village sports, religious events, prominent
personalities and role models. Examples: Textile mills maintaining community
gardens, Mineral water companies supplying clean drinking water during summer
festivals in villages and Consumer goods companies sponsoring Kabaddi.
Distribution Channel Strategies
➢ Manufacturer-wholesaler-retailer-consumer:
➢ Manufacturer-retailer-ultimate consumer:
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