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Research Report

On

RURAL MARKETING:TARGETING THE NONURBAN CONSUMERS

Submitted in partial fulfilment


of requirements of
Master of Business Administration
Submitted By,
Badal Solapurwala
MBA(2014-2016)
AURO UNIVERSITY
The School of Hospitality & Management

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Table of Contents
INTRODUCTION .................................................................................................................................. 3
What is rural? ...................................................................................................................................... 3
Rural Marketing .................................................................................................................................. 3
IMPULSE TO GO RURAL ................................................................................................................ 5
Large Population ............................................................................................................................. 5
Rising Rural Popularity................................................................................................................... 5
Growth in Market ............................................................................................................................ 6
Effectiveness of Communication .................................................................................................... 6
LITERATURE REVIEW ....................................................................................................................... 6
Why Rural India? .................................................................................................................................. 10
Opportunities in Indian Rural market ................................................................................................... 11
More rural development initiatives by the government. ....................................................................... 11
Challenges in Indian Rural market........................................................................................................ 12
The major hurdles in tapping the rural markets can be summarized as: -............................................. 13
Methods Followed Traditionally........................................................................................................... 14
Strategies for Rural Marketing.............................................................................................................. 14
Marketing Strategy............................................................................................................................ 14
Distribution Strategy ......................................................................................................................... 15
Promotional Strategy ........................................................................................................................ 15
Scope of Rural Marketing ..................................................................................................................... 16
Population ......................................................................................................................................... 16
2. Rising Rural Prosperity ................................................................................................................. 16
3. Growth in consumption................................................................................................................. 17
4. Change in life style and Demands................................................................................................. 17
5. Market growth rate higher than urban: ......................................................................................... 17
6. Life cycle advantage ..................................................................................................................... 17
7. Decision-making Units ................................................................................................................. 17
RESEARCH METHODOLOGY .......................................................................................................... 18
Research Design: .............................................................................................................................. 18
Data Collection Method: ................................................................................................................... 18
Secondary Data ............................................................................................................................. 18
CONCLUSION ..................................................................................................................................... 18
REFERENCES ..................................................................................................................................... 18

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INTRODUCTION
What is rural?
According to the census of India, villages with clear surveyed boundaries not having a
municipality, corporation or board, with density of population not more than 400sq.km and
at least 75 per cent of the male working population engaged in agriculture and allied
activities would qualify as rural. Therefore, from the above stated conditions, there are
638,000 villages in the country. Of these, only 0.5 cent has a population above 10,000 and
2 per cent have population between 5,000 and 10,000. Around 50 per cent has a population
less than 200. However, FMCG and consumer durable companies are considering a
territory as a rural market, which has more than 20,000, and below 50,000 populations.
According to them, class-II and class-III towns are considered as rural. According to the
census of India 2001, there are more than 4,000 towns in the country that are categorized
as Class II and III Towns based on the population. Size of rural market is estimated to
be 42 million households and rural market has been growing at five times the pace of the
urban market.

Rural Marketing
The concept of Rural Marketing in India Economy has played an influential role in the
lives of people. The rural market in India is not a separate entity in itself and it is highly
influenced by the sociological and behavioural factors operating in the country. Rural
marketing determines the carrying out of business activities bringing in the flow of goods
from urban sectors to the rural regions of the country as well as the marketing of various
products manufactured by the non-agricultural workers from rural to urban areas. The rural
market in India is vast, scattered and offers a plenty of opportunities in comparison to the
urban sector. It covers the maximum population and regions and thereby, the maximum
number of consumers.
'Go rural' is the slogan of marketing guru is after analyzing the socio-economic changes in
villages. The Rural population is nearly three times of the urban, so rural consumers have
become the prime target market for consumer durable and non-durable products, food,
construction, electrical, electronics, automobiles, banks, insurance companies and other
sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides
and farm machinery.
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However, the success of the product in the rural market is as predictable as rain. It has
always been difficult to understand the rural markets. Marketers need to understand the
social dynamics and attitude variations within each village. But by overcoming the
challenges and looking into the opportunities which rural markets offers to the marketers
it is said that the future is very promising for those who understand the dynamics of rural
markets and exploit them to their best advantage. Rural markets face the critical issues of
Distribution, Understanding the rural consumer, Communication and Poor infrastructure.
The marketer has to strengthen the distribution and pricing strategies. Improvement in
infrastructure and reach, promise a bright future for those intending to go rural. Rural
consumers are keen on branded goods nowadays, so the market size for products and
services seems to have burgeoned. The rural population has shown a trend of wanting to
move into a state of gradual urbanization in terms of exposure, habits, lifestyles and lastly,
consumption patterns of goods and services.
To expand the market by tapping the countryside, many MNC's are foraying into India's
rural markets. Among those that have made headway are Hindustan Liver, Coca-Cola, LG
electronics, Britannia, Colgate Palmolive and the foreign invested telecom companies.
These companies' foreseeing the vast size and demand in the rural market cannot afford to
ignore. Rural market accounts for half the total market for TV sets, Fans, Pressure
cookers, bicycles, washing soap and tooth powder where FMCG products in rural
products in rural markets is growing much faster than the urban counterpart.
In recent years, rural markets have acquired significance, as the overall growth of the
economy has resulted into substantial increase in the purchasing power of the rural
communities. Because of green revolution, the rural areas are consuming a large quantity of
industrial and urban manufactured products. In this context, a special marketing strategy,
namely, rural marketing g has emerged. However, often, rural marketing is confused with
agricultural marketing - the latter denotes marketing of produce of the rural areas to the
urban

consumers

or

industrial

consumers,

whereas

rural

marketing

involves

delivering manufactured or processed inputs or services to rural producers or consumers.


The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during the last
fifty 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
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the organized sector and the unorganized sector. 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 products. This presents a tremendous opportunity for makers of branded products
who can convert consumers to buy branded products.
Globally, the FMCG sector has been successful in selling products to the lower and middleincome groups, and the same is true in India. Over 70% of sales are made to middle class
households today and over 50% 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 cutthroat competition in urban India,
many producers of FMCGs are driven to chalk out bold new strategies for targeting the
rural consumer in a big way. 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 BSN L mobile connections, 50 per cent
went to small towns and villages; of 20 million Rediff mail subscriptions, 60 per cent came
from small towns; so did half the transactions on Rediff's shopping site. 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.

IMPULSE TO GO RURAL
There are many reasons that have urged the FMCG companies to enter the uncharted
territory of rural India. Some of the attractions are discussed below:
Large Population

The rural Indian population is large and its growth rate is high. Over 70% India is one
billion and 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.
Rising Rural Popularity

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
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rural sector. As per the National Council for Applied Economic Research (NCAER) study,
there are as many middle income and abovehouseholds in the rural areas as there are in the
urban areas. There are almost twice as many lower middle incomehouseholds in rural areas
as in the urban areas.
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.
Effectiveness of Communication

An important tool to reach out to the rural audience is through effective communication. A
rural consumer is brand loyal and understands symbols better. This also makes it easy to sell
look alike". The rural audience has matured enough to understand the communication
developed for the urban markets, especially with reference to FMCG products. Television has
been a major effective communication system for rural mass and, as a result, companies
should identify themselves with their advertisements. Advertisements touching the emotions
of the rural folks, it is argued, could drive a quantum jump in sales.
IT Penetration in Rural India Today there are over 15 million villagers in India who are
aware of the Internet and over 300,000 villagers have used it! Ten years back, history was
created with Public Call Office phone booths (essentially manually operated payphone
facilities), opening in every corner of the country. Web connectivity through various types
of communication hubs will surely affect the currency of information exchange. As the
electronic ethos and IT culture moves into rural India, the possibilities of change are
becoming visible.

LITERATURE REVIEW
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

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sector is excited about the rural population whose incomes are rising and the
lifestyles are changing. There are as many middle-income households in the rural
areas as there are in the urban. Thus, the rural marketing has been growing steadily
over the years and is now bigger than the urban market for FMCGs. Globally, the
FMCG sector has been successful in selling products to the lower and middle-income
groups and the same is true in India. Over 70% of sales are 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 cutthroat 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. However, the
rural penetration rates are low. This presents a tremendous opportunity for makers of
branded products who can convert consumers to buy branded products. Many companies
including MNCs and regional players started developing marketing strategies to lure the
untapped market. While developing the strategies, the marketers need to treat the rural
consumer differently from their counterparts in urban because they are economically,
socially and psycho-graphically different to each other. (Singhal, Rathi, & Bhardwaj,
2013)
In recent years, rural markets have acquired significance, as the overall growth of the
economy has resulted into substantial increase in the purchasing power of the rural
communities. There is significant difference in the urban and rural market in India. Rural
consumer is different as to Urban consumer in terms of Income, Education, Family back
ground and other demographic aspects. Due to green revolution, the rural areas are
consuming a large quantity of industrial and manufactured products. In this way rural
market offers opportunities in the form of large untapped market, increase in disposable
income, increase in literacy level and large scope for penetration. To take the advantage of
these opportunities, a special marketing strategy Rural Marketing has emerged. Rural
markets in India have undergone considerable changes as the urban markets have hit
saturation and relative growth has slowed down. Marketers have realized that rural India
has tremendous potential and with increasing focus of the policy makers on injecting
money to pump the rural economy have all contributed towards an increased interest of
businesses towards rural India. (Verma, 2013)

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The Fast Moving Consumer Goods sector is a vital contributor to Indias Gross
Domestic Product. The FMCG sector has been contributing to the demand of lower and
middle-income groups in India. Over 73% of FMCG, products are sold to middle class
households in which over 52% is in rural India.
Rural marketing has become the hottest marketing arena for most of the FMCG
companies. The rural India market is huge and opportunities in it are limitless. Saturation
and cutthroat competition in urban areas, many FMCG companies are moving towards
the rural market and making new strategies for targeting the rural consumer. The Indian
FMCG companies are now busy in formulating new competitive strategies for this
untapped market for so while and having high potential. Therefore, a comparative study
is made on growth, opportunity, and challenges of FMCGs in rural market.
One of the most attractive reasons for the companies for tapping it is income is rising in
rural areas and purchasing power of the lower and middle income group is also rising
and which is eager to spend money on improvement of their lifestyle. (Srivastava &
Kumar, 2013)
Indian markets are stretching beyond urban areas. It is rightly said that India resides in
villages and rural markets have succeeded in getting the attention of Indian companies to
MNCs. Differences between Urban and Rural Markets and also look at some of the
myths associated with the Indian Rural Markets and try to present the reality. (Sagi,
2014)
Marketing can play an important role in fostering economic growth and development. This
process was presciently recognized by Drucker (1958) over 50 years ago. He pointed out
that marketing is at the same time the least developed economic activity, but also the one
with the greatest multiplier effect on economic development. The mechanism for growth
through marketing relates to the mobilization of latent economic energy and fostering the
development of entrepreneurs and managers. By empowering rural consumers, marketers
establish the foundation necessary for success. In, rural consumers in emerging market
economies offer tremendous potential, but realizing this requires significant investment,
substantial creativity in formulating strategy and overcoming obstacles and above all,
patience and adoption of a long-term perspective. (Craig & Douglas, 2011)
Rural marketing is much talked about subject for the business establishments especially
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the FMCG and the consumer durable industry. In present scenario every marketing
player is keen to invest in rural markets. This is because of the fact that rural markets
have high growth rate and preferences of people living in rural areas are also getting
changed. They are also willing to have an improvement in their standard living. Now
days many of business firms are planning to have a significant investment in rural
markets in order to increase their growth rate. Though there is vast potential and
substantial growth opportunities in the rural markets, yet there are some challenges too,
which caused hurdles in tapping rural markets. But the question arises whether they
would get desired results by investing in the rural markets. (Siddique, 2012)
Brands can be successful when they are closely associated with consumers and are
preferred by consumers over unbranded products. Personality factors of the brands give
consumers the means whereby they can make choices and judgments. Based on these
experiences, consumers rely on chosen brands and sense guaranteed standards of quality
and service, which augments consumer trust and brand value. Human personality traits
need to be evaluated meticulously by firms in a given market to determine the short-term
competitive advantage. The performance of global brands in low-profile consumer market
segments is constrained by high transaction costs and coordination problems along the
brand promotions, consumption and consumer value chain.

Hence, firms managing

brands in Bop market segments need to reduce brand costs by increasing sales volumes
and

augmenting consumer value. Brands in Bop market segments are socially and

culturally embedded, and co-created and positioned by the influence of premium market
brands. Advertising and point-of-sales promotions also strengthen the brands in Bop
market segments. (Rajagopal, 2009)
Through there is a definite growth in rural economy and the rural economy and rural
markets offers lucrative opportunities for both consumer durables, yet market have not
directed their efforts as aggressively as they should have been. Around 700 million
people, or 70% of India's population, live in 6, 27,000 villages in rural areas. 90% of the
rural population is concentrated in villages. Rural marketing is as old as the civilization.
Surplus of agro-products were exchanged in earlier days in the barter system. (Sinha,
2014)
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
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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. There are as many middle income households in the rural areas as there are in
the urban. Thus the rural marketing has been growing steadily over the years and is now
bigger than the urban market for FMCGs. Globally, the FMCG sector has been successful
in selling products to the lower and middle income groups and the same is true in India.
Over 70% of sales are 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. But the rural penetration rates are low.
This presents a tremendous opportunity for makers of branded products who can convert
consumers to buy branded products. Many companies including MNCs and regional
players started developing marketing strategies to lure the untapped market. While
developing the strategies, the marketers need to treat the rural consumer differently from
their counterparts in urban because they are economically, socially and psycho-graphically
different to each other. (Raj & Selvaraj, 2007)
Rural market is the key to survival in India. Most consumer markets are getting cluttered,
thereby slowing down the growth rates of consumer products. While overall volumes
continue to grow reasonably well, there are too many players eating into each other's
market share. Reducing prices and investing heavily in sales promotion becomes
inevitable in the urban markets. Consequently, operating margins come under pressure and
new growth markets need to be explored. It is here that the rural markets provide an
opportunity, a ray of hope for a marketer. (Upadhyaya, 2014)

Why Rural India?


There are various reasons why every industry is taking a very serious look at rural
markets: - About 285 million live in urban India whereas 742 million reside in rural
areas, constituting 72% of India's population resides in its 6, 00,000 villages. Size of
rural market is estimated to be 42 million households and rural market has been growing
at five times the pace of the urban market.
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Opportunities in Indian Rural market


* More than 750 million people * Estimated annual size of the rural market
FMCG

Rs. 70,000 Crore

Durables

Rs. 5,500 Crore

Agricultural-Inputs (including tractors)

Rs. 48,000 Crore

2 / 4 Wheelers

Rs. 8,400 Crore

* In financial year 2011-12, LIC sold more than 50% of its policies in rural market.
* 42 million rural households (HHs) are availing banking services in comparison to 27
million urban HHs.
* Investment in formal savings instruments is 6.6 million HHs in rural and 6.7 million HHs
in urban.
* In last 50 years, 45% villages have been connected by road.
* More than 90% villages are electrified, though only 44% rural homes have electric
connections.
* Government is providing subsidiaries to the villagers to use other source of energy like
Solar System and is now being used in large amount.
* Number of "pucca" houses increasing day by day.
* Rural literacy level improved from 36% to 59%.
* Percentage of BPL families declined from 46% to 25%.
* Out of two million BSNL mobile connections, 50% are in small towns / villages.
* 41 million Kisan Credit Cards have been issued (against 22 million credit-plus-debit
cards in urban), with cumulative credit of Rs. 977 billion resulting in tremendous liquidity.

More rural development initiatives by the government.


Increasing agricultural productivity leading to growth of rural disposable income.
Lowering of difference between taste of urban and rural customers.
Good Monsoons in the last couple of years.
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Growing rural infrastructure - thanks to Government initiatives.


Setting up of channels like e-choupals by companies like ITC.
Many companies like Colgate-Palmolive, HLL, Godrej, etc., have already made forays
into rural households but still capturing the markets is a distant dream. Most marketers
still lack in-depth knowledge to analyze the complex rural market. In the Indian
context, rural marketing is a complex subject. For a business organization, rural
marketing is beset with a number of problems. The prices of rural marketing pose many
problems due to the vastness of the country and a high potentiality for providing an
effective marketing system. Besides, a few other problems stem from the underdeveloped markets, and illiterate and gullible people constitute the major segment of
the markets. More purchasing power is not enough. It is not enough to have some
consumption pioneers. The activation of buying on a wide scale is an essential precondition for the exploitation of the rural market. It is now unanimously accepted that
the rural salesmanship in India has been insufficient and inadequate and out of
proportion to the agriculture revolution. This calls for strong bias in favour of raising
the rural demand as against the urban demand.
The traditional marketing activities of promotion, distribution, sales and servicing,
undertaken so far in the urban and semi-urban contexts, are to be extended to cover a
much wider area in a rural environment by introducing appropriate innovation,
selection and adoption.
The traditional marketing activities of promotion, distribution, sales and servicing,
undertaken so far in the urban and semi-urban contexts, are to be extended to cover a
much wider area in a rural environment by introducing appropriate innovation,
selection and adoption.

Challenges in Indian Rural market


Rural markets, as part of any economy, have untouched potential. There are several
difficulties confronting the effort to fully explore rural markets. The concept of rural
markets in India is still in evolving shape, and the sector poses a variety of challenges.
Distribution costs and non availability of retail outlets are major problems faced by the
marketers. The success of a brand in the Indian rural market is as unpredictable as rain.
Many brands, which should have been successful, have failed miserably. This is
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because most firms try to extend marketing plans that they use in urban areas to the
rural markets. 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.
Therefore, marketers need to understand the social dynamics and attitude variations
within each village though nationally it follows a consistent pattern. The main
problems in rural marketing are: Understanding the Rural Consumer.
Poor Infrastructure.
Physical Distribution.
Channel Management.
Promotion and Marketing Communication.

The major hurdles in tapping the rural markets can be summarized


as: High distribution costs.
High initial market development expenditure.
Inability of the small retailer to carry stock without adequate credit facility.
Generating effective demand for manufactured foods.
Wholesale and dealer network problems.
Mass communication and promotion problems.
Banking and credit problems
Management and sales managing problems
Market research problems
Inadequate infrastructure facilities (lack of physical distribution, roads
warehouses and media availability)
Highly dispersed and thinly populated markets
Low per capita and poor standards of living, social, economic and cultural
backwardness of the rural masses
Low level of exposure to different product categories and product brands
Cultural gap between urban-based marketers and rural consumers
The development of the rural market will involve additional cost both in terms of
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promotion and distribution. In rural marketing, often it is not promotion of a brand that is
crucial, but creating an awareness concerning a particular product field, for instance,
fertilizers and pesticides. Urban and semi-urban based salesmen are not able to tap the full
potential in the villages. Here, it may be suggested that the marketers may select and
employ the educated unemployed from villages.

Methods Followed Traditionally


Traditional methods of rural marketing make an interesting study and they ought to be
analyzed carefully to draw relevant conclusions. Conventionally, marketers have used the
following tools to make rural inroads: Use of few select rural distributors and retailers to stock their goods but no direct
interaction with prospective consumer.
Use of print media or radio but no alternate form of advertising for promoting their
brands.
More focus on price of product but less attention devoted to quality or durability.
Same product features for urban and rural setting with no customization for rural
areas despite differences in the market environment.
Low frequency of marketing campaigns.
Little uses of village congregations like haats and melas to sell the products.
More focus on men as decision makers and buyers.

Strategies for Rural Marketing


The past practices of treating rural markets as appendages of the urban market is not
correct, since rural markets have their own independent existence, and if cultivated well
could turn into a generator of profit for the marketers. But the rural markets can be
exploited by realizing them, rather than treating them as convenient extensions of the urban
market.

Marketing Strategy
Marketers need to understand the psychology of the rural consumers and then act
consequently. Rural marketing involves more exhaustive personal selling efforts
compared to urban marketing. Firms should abstain from designing goods for the urban
markets and subsequently pushing them in the rural areas. To effectively tap the rural
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market, a brand must associate it with the same things the rural folks do. 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 myriad rituals,
celebrations, festivals, "melas", and other activities where they assemble.

Distribution Strategy
One of the ways could be using company delivery van 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. Annual "melas" organized are quite popular and provide a very good
platform for distribution because 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 called "Haats' when exchange of goods and services are carried out.
This is another potential low cost distribution channel available to the marketers. Also,
every region consisting of several villages is generally served by one satellite town
termed as "Mandis" where people prefer to go to buy their durable commodities. If
marketing managers use these feeder towns, they will easily be able to cover a large
section of the rural population.

Promotional Strategy
Marketers must be very careful while choosing the mediums to be used for
communication. Only 16% of the rural population has access to a vernacular
newspaper. So, the audio visuals must be planned to convey a right message to the rural
folk. The rich, traditional media forms like folk dances, puppet shows, etc., with which
the rural consumers are familiar and comfortable, can be used for high impact product
campaigns. Radio is also very popular source of information and Entertainment, Adds
on radio can also be a helpful tool for marketers.
Some other Strategies to be followed in Indian Rural Market Decentralizing rural markets by detaching them from the urban bases. A giveand-take two-way approach should replace the present one-way exploitation.
The salesman in rural markets should be selected from the educated
unemployed villagers, trained well and appointed as salesmen. The town-tovillages shuttling salesmen are to be replaced by stationary salesman in villages.
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Companies should also adequately concentrate on educating the villagers to


save them from spurious goods and services.
Rural markets are laggards in picking up new products. This will help the
companies to phase their marketing efforts. This will also help to sell
inventories of products out dated in urban markets.
In rural India, consumers are not brand-loyal, but their purchase patterns can be
termed as brand stickiness. So, more brand awareness and presence in the
markets will influence the purchasers.
It is important for any brand to test the campaign before as well as after it is
executed to understand and measure the audience consumption patterns.

Scope of Rural Marketing


1) Population density of less than 400 per sq.km.
2) At least 75% of the male working population is engaged in agriculture.
3) No municipality or board.
If we go by statistics, roughly around 70% of the Indian population lives in the rural
areas. That is almost 12 % of the world population. To expand the market by tapping
the countryside, more and more MNCs are foraying into Indias rural market.
Below are the few points why organizations are looking at rural marketing with a positive
attitude

1. Population
According to 2011 Census rural population is 72% of total population and it is scattered
over a wide range of geographic area. That is 12% of the world population which is not
yet fully utilized.

2. Rising Rural Prosperity


Average income level has unproved due to modern farming practices, contract farming
industrialization, migration to urban areas etc. There has been an overall increase in
economic activities because during the planned rural development heavy outlay of resources
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on irrigation, fertilizers, agricultural equipments and agro processing industry has been
made. Saving habits in rural people also has increased. This too contributes in higher
purchasing power

3. Growth in consumption
There is a growth in purchasing power of rural consumers. But, the average per capita house
hold expenditure is still low compared to urban spending

4. Change in life style and Demands


Life style of rural consumer changed considerably. There has been increase in demand for
durables and non-durables like table fans, radios, mopeds, soaps, etc. by rural consumers.
This provides a ready market for the producers. Rural market is expanding day after day.

5. Market growth rate higher than urban:


The growth rate of fast moving consumer goods [FMCG] market and durable market is high
in rural areas. The rural market share is more than 50% for products like cooking oil, hair oil
etc.

6. Life cycle advantage


The products which have attained the maturity stage in urban market is still in growth stage in
rural market.

7. Decision-making Units
Women in rural areas are beginning to make fast decisions for purchases. Studies reveal that
72.3% decisions are taken jointly in a family. With education and mass media, role of
children in decision making is also changing.

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RESEARCH METHODOLOGY
Research Design:
Research design is the plan for collecting the information related to the study. Research
design explains the methods that are used for collecting the information. The research design
will focus attention on the methods that are used for collection of the data.

Data Collection Method:


Secondary Data

The secondary data which is already available was only used to reach the aims and objectives
of this project. These data has been collected from various internet sites, portals and
databases for management like ProQuest and Emerald.

CONCLUSION
Thus, looking at the challenges and the opportunities, which rural markets offer to the
marketers and the manufacturers, it can be said that the future is very promising for those
who can understand the dynamics of rural markets (example companies like HLL,
Cavinkare, godrej have understood the dynamics of rural markets) and make use of them to
their best advantage. A radical change in attitudes of marketers towards the cheerful and
budding rural markets is called for, so they can successfully impress on the 750 million
rural consumers spread over approximately six hundred thousand villages in rural India.
Brands can be successful when they are closely associated with consumers and are
preferred by consumers over unbranded products. Personality factors of the brands give
consumers the means whereby they can make choices and judgments. Based on these
experiences, consumers rely on chosen brands and sense guaranteed standards of quality
and service, which augments consumer trust and brand value.

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