SUMMER PROJECT REPORT SUBMITTED TOWARDS THE

PARTIAL FULFILLMENT OF UNDER GRADUATE DEGREE IN

BUSINESS ADMINISTRATION.

RURAL
MARKETING

SUBMITTED BY :-

TUSHAR GUPTA

ASSISTANT
PROFESSOR
MR. ARPAN SINHA

BBA M&S, 20142017

A914714073

AMITY SCHOOL OF BUSINESS, NOIDA

AMITY UNIVERSITY UTTAR PRADESH

CERTIFICATE OF ORIGIN
This is to certify that I, Mr.Tushar Gupta, a student of Under Graduate Degree in BBA
M&S (2014-2017) Amity School of Business, Noida has worked under the able guidance
and supervision of Mr. ArpanSinha.

This Summer Project report has the requisite standard for the partial fulfillment the Under
Graduate Degree in Business Administration. To the best of our knowledge no part of this
report has been reproduced from any other report and the contents are based on original
research.

I am aware that in case of non-compliance, Amity School of Business is entitled to cancel

the report.

Signature
(Student)
TUSHAR GUPTA
A3914714073

Signature of Project Coordinator

(Faculty Guide)

ACKNOWLEDGEMENT

I express my sincere gratitude to my faculty guide MR ARPAN SINHA, for her able
guidance, continuous support and cooperation throughout my project, without which the
present work would not have been possible.

Signature
(Student)

TABLE OF CONTENTS

Rural Marketing
Evolution of rural marketing
Nature of rural marketing
Classification of rural consumers
Roadblocks of Indian Rural markets
Attractiveness of rural market
Rural Vs Urban Marketing
Rural consumer behavior
4 As approach of Indian Rural Market
Rural Marketing Price
Marketing strategies to capture rural market

Product strategies
Pricing strategies
Promotion strategies
Distribution strategies

2 companies practicing rural marketing in India

Conclusion
Bibliography

OBJECTIVE OF THE STUDY

To study rural marketing and its types

To study advantages, challenges of rural marketing.
To study the two companies and marketing strategies adopted by them for
rural areas .

RESEARCH METHODOLOGY
Descriptive & Exploratory Research Methodology is adapted for
this project work.
The present study is descriptive in nature, as it seeks to discover ideas and
insight to bring out new relationship. Research design is flexible
enough to provide opportunity for considering d i ffe r e n t a s p e c t s
o f p r o bl e m u n d er s t u d y. I t h e l p s i n br i n g i n g i n t o f o c u s s o m e
i n h e r e n t weakness in enterprise regarding which in depth study can be
conducted by management. Exploratory research is investigation
of relationships among variables without knowing why they are
studied. It borders on an idle curiosity approach, differing from it
only in that the i n v e s t i g a t o r t h i n k s t h er e m a y b e a p a y o ff i n
t h e a p p l i c a t i o n s o me w h e r e i n t h e f o r e s t o f questions.
1 ) S o ur c e o f d a t a c o l l e c t i o n
The data was collected from both primary and secondary sources.
Primary sources:----------Secondary sources:Websites
Magazine
5

Company record

EXECUTIVE SUMMARY

For many different businesses, Indias rural markets is the key to

future growth.
Companies that recognize this great opportunity are doing up efforts
to
gain a strong hold in these markets. Yet the high costs required to
serve rural costomers make it difficult for organizations to make a
profitable bussiness.
Research reveals that making real profits in Indias rural markets is
possible in
the short term. The key companies must make and maintain good
sales and distribution networks to rural Indias different
characteristics.
This report explains how companies can rapidly generate profits and
achieve scale by reaching, and retaining rural consumers in India.
Indias rural markets gives a chance no company can afford to
ignore. , per-capita Gross Domestic Product has grown faster in Indias
rural
areas than in its urban centers. Rural incomes are increasing, and
consumers are buying new goods and lifestyle products, including
mobile phones, television and two wheelers , rural India reached US$
70 billlion, significantly higher than the US$ 50 billion spent by urban
populations.
Companies are trying various go-to-market projets to increase their
share of this growth. But the results have been different. The study
included in-depth research with more than 30 business leaders, 15
industry gurus and mentors and a quantitative survey of 70 businesses
operating in rural Indian markets. My research shown that an efficient
sales and distribution model is the most critical factor for successful
rural growth in India. My research suggest that the challenges

experienced by companies can be classified into three major

categories reaching, acquiring Indias rural customers.
Rural attaraction have adopted new approaches to serve Indias
rural markets.
For example, they create new products and services, set pricing or
packaging. However, they have still to make profits.
New Entry companies that have recently made mark in rural
markets. Protective in nature, many of these companies have less
operations and have not generated the profit needed to create
economies of scale.
Customer reach When it comes to reaching Indias rural
customers, the biggest problem are less availability networks,
partners with limited ability, long payment cycles. Not shockingly,
respond our survey high cost to serve the rural markets as their
number-one challenge: 55 percent listed it as one of the top challenges
they face. When asked what cause the higher costs, more than 60
percent reported higher goods costs in rural areas. More than 45
percent of companies considered selecting channel partners an
additional challenge they face in getting in touch with rural customers.

Devise low-cost models for after-sales support: After-sales

support is a key for customer retention. It provides customer feedback
and market growth on channel partner performance. , after-sales
support strengthens a company rural policies, which increases
customer trust across all stages of the product lifecycle.
Focus on market expansion: Rural Masters make different policies
for thier expansion efforts. For example, they use detailed market
segmentation to understand segment- specific and best opportunities

Introduction to Rural
marketing
The term rural marketing used to be an umbrella term for the people
who dealt with rural people in one way or other. It got a separate
meaning and importance after the economic revaluation in India after
1990.
Rural marketing is defined as managing all the activities involved
in assessing, stimulating and converting the purchasing power of
the rural consumers into effective demand for specific products
and services and moving them to the people in rural areas to
create satisfaction and a better standard of living and thus
achieving organizational objectives.

It is a two-way marketing process wherein:

8

 Urban to rural - Major part of rural marketing. Includes

transactions of urban marketers who sell their goods and
services in rural areas pesticides, fertilizers, FMCG products,
tractors, bicycles, consumer durables, etc.
Rural to urban - Basically falls under agricultural marketing. A
rural producer seeks to sell his produce in urban market like
seeds, fruits and vegetables, forest produce, spices, milk and
related products, etc.
Rural to rural - Includes the activities that take place between
two villages in close proximity to each other like agricultural
tools, handicrafts, dress materials, bullock carts, etc.
It is more developmental than transactional as its nature is
more socio-cultural and economic as compared to the latter's
commercial nature.

Evolution

PHASE

ORIGIN

FUNCTION

MAJOR
PRODUCT

SOURCE
MARKET

Phase I

Before
mid1960(From
independence
to Green
revolution)

Agricultural
marketing

Agricultural
produce

Rural

Phase II

Mid sixties
(Green
revolution to

Marketing of
agricultural
inputs

Agricultural
inputs

Urban

10

Preliberalization
period)
Phase III

Mid
nineties(Postliberalization
period in 20th
century)

Phase IV 21st century

Rural
marketing

Consumables
Urban and rural
and durables
for
consumption
and production

Developmental All products

marketing
and services

Urban and rural

The objective of rural marketing in the current phase is the

improvement of the quality of lifeby satisfying the needs & wants of the
customers, not through atand-alone products or services,but by
presenting comprehensive & integrated solutions which might involve a
set of inter-related products &services.Till recently, the focus of
marketers in India was the urban consumer and by large
numberspecific efforts were made to reach the rural markets. But now
it is felt that with the tempo ofdevelopment accelerating in rural India,
coupled with increase in purchasing power, because ofscientific
agriculture, the changing life style and consumption pattern of villagers
with increasein education, social mobility, improved means of
transportations and communication and otherpenetrations of mass
media such as television and its various satellite channels have
exposedrural India to the outside world and hence their outlook to life
has also changed. Because of allthese factors, rural India in now
attracting more and more marketers.
Increase in competition, saturated urban markets, more and move new
products demandingurban customers, made the companies to think
about new potential markets. Thus, Indian ruralmarkets have caught
the attention of many companies, advertisers and multinational
companies.
According to a recent survey conducted by the National Council for
11

Applied EconomicResearch (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 the growing reach of
the television, it is nowquite easy for the marketers to capture these
markets.Rural marketing has become the latest mantra of most
corporate. Companies like Hindustan
Lever, Colgate Palmolive, Britannia and even Multinational Companies
(MNCs) like Pepsi,Coca Cola, L.G., Philips, CavinKare are all eyeing
rural markets to capture the large Indianmarket.
Coming to the frame work of Rural Marketing, Rural Marketing
broadly involves reaching therural customer, understanding their needs
and wants, supply of goods and services to meet their requirements,
carrying out after sales service that leads to customer satisfaction and
repeat purchase/sales.

Nature of Rural Market

Large, Diverse and Scattered Market:Rural market in India is

large, and scatteredinto a number of regions. There may be less
number of shops available to market products.
Major Income of Rural consumers is from Agriculture:Rural
Prosperity is tied withagriculture prosperity. In the event of a
crop failure, the income of the rural masses isdirectly affected.
Standard of Living and rising disposable income of the rural
customers:It is known that majority of the rural population lives
below poverty line and has low literacy rate,low savings etc.

12

 Changing demand pattern: Demand pattern of rural customer is

fast changing due to increasing in income and credit facilities
offered by banks like kisan credit card.
Diverse socio-economic background: This is different in different
parts of the country and brings diversity in rural markets.
Saving habits: Rural consumer is now having saving habits due to
the efforts of co-operative and commercial banks.
Traditional outlook: Rural customer values old customs and
traditions.
Low standard of living: Rural consumer have low standard living
Poor infrastructure facilities: Facilities like roads, warehouses,
communication system, etc. are inadequate in rural areas. Hence
physical distribution becomes costly.

Classification of rural consumers

The rural consumers are classified into the following groups based on
their economic status:
The Affluent Group:They are cash rich farmers and a very few in
number. They haveaffordability but not form a demand base
large enough for marketing firms to dependon. Wheat farmers in
Punjab and rice merchants of Andhra Pradesh fall in this group.
The Middle Class:This is one of the largest segments for
manufactured
goods and isfast expanding. Farmers cultivating sugar cane in UP
and
Karnataka fall in this category.
The Poor:This constitutes a huge segment. Purchasing power is
13

less,
but strengthis more. They receive the grants from government
and reap
the benefits of many suchschemes and may move towards the
middleclass. The farmers of Bihar and Orissa fallunder this
category.

Roadblocks of
Indian Rural
Markets
There are several roadblocks that make it difficult to progress in the
rural market. Marketersencounter a number of problems like dealing
with physical distribution, logistics, proper andeffective deployment of
sales force and effective marketing communication when they
enter rural markets. The major problems are listed below.
1. Standard of living: The number of people below the poverty line is
more in ruralmarkets. Thus the market is also underdeveloped
and marketing strategies have to bedifferent from those used in
urban marketing.
14

2.Low literacy levels: The low literacy levels in rural areas leads to a
problem of communication. Print media has less utility compared to the
other media of communication.
3.Low per capita income: Agriculture is the main source of income and
hence spendingcapacity depends upon the agriculture produce. Demand
may not be stable or regular.
4.Transportation and warehousing : Transportation is one of the biggest
challenges inrural markets. As far as road transportation is concerned,
about 50% of Indian villagesare connected by roads. However, the rest
of the rural markets do not even have a proper road linkage which
makes physical distribution a tough task. Many villages are locatedin
hilly terrains that make it difficult to connect them through roads. Most
marketers use
tractors or bullock carts in rural areas to distribute their products.
Warehousing isanother major problem in rural areas, as there is hardly
any organized agency to look after the storage issue. The services
rendered by central warehousing corporation andstate warehousing
corporations are limited only to urban and suburban areas.
5.Ineffective distribution channels: The distribution chain is not very
well organized and requires a large number of intermediaries, which in
turn increases the cost and creates administrative problems. Due to lack
of proper infrastructure, manufacturers arereluctant to open outlets in
these areas. They are mainly dependent on dealers, who arenot easily
available for rural areas. This is a challenge to the marketers.
6.Many languages and diversity in culture: Factors like cultural
congruence, different behaviour and language of the respective areas
make it difficult to handle the customers.Traits among the sales force
are required to match the various requirements of thesespecific areas.
7.Lack of communication system: Quick communication is the need of
the hour for smooth conduct of business, but it continues to be a far cry
in rural areas due to lack of communication facilities like telegraph and
telecommunication systems etc. The literacyrate in the rural areas is
rather low and consumers behaviour in these areas istraditional, which
may be a problem for effective communication.
15

8.Spurious brands: Cost is an important factor that determines

purchasing decision inrural areas. A lot of spurious brands or lookalikes are available, providing a low costoption to the rural customer.
Many a time the rural customer may not be aware of thedifference due
to illiteracy.
9.Seasonal demand: Demand may be seasonal due to dependency on
agricultural income.Harvest season might see an increase in disposable
income and hence more purchasingpower.
10.Dispersed markets: Rural population is highly dispersed and
requires a lot of marketing efforts in terms of distribution and
communication.

Attractiveness of rural market

1.
2.
3.
4.
5.
6.
7.
8.

Large population
Rising prosperity
Growth in consumption
Life cycle changes
Life cycle advantages
Market growth rate higher than urban
Rural marketing is not expensive
Remoteness is no longer a problem

Large Population:The rural population is large and its growth

rate is also high. Despitethe rural urban migration, the rural
areas continue to be the place of living majority of Indians.
Rising Rural Propensity:
16

INCOMEGROUP1994-95 2000-01 2006-07

ABOVERS. 100,0001.6
3.8
5.6
RS. 77,001-100,0002.7
4.7
5.8
RS. 50,001-77,0008.3
13.0
22.4
RS. 25,001-50,00026.0
41.1
44.6
RS.25,000&BELOW61.4
37.4
20.2
Thus we see that population between income level of Rs. 25,00077,000will increasefrom 34.3% in 1994-95 to 67.0% in 2006-07. The
rural consuming class is increasing byabout 3-4% per annum, which
roughly translates into 1.2 million new consumers yearly.

Growth in consumption:
PER CAPITAHOUSEHOLDEXPENDITURE(ISR S.)LEVELNO.
STATESEXPENDITURE:
LEVELS
NO.
High
(Above Rs 382/-)7Punjab

STATES
614
Kerala
Haryana
Rajasthan
Gujarat
Andhra Pradesh

Maharastra

EXPENDITURE
604
546
452
416
386

384

Average
(Rs. 382/-)5West Bengal

382
Orissa
Tamil Naidu

381
381
17

Uttar Pradesh
Karnataka
Low
(Below Rs. 382/-)3Assam

338
Madhya Pradesh
Bihar

373
365

326
289

Market growth rates higher:Growth rates of the FMCG market

and the durablemarket are higher in rural areas for many
products. The rural market share will be morethan 50% for the
products like toilet soaps, body talcum powder, cooking medium
(oil),cooking medium (vanaspati), tea, cigarettes and hair oil.
Ruralmarketing is not expensive:Conventional wisdom dictates
that since ruralconsumers are dispersed, reaching them is costly.
However, new research indicates that theselling in Rural India is
not expensive. According to one research it costs roughly
Rs.1Crore to promote a consumer durable inside a state. This
includes the expenses of advertising in vernacular newspapers,
television spots, in-cinema advertising, radio, van operations and
merchandising and point of purchase promotion. Campaign like
this, whichcan reach millions, costs twice as much in urban area.
Remoteness is no longer a problem:Remoteness in a problem but
not insurmountable. The rural distribution is not much developed
for the reasons,
Lack of proper infrastructure such as all-weather roads,
electrification and sanitation, and
Lack of marketers imagination and initiative.
Marketers have so far, failed in analyzing the rural side and exploiting
rural Indiastraditional selling system Haats&Melas.Their near
obsession with just duplicating theurban-type network and that too with
very limited success, has kept them blind to the potential of these two
18

outlets.

Rural Vs Urban Marketing

19

Special Products for Rural Markets:

Rural Transporter:Mahindra & Mahindra is busy developing the
prototype of what itcalls a Rural Transporter basically a
hybrid between a tractor and a rural transportvehicle. The
product at 20-25 HP will be targeted at those who cannot afford a
normaltractor and would also fulfill the need of family
transporter that could take in the ruralroughs but would be much
more comfortable and safer than the conventional tractor-trolley.
Sampoorna TV:LG Electronics, the Korean firm has rejigged the
TV to appeal to localneeds. It spent Rs. 21 Lacs to develop a set
that would have on-screen displays in thevernacular languages of
Hindi, Tamil and Bengali. The logic, rural consumers
20

unfamiliar with English would still be able to use the TV without

being intimidated.
Titan Watches:A recent NCAER study revealed that there is a
great potential for watchesin rural areas. In fact it is considered to
be a high priority list. It was also found that a ruralconsumer
looks for the ruggedness of the watch more than the urban
consumer does. Heprefers thick watches than slim watches.
The biggest problem that the Marketers are facing in the Rural
Markets is Of LIMITATIONS:Imitations may result in two types
of goods depending upon the purpose, commitment,
andcompetence of imitator. A poor imitator will end up in
producing deceptive, spurious, fake,copycat products. He dupes
the gullible customer by offering products having
closeresemblance with the original. In quality, it is poor cousin to
the original. On the other hand, a poor imitator may even produce
an improved version of the original product.In this scenario the
job of the Marketer becomes even more difficult in the sense that
he has notto fight other competitors but also the imitated
products.The advantages that these products enjoy in the rural
markets are that the Imitators who are inthe villages are making
these and they are offering More Margins & Better credit
Facilities.To solve this problem the Marketer has to educate the
consumer about his product and showhim the benefits of his
products over the imitated ones.

Rural consumer behavior

21

Consumer behavior in the rural market is even more perplexing

because of a singular lack of consistency in groups which are
homogeneous in parameters of demographics- Age, occupation,
education and income.
Most marketers realize that India is on the cusp of momentous change.
The economy is vibrant, incomes are rising & the habits, preferences &
attitude are changing rapidly. But no where is it more evident than in
rural India. There is, thus an emerging need to build expertise in rural
marketing.
There are three challenges that rural marketers must overcome. The
first of this is the challenges of reach-markets in the rural India that are
small & scattered making them inaccessible & unreliable or both. But
this problem is not new & many companies let it hamper them unduly
even as others overcome it with innovation. The next challenge is to
ensure that the consumers are aware of your brand and want it. The
third challenge in RM is influence.
It is an old saying that customer is the king because he is the person
whose decision have affect on the demand of any product or service. The
attitude of consumer or buyer decides how demand will emerge for a
new product & service & how existing goods and services would survive
in future and in which manner.
The study of consumer behavior implies how & why a particular
consumer reacts to the decisions of producers. The study of consumer
behavior is the study of how individual make decision to spend their
available resources (time, money, effort) on consumption related items.
It includes the study of why they buy it, when they buy it, where they
buy it, how often they buy it & how often they use it.

Stages in the buying process

22

Problem Recognition

Information search

Evaluation of alternatives

Purchase decision

Post-purchase behavior
In competitive environment one cannot thrust a product on consumer.
He has to produce what is demanded or what can be demanded. Some of
the advantage of study of consumer behavior is as under Saves from disaster.
Helps in formulating right marketing strategy.
Helps in sales promotion.
Helps in development of new products.
Helps in product orientation.
Helps consumer to study their behavior.

23

4 As approach of Indian Rural Market

1. Availability
Strive to reach at least 13 113 villages with a population market
penetration.
2. Affordability
Introduce small unit packs
3. Acceptability
Offers products and services that suit the rural market
Easy to understand
4. Awareness
One on one contact programs are extremely efficient.
Educate and try to induce trial.

AVAILABILITY:
The second challenge is to ensure availability of the product or service.
India's 627,000 villages are spread over 3.2 million sq km; 700 million
Indians may live in rural areas, finding them is not easy. Any serious
marketer must strive to reach at least 13,113 villages with a population
of more than 5,000. Over the years, India's largest MNC, Hindustan
Lever, a subsidiary of Unilever, has built a strong distribution system,
which helps its brands reach the interiors of the rural market.
For making the products available to consumers, companies adopt a
variety of means such as direct selling, using company delivery vans,
24

syndicated distribution between non-competitive marketers, setting up

of temporary stalls in rural melas or haths etc.
In the rural areas with places far flung and well connected with proper
roads, delivering the product to the rural consumers can be a challenge.
Companies have realized this and are trying to be creative in this
situation.
To service remote village, stockiest use auto-rickshaws, bullock-carts
and even boats in the backwaters of Kerela. Coca-Cola, which considers
rural India as a future growth driver, has evolved a hub and spoke
distribution model to reach the villages.

Affordability:
The first challenge is to ensure affordability of the product or service.
With low disposable incomes, products need to be affordable to the
rural consumer, most of whom are on daily wages. Some companies
have addressed the affordability problem by introducing small unit
packs. Godrej recently introduced three brands of Cinthol, Fair Glow
and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for
Madhya Pradesh, Bihar and Uttar Pradesh - the so-called `BIMARU'
States.
Hindustan Lever, among the first MNCs to realise the potential of
India's rural market, has launched a variant of its largest selling soap
brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the
rural market. Coca- Cola has addressed the affordability issue by
introducing the returnable 200-ml glass bottle priced at Rs 5. The
initiative has paid off: Eighty per cent of new drinkers
now come from the rural markets. Coca-Cola has also introduced
Sunfill, a powdered soft-drink concentrate. The instant and ready-tomix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2
and multiserve sachet of 200 gm priced at Rs 15.
The rural areas continue to pose different types of challenges, including
understanding of the dynamics of rural markets and strategies to supply
the products and safety these consumers. The consumers in rural areas
are value-conscious and a lot savvier. They are willing to pay for a
25

product if it worth it. Affordability is thus critical to success in rural

markets. As nano paradigm is emerging in all segments; small stock
keeping units (SKU), low priced products are all making various
segment of products a lot more affordable to the rural consumers. The
smaller SKUs are one of the strategies to help increase product
penetration, as trials would increase due to a lower put-down price.
Smaller packs are more affordable, so they offer consumers a change to
try out products before graduating to a larger pack. Most FMCG
companies have reduced SKU of soaps, shampoos, beverages, biscuits
and even butter to boost consumption and increase affordability for
consumers.
HULs initiated operation Bharat to tap rural markets by bringing out
low priced sample packets of its toothpaste. Fairness cream, shampoo,
cream and other products.
For Dabur, rural demand keeps on growing at a fast pace. Initiative like
low unit packs of Chyawanprash and DaburAmla, and new products
such as Amla Flower Magic hair-oil have accelerated this growth
momentum.
According to a Chennai based consumer products company CavinKare,
which makes Nyle and Chik shampoos and Fairever Fairness Cream,
governments NREGA has put a lot of money in the hands of rural
consumer, which is good news for them. CavinKaresNyle and Chik
Shampoos in Rs.1 packs are among the Companys strongest volume
drives. In the same way, LPG companies have introduce small sized
cylinders, ensuring that price remains in the affordable range markets
by reducing price of their products.
Keeping in mind the rural wallet, the telecom giant, BhartiAirtel had
lowered its tickets sizes. Instead of Rs.30 recharging coupon valid for a
month. It launched a Rs.10 coupon valid for 10 days for the rural
markets.
Idea Cellular, from the A.V Birla Group, had also introduced rural
calling card that charged only 50 paisa per minute for a local call.
Companies like Philips and even Eveready have brought out new cheap
26

lanterns to replace the kerosene ones specifically targeted at the rural

market.

ACCEPTABILITY:
The third challenge is to gain acceptability for the product or service.
Therefore, there is a need to offer products that suit the rural market.
One company, which has reaped rich dividends by doing so, is LG
Electronics. In 1998, it developed a customized TV for the rural market
and christened it Sampoorna. Because of the lack of electricity and
refrigerators in the rural areas, Coca-Cola provides low-cost ice-boxes a tin box for new outlets and thermocol box for seasonal outlets.
The insurance companies that have tailor-made products for the rural
market have performed well. HDFC Standard LIFE topped private
insurers by selling policies worth Rs 3.5 crore in total premia. The
company tied up with non- governmental organisations and offered
reasonably priced policies in the nature of group insurance covers.
There is a great need to offer products and services that suit the rural
consumers in order to obtain their acceptability. It is not just value for
money, but also value add-ons that attract the rural people and help in
gaining their acceptability for the products. Therefore, imaginative
ideas and dedicated efforts of corporate house are fast transforming the
rural landscape into big consumer markets. New paradigms in banking
like SBI Tiny Account with just a paid volunteer equipped with a small
box, which enable biometric measurement (fingerprints), and a mobile
that enable communication with the zonal office to check on available
balance is both creative as well as helpful. Mobile device companies are
also tailoring their products to the rural marketers. For instance, Nokia
had earlier launched s basic handset with a torch and an alarm clock. In
December2008, the company launched Nokia Life Tools, which is a
range of agriculture, education and entertainment services designed
especially for consumers in small towns and rural areas of emerging
27

markets. The product is meant to provide timely and relevant

information customized to the users location and personal preference
directly on their mobile services. Companies are designing products
especially for the rural markets. LG Electronics development a
customized T.V., christened as Sampoorna for the rural markets. The
company managed to sell 100000 sets in the first year. Samsung to
introduce stabilizer-free operations in its direct-cool refrigerators to
take care of voltage fluctuations and silver-nano features in
semiautomatic washing machines for use in areas, where the water
quality is not good. Both the telecom companies-BhartiAirtel and Idea
Cellular apart from providing services message in the local lingo of the
subscriber, also provide alerts on commodity prices at the nearest
wholesale market and even English language tutorials. The most
popular value-add services is music, especially in the local dialect of the
subscriber. Tata Chemicals newly launched water purifier, Swach,
targets the lower-income group in rural India and aims to resolve one of
the crucial issues plaguing India, i.e., access to clean drink water. Tata
chemicals plans to sell Swach as fast-moving-consumer-goods (FMCG)
studies reveal that 75 percent of the rural population does not have
access to pure drinking water leading to high incidence of water borne
diseases and Tata Group is going to address this issue through Tata
Swach, which is manufactured using nano technology. Companies like
Nestle and GlaxoSmithKline consumer Healthcare (GSK) too have
launched products especially for rural markets. Swiss Foods Company;
Nestle and also announced the launched of a low-priced variant of
Maggi noodles under its flagship Maggi Instant Noodles, aimed at meals
for the bottom of pyramid consumers. The new Maggi variants have
been developed especially for the rural and semi-urban markets in
order to provide low-cost fortified meals for consumers. While Rasile
Chow is gravy noodles at Rs. 4, Maggi Masala Magic is a taste
enhancer in a single use sachet priced at Rs. 2 each. In some way,
GlaxoSmithKline is rolling out Asha, a milk food drink in the line of
Horlicks for rural consumers in Andhra Pradesh. GlaxoSmithKlines
Asha, which is 40 percent cheaper than the regular variant of
Horlicks, is the first product from the UK based MNC designed for
28

rural consumers. Coca Cola has begun selling a power-based fortified

beverage called Vitigo in 18 gm sachets at Rs.2.50 each across village
in Orissa. The Company has tied up with NGO and micro finance
institution BISWA in Orissa for the same.

AWARENESS :-

Mass media is able to reach only to 57% of the rural population.

Creating awareness then, means utilizing targeted, unconventional
media including ambient media .For generating awareness, events like
fairs and festivals, Haats, etc., are used as occasions for brand
communication. Cinema vans, shop-fronts, walls and wells are other
media vehicles that have been utilized to increase brand and pack
visibility. innovative media used by personal wash like Lux and
Lifebuoy and fabric wash items like Rin and Wheel. Idea was to
advertise not only at the point of purchase but also at the time of
consumption. With large parts of rural India inaccessible to
conventional advertising media - only 41 per cent rural households have
access to TV - building awareness is another challenge. However, the
rural consumer expressions differ from his urban counterpart. Outing
for the former is confined to local fairs and festivals and TV viewing is
confined to the
state-owned channels. Consumption of branded products is treated as a
special treat or indulgence.

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Hindustan Lever relies heavily on its own company- organised media.

These are promotional events organised by stockists. Godrej Consumer
Products, which is trying to push its soap brands into the interior areas,
uses radio to reach the local people in their language.
Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per
cent of rural households. Since price is a key issue in the rural areas,
Coca-Cola advertising stressed its `magical' price point of Rs 5 per
bottle in all media.LG Electronics uses vans and road shows to reach
rural customers. The company uses local language advertising. The key
dilemma for MNCs eager to tap the large and fast-growing rural
market is whether they can do so without hurting the company's profit
margins. In case of nestle, company's product portfolio is essentially
designed for urban consumers which cautions companies from plunging
headlong into the rural market as capturing rural consumers can be
expensive.
Creating brand awareness through appropriate media is very important
for the companies to gain acceptability among rural folks. The
Corporate Sector has also utilized traditional arts of India very effective
in its awareness campaigns in rural areas. For its entry into Andhra
Pradeshs interior, telecom company, Idea Cellular used the folklore art
form of Burra Katha (a travelling theatre troupe) to create brand
awareness. Modern media such as television has also invaded rural
India by reaching every nook and corner of the country. Television has
reduced the resistance to change by creating new aspirations and
awareness for rural folks, thereby increasing the acceptability of most
products in rural areas. Once acceptability is established and loyalties
are formed, the fame of the products spread like wildfire through wordof- mouth, which in fact is the most effective means of promotion in
rural India. Various brands have leveraged on the television penetration
in rural areas. The Gold Plus jewellery brand by Tata Group is a
fascinating examples of the brand addressing the non-metro jewellery
culture. On rural India, gold jewellery is used as a reserve store and
given the adulteration in gold; Tata seal of good faith is taking the
brand far and wide. The telecom sector has also focused its strategies
towards making serious inroads into rural India. The rural thrust has
30

not only helped the sector escape the slowdown, but also allowed it to
flourish. The telecom sector has carved a prominent model that is
shifting focus to rural areas as majority of the players are expanding
their rural infrastructure base for boosting organic growth. Telecom
Company, Tata Teleservices has planned a fresh marketing strategy of
going door-to-door and even involving gram panchayats to impress
upon people, the benefits of mobile telephony. The FMCg companies are
also venturing into the rural markets with their innovative strategies to
create &Gamble, Colgate, Godrej and Maricos are gearing up for
bigger advertisement and sales promotion campaigns targeted at rural
markets to create brand awareness. Automobile sector is also giving
extra attention to rural marketers as a considerable chunk of their
product line such as commercial vehicles; tractors, motorcycle etc. are
catering specifically to the demand. Automobile companies are also
being assisted in this rural push by their growing partnerships with
public sector banks, all of which enjoy a good presence in the rural belt
and have a ready list of potential customers.

Rural Marketing Pricing strategy

Financing at low interest- This strategy is widely applied
by marketers in urban area and is equally suitable for rural India.
Consumers purchases high priced consumer durables under finance
schemes and make the payment usually on monthly basis called as
EMI. What the companies do in such pricing strategy is that instead of
reducing the price of product, they charge lesser or zero interest. In
rural India, financing at low or zero interest can persuade customers to
purchase consumer durables like television, washing machine etc.

Increasing the term of payment of loan- Banks that

grant loans to consumers for the purchase of expensive consumer
durables can increase the time period for repayment of loan.
Consumers often worry less about the cost (the interest rate) of a loan
31

and more about whether they can afford the monthly payment.As
banks increases the term of payment of loan, consumers are encouraged
to purchase consumer durables and can pay back the loan over a longer
period of time which decreases the monthly amount.

Keep it simple- the key mantra- Too much of complex

and sophisticated products and its packaging adds up to the total cost of
the products. In other words, marketers should avoid unnecessary frills
and fancies as such things increases the cost of the end product.

Positioning of the product- Positioning refers to creating

favorable image in the mind of customers regarding the product or
service. Even in case where the price of consumer durables are kept
high by the marketer, positioning the product as value for money and
relating the high price with the quality can justify the high price of the
product and can push-up the sales.
Use of emotional appeal- As the psychological characteristics of
the rural consumer from that of urban consumer significantly differs,
the positioning that is done by the marketer in urban area can not be
always successful in rural region. In urban area people aspires for high
quality of products as they their income level rises. On the other hand,
rural folks are more often driven by the emotions than aspirations. The
marketer by inculcating emotional appeal in the product can again give
good reason for high price of the product.

Flow of income and Consumption basket

pricing- A farmer has a pool of money after harvesting of crops and
generally goes for the purchase of the consumer durables after
harvesting. Pricing is thus, determined not only by the level of income of
the target consumers but also influenced by the time when consumer
has surplus income.

Psychological pricing- A common pricing

strategy- In psychological pricing, marketer plays the trick with
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consumers psychology by pricing the product for Rs.99 or Rs.195 or

Rs.999 and so on. In urban India, people has now started understanding
this clever pricing strategy adopted by the marketer but in rural India
this pricing strategy can still be adopted as people there are still not
much aware about the tactic that works behind this kind of pricing.
This strategy serves mainly two purposes. Firstly, customer may
consider the product affordable if he perceives that it priced within his
budget. Product priced at Rs.999 may fall within budget but if priced at
Rs. 1010 may be perceived as costly. Secondly, customers feel delighted
if they get back some change.

Marketing strategies to capture rural market

Product strategies
A prime need for any firm to emerge as a strong player in the rural
market is by carefully identifying gaps in the rural market and crafting
the right product offering for consumers. Chalking out a product
strategy for rural market differs in many aspects when compared to
urban counter parts. Needs and demand of rural consumer might be
contrasting to that of urban consumer and therefore its necessary to hit
the right chord when entering the rural market. The prime objective is
to design products to suit rural requirements.
Conventional wisdom on rural marketing states that the needs of the
rural consumers are similar to those of the urban consumers. Hence, the
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products made to urban specifications should suit the requirements of

the rural consumers. However, this is not true in many cases, as there is
a market difference between rural and urban environments. For
instance, Kerosene or LPG gas stoves, where the flame can be
controlled, are used for cooking in urban areas, while an open fire or
Chulha is used in rural areas. Pressure cookers with handles on one
side suit the urban consumers, but not the rural consumers for use on
an open fire or a chulha. Perhaps, a wide-bodied cooker within
handles on opposite sides may suit rural requirements. Therefore, while
designing and developing products, the requirements of the rural
consumers are to be considered and rural-specific products developed.
Though marketers are still trying and experimenting ways to
successfully tap the rural arena, below are few product strategies which
have been widely adopted and have proved themselves to work in the
rural landscape:
Small unit packing: This method has been tested by products life
shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth
paste, etc. Small packings stand a good chance of acceptance in rural
markets. The advantage is that the price is low and the rural consumer
can easily afford it.
Another example is the Red Label tea Rs. 3.00 pack which has more
sales as compared to the large pack. This is because it is very affordable
for the lower income group with the deepest market reach making easy
access to the end user satisfying him. The small unit packings will
definitely attract a large number of rural consumers.
New product designs: Keeping in view the rural life style the
manufacturer and the marketing men can think in terms of new
product designs.
For e.g. PVC shoes and chappals can be considered sited ideally for
rural consumers due to the adverse working conditions. The price of
P.V.C items is also low and affordable.
Sturdy products: Sturdiness of a product is an important factor for
rural consumers. The experience of torch light dry battery cell
manufacturers support this because the rural consumers preferred dry
battery cells which are heavier than the lighter ones. For them, heavier
weight meant that it has more over and durability. Sturdiness of a
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product either or appearance is an important for the rural consumers.

Utility oriented products: The rural consumers are more concerned
with utility of the product and its appearance Philips India Ltd.
Developed and introduced a low cost medium wave receiver named
BAHADUR during the early seventies. Initially the sales were good but
declined subsequently. On consumer research, it was found that the
rural consumer bought radios not only for information and news but
also for entertainment.
Brand name: For identification, the rural consumers do give their own
brand name on the name of an item. The fertilizers companies normally
use a logo on the fertilizer bags though fertilizers have to be sold only on
generic names. A brand name or a logo is very important for a rural
consumer for it can be easily remembered.

Promotion strategies
Elements of promotion-The various elements of promotion include
personal selling, publicity, sales promotion and advertising. Advertising
as an element of promotion and a tool of marketing communication is
discussed exclusively in the chapter rural marketing communication.
in this chapter the other elements of the promotion are discussed.
Personal selling- It is the face to face interaction between the salesman
and the prospective customers. Through a proper training, a salesman
can be an effective medium between the marketer and the prospective
customer and can covert him into a real one. A good salesman is the one
who has the through knowledge about the companys product and tries
to strike a match between the product and the customer needs. A
35

complete product knowledge being the main requisite for a good

salesman thus forms the basis of the successful salesman.
Personal selling in rural region- It is often argued that personal selling
is not feasible in rural areas because of various reasons ranging from
scattered population to large number of villages to be covered. Though
still not a prevalent practice adopted by the national level marketers,
personal selling is widely done by the local manufacturers of utensils,
garments, edible good and the likes. For the marketer to adopt personal
selling as a tool of promotion in rural area, following are few of the
basic requirements that need to be present in his salesmanFamiliarity with the rural area- It is imperative for the salesman to be
familiar with rural area. As the population of rural region is scattered, it
becomes lot more important for the salesman to have knowledge about
rural area which he is supposed to cover.
Proficiency in local language- Fluency in the local or the regional
language is another principal skill that must be present in the salesman.
In absence of know-how of local language, it acts as a major
communication bottleneck in converting prospective customer into an
actual one. Acquaintance with the rural folks- It is a common tendency
among people that they pay attention to those people whom they are
familiar with or consider as a part of their social group.
Thus, if salesman belongs to the particular rural district, in that case his
job not only becomes easy but chances of success in achieving his sales
target increases manifold times.
Be persuasive but not pushy- A good salesman is one who is persuasive
but not pushy. Rural people are always skeptical about the new product
and hesitate to purchase it. Here a salesman needs to remove the doubts
of the prospective customer and persuade him to purchase the product.
But being too pushy in his approach can ruin the chances of sale of the
product.
Publicity/ public relations- Public relations in case of marketing in
rural areas are highly important so as to nurture the relationship with
the newly acquired customers. Also, dissemination of information
36

concerning the welfare of the rural folk is possible only through the
building of effective public relations. Educating rural people about the
importance of administering polio drops to children, vaccination to
mother and child, sanitation, hygiene etc. has become possible only
through the publicity campaigns.

Distribution strategies
In our last post we talked about Product Strategies one can adopt while
managing business in the rural markets. However, at most of the time its
the distribution which acts as a limiting factor in growth of the business
in rural areas. Let us see some successful distribution strategies for the
rural market.
One important point to be kept in mind while formulating specific
strategies for distribution in rural areas is the characteristic of the
product Consumable or Durable i.e. the shelf life of the product.
Perishable items need a robust logistics plan for effective distribution
compared to non-perishable items.
Below is how companies have succeeded in the reaching out to their
audience in rural areas:
37

Segment villages before expanding: With numerous villages in India, it

is impossible for an organization to hit the rural market all at once.
Ideally, coverage of villages with up to 2000 and above population could
be the break-even point for a distribution set-up. By doing so the
percentage of villages covered comes to only 10%, however the
percentage of all the rural population covered will be substantial.
Use of co-operative societies: There are over 3 lacks co-operative
societies operating in rural areas for different purposes like marketing
cooperatives, farmers service cooperatives and other multi-purpose
cooperatives. These cooperatives have an arrangement for centralized
procurement and distribution through their respective state level
federation.

Utilization of public distributory system: The PDS in the country is

fairly well organised. The revamped PDS places more emphasis on
reaching remote rural areas like the hills and tribals. The purpose of
PDS is to make available essential commodities like food grains, sugar,
kerosene, edible oils and others to the consumers at a reasonable price.
The shops that distribute these commodities are called fair price shops.
These shops are run by the state civil Supplies Corporation, cooperatives as well as private entrepreneurs. Here again there is an
arrangement for centralized procurement and distribution.

Utilisation of multi-purpose distribution centres by petroleum/oil

companies: In order to cater to the rural areas the petroleum/oil
companies have evolved a concept of multi-purpose distribution centres
in rural areas. In addition to petrol/diesel, lubricants, these outlets also
stock consumables agricultural inputs like fertilizers, pesticides and
seeds. It is estimated that there are about 450 such outlets in operation
in the country. The rural consumer who has tractors, oil-engine pump
sets and mopeds frequent these outlets for their requirement. These
outlets can be profitably utilized for selling consumables and durable
items also.
5 Distribution upto feeder markets/mandi towns: Keeping in view
the hierarchy of markets for the rural consumers, the feeder
38

markets and mandi towns offer excellent scope for distribution.

The rural customers visit these towns at regular intervals not only
for selling the agricultural produce but also for purchasing cloth,
jewellery, hardware, radios, torch cells and other durables and
consumer products. From the feeder markets and mandi towns
the stockist or wholesaler can arrange for distribution to the
village shops in the interior places. This distribution can be done
by mopeds, cycles, bullock-carts, camel-backs etc. depending
upon the township.

2 companies practicing rural marketing in India

DABUR

39

Dabur is the worlds largest Ayurveda and natural healthcare company.

With annual revenues in excess of US$1 billion and market
capitalization of US$4 billion, it is Indias fourth largest fast-moving
consumer goods enterprise. Daburs offerings are very popular in rural
markets. Products such as Chyawanprash, Amla Hair Oil and Hajmola
Digestives were developed based on insights the company gleaned about
rural consumers.
Sales in rural regions are particularly important to Dabur. In fact,
about 47 percent of its sales in terms of consumption comes from rural
markets with populations smaller than 50,000. Although the company
ranks third among rural players, only 31 percent of its rural sales come
through direct distributor networks. Dabur needed to increase its direct
reach to boost rural market revenue and build distribution for higher
margin categories including fruit juice, oral care and home care.
To expand its reach, Dabur launched Project Double in 2010. The
projects goals were to double rural market revenue and increase
penetration of non-passive distributed categories. The initiative targeted
villages with more than 3,000 inhabitants, a market no other FMCG
company was reaching directly. To begin, Dabur focused on highpotential districts of 10 focus states, including Uttar Pradesh and
Maharashtra, which contributed 72 percent of rural FMCG potential.

Barriers to Scale
40

Inadequate distribution structure: Daburs organization and

distribution structure for urban markets was inadequate for rural
distribution. The company was structured into three broad verticals
home and personal care, healthcare and foods with a dedicated sales
team for each in urban markets. For rural distribution, the structure
would dilute economies of scale, since multiple salespeople from the
company would be approaching the same rural outlet. Reaching the
local level through local operators rather than service providers from
outside was another challenge. Rural trade ecosystems were so locally
specific that a local distributor was necessary, even though their use in
large numbers would be costly.
Pressure to generate incremental revenues: Indias rural landscape is
dispersed, and economic potential differs significantly across that
landscape. Southern Maharashtra is quite prosperous, for example.
From historical sales, however, Dabur knew that some districts in that
state would never deliver the expected return on investment. A one-sizefits- all approach for a state would never work. The company had to be
selective about areas within each state. Dabur also had to generate
incremental revenue through rural outlets, where it was already a
strong player. The company had to increase village- level consumption
to boost outlet sales beyond what current efforts were achieving without
Project Double. Dabur also had to recruit employees willing to work
and travel in remote areas.
Limited demand for high- margin categories: Another hurdle the
company faced was the need to successfully market high-margin
categories to justify the additional cost of a direct rural sales channel.

Strategies for Success

Prioritizing markets through GIS technologies: Project Double was
divided into two phases. Phase 1 was launched in UP and Maharashtra
to validate the sustainability of the idea. In Phase 2, Dabur focused on
the remaining eight states it had targeted and used lessons from Phase 1
to guide efforts. The initiative began by prioritizing 287 districts. Using
a GIS tool, the team could select districts based on characteristics such
as presence of a bank, per- capita income and population. Each month,
41

the distribution network received a fresh cluster of new targets, and

route- planning software optimized work across geographies. Modifying
distribution structure to improve reach: To structure its distribution
and avoid multiple company contacts at a single outlet, Dabur decided
to use one umbrella for all its categories and developed a two-layer
distribution structure

Impact
Within a year and a half, Project Double has reached 24,000 of the
targeted 33,000 villages with populations of more than 3,000 in the top
10 states. In a mature state such as Maharashtra, the program has
garnered 100 percent coverage in villages with more than 3,000
residents and has made inroads into villages with less than 3,000 in
high-potential districts. In the current year, the rural business for
Maharashtra is growing at a rate more than 50 percent higher than
urban markets and has been outperforming urban markets for three
consecutive years. Expanding coverage in villages with 3,000-plus
residents has driven fast-paced growth. Rural growth indexed
to urban growth was 135 versus 100. Planned sales revenue has more
than doubled, and gross margins have improved through a significantly
better product mix.

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IDEA CELLULAR
Idea Cellular is Indias third- largest mobile provider and ranks in the
top 10 country operators in the world. The company faced intense
competition in urban markets, where more than ten players were
fighting for customers and market share of six players was substantial.
Penetration or teledensity in most urban cities is more than 100 percent.
In some highly competitive markets, it exceeds 150 percent. Urban
market customer acquisition costs were climbing, because of mounting
channel costs and higher churn driven by a growing choice of providers
and low switching costs. Rural markets, on the other hand, had only 40
percent penetration and less competition than in urban markets. In
order to encourage telecommunication companies to expand network
coverage into remote rural areas, the government established an
Universal Services Obligation fund scheme dedicated to building towers
and other infrastructure in such areas.The scheme envisaged giving
incentives in the form of subsidy to Telcos to set up and use this
infrastructure and reach under-penetrated rural markets. Idea bid and
won this tender across 27 rural clusters of the country without asking
for any subsidy. Idea had always been keen to focus its attention to rural
India and the opportunity for growth that it provided.

Barriers to Scale
Daunting operating costs: The monthly cost to operate a rural site is
nearly 15 percent higher than in urban areas. The higher costs result
from insufficient supplies of power and water and the need to develop
alternatives e.g. running the site on diesel. Low margins dissuading
channel partners: Traditionally, rural channel partners worked
with FMCG, automotive and durable goods companies with margins as
high as 15-20 percent (10-12 percent for the retailer and 5-8 percent for
the distributor). Entrepreneurs initially resisted the low- margin albeit
high volume telecommunications business. The additional complexity
for a distributor to collect and process forms for new customer
acquisition did not help either.

43

Low rural partner investment capability: Rural channel partners have

weaker financial capabilities than do partners in urban areas. Rural
partners are often unable to maintain large inventories of SIM cards
and paper vouchers. Infrastructure gaps: Until
a few years ago, rural India had low network coverage. Towers and
operators were few and far between. Most providers had to build their
towers. Idea also deployed its own towers in rural India in anticipation
of driving growth. A war for talent: Idea would hire and train sales
representatives only to see them move to competitors for small
incentives. As a result, talent costs were high. Non availability of outlets
in villages with low population: There continues to be many villages in
the country where there are no retail outlets, particularly in states with
a high rural population bias such as Madhya Pradesh and Chattisgarh.
Servicing rural customers in such villages pose a huge challenge.

Strategies for Success

Planning with precision: To plan its network for the rural market, Idea
made use of data analytics, including usage profile of subscribers and
operational metrics such as electricity availability and road access.
Whenever possible, Idea also entered into tower- sharing agreements to
further reduce operating costs. Creating awareness, driving demand:
Idea invested heavily in market activation and demand generation. The
company created awareness through sustained participation in village
melas and haats. Idea also deployed rural vans that served both
branding and customer acquisition needs. Vans were outfitted with
photography equipment, copiers and other tools needed to process
purchases.
Using technology to establish efficient operations: Idea developed in
house application to track and manage its dispersed sales force. An inhouse distribution management system enabled geographically distant
distributors to place orders via mobile devices or the web. Financial
transactions with distributors were automated through National
electronic fund transfer (NEFT) and Real time gross settlement (RTGS)
systems. E-topup SIMs at retail outlets helped track retail activity and
manage operations. Using son of soil talent: Named son of soil, Idea
44

recruited enthusiastic village youth from the towns where they had
installed their towers and trained them In sales processes and systems.
The intent was to replicate Ideas direct distribution model across all the
rural villages that are covered by the companys network. They
recruited only those villagers who aspired to make a difference in their
villages

. Impact
Idea has the highest share of rural subscribers (as a percentage of the
total) among Indian telecom players. Two out of every three new Idea
subscribers comes from rural or semi-urban areas. The company has
created more than 4,000 jobs and helped double the income of its rural
employees. Distributor salesmen that earned Rs 4,000 per month
(US$80) now earn Rs 10,000 (US$200). Grocery shops that offer
recharge coupons have enjoyed substantial boosts to their business
overall through increased customer traffic. By looking beyond the
government mandate to create inclusive telephony growth, Idea has
taken a clear lead in establishing a first-mover advantage.

CONCLUSION
45

By looking at the challenges and the opportunities which rural markets offer
to the marketers it can be said that the future is very promising for those who
can understand the dynamics of rural markets and exploit them to their best
advantage. 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.
The rural market is very large in compare to the urban market as well as it is
more challenging market. The consumer wants those products which are
long lasting, good, easy to use and cheaper. The income level of rural
consumers is not as high as the income level of urban consumers thats why
they want low price goods. It is one of the reasons that the sell of sachet is
much larger in the rural area in all segments.
It is necessary for all the major companies to provide those products which
are easy to available and affordable to the consumers. It is right that the
profit margin is very low in the FMCG products, but at the same time the
market size is much large in the rural area. The companies can reduce their
prices by cutting the costs on the packaging because the rural consumers
dont need attractive packaging. Application of 4A* is also a major task for
the major companies in this area.
Rural market has an untapped potential like rain but it is different from the
urban market so it requires the different marketing strategies and marketer
has to meet the challenges to be successful in rural market.

46

BIBLIOGRAPHY
BOOKS- Rural marketing by Dr C. Rajendra Kumar
Research methodology- C.R.Kothari

Journals, Newspaper and Internet

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THANK
YOU

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