Rural marketing

A DISSERTATION REPORT

To analyze the marketing of consumer products (both

durable and non durable products) in rural areas.

SUBMITTED BY:
DEVENDRA SINGH
MBA 4 sem (2008-2010)
0815270026

UNDER THE GUIDANCE OF:

MR. SANDEEP SHARMA
FACULTY

MANGALMAY INSTITUTE OF MANAGEMENT AND

TECHNOLOGY

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Acknowledgement
I consider my proud privilege to express deep sense of gratitude to
Mr. SUNDEEP

SHARMA for his admirable and valuable guidance, keen interest,

encouragement

and constructive suggestions during the course of the project.

I would also like to thank my father Mr. RAGHVENDRA SINGH

,for their

insperation and moral support received in completing this work as for

collecting t

the data i had to visit so many rural areas or villages.

Devendra singh
MBA (marketing)
4TH Semester

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TABLE OF CONTENTS

TOPIC PAGE NUMBER

EXECUTIVE SUMMARY 06

RESEARCH METHODOLOGY O8

REVIEW OF LITERATURE
11

INTRODUCTION 15

FINDINGS AND ANALYSIS 129

CONCLUSIONS 147

SUGGESTIONS AND 150

RECOMMENDATIONS

APPENDIX 151

BIBLIOGRAPHY 157

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EXECUTIVE SUMMARY
Indias way is not Europes. India is not Calcutta and Bombay.
India lives
in her seven hundred thousand
villages.....................Mahatma Gandhi, 1926

Marketing in developing countries like India have often been

borrowed from the western world. Concepts like Brand identity,
Customer relationship management, 4 Ps of the marketing mix,
Consumer behavior process; Segmentation, targeting and positioning
etc. have often been lifted straight from the marketing intelligentsia
abroad and adopted in Indian conditions, often with minimal success.
Reason lies not in the fault of such concepts, but their
integration with the Indian ethos and culture.
The rural India offers a tremendous market potential.
Nearly two-thirds of all middle-income households in the country are
in rural India and represents half of Indias buying potential. Despite,
the strong potential the rural markets are by and large less exploited.
Consider the market, out of five lakhs villages in India only one lakh
have been tapped so far. According to us if the rural market has to be
adequately tapped, there has to be a change in the way marketing
concepts learnt in B-schools with adequate adoption according to
scenarios prevalent in rural India. The paper thereby present the
modified version of Philip Kotlers famous marketing mix consisting of
4Ps. The focus is on its modification and subsequent customization to
Indian rural markets perspective. The 4Ps have to be modified to
include 1P i.e. Packaging and 1R i.e. Retailer as special focus areas.
Further to ensure the sustainability of the marketing mix two Es i.e.
Education and Empowerment have to be at the core as they help in
generating widespread participation from the rural clientele by
enhancing their standard of living. The Products in the rural market
should essentially operate at the basic and expected level of product
classification. They should essentially meet the basic needs of the
consumer and should be a no-frill product, as the consumer would not

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be valuing much any further addition to the product concept.
Companies also face a daunting task in communicating about their
products to the consumer due to lack
Of literacy and failure of traditional media to penetrate in the rural
households.

Hence, the advertising mix has to be more towards non-conventional

yet effective
medium like Puppetry, Folk Theater Song, Wall Painting,
Demonstration, Posters, Agricultural Games, NGOs network, etc. Thus
overall either the product or communication or preferably both need
to be customized to target the rural customer.
In terms of physical distribution due to lack of infrastructure the
costs are very exorbitant to reach the rural customer. Thus, mediums
like rural marketing vehicles and melas and haats provide better
opportunities to meet customer needs. Also the existing distribution
would need a transformation to achieve the required penetration
levels as success of Project Streamline of HLL has shown. Since, the
value for money concept is more important rural customers, there has
to be an approach of treating customer as budget seeking consumer.
Here, fitting the consumer needs into an affordable price point is
pursued first and then other features of product are fitted in. Similarly,
packaging has to meet customer needs of better brand recall and
introducing favorable price points. At the same time the importance of
retailer has to be recognized where he is one of the most major
influencer is customers decision making process. He acts as the friend
and guide in this process and hence, needs to be managed effectively
through promotion programmes and incentives to promote the brand
of a company. In order to bridge the gap between Philip Kotler and
countryside Indian what is needed the appreciation of unique features
of rural India and thus, responding to them by making adequate
improvements in the application of the marketing concepts learnt in
the class.
For achieving the desired results of capturing the
rural customer a comprehensive approach to the traditional marketing
concepts has to be taken. This marketing mix has to be responsive to
customers needs and fit into his life as a tool of self-enhancement. To
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be successful the concept of marketing has to be taken in conjunction
with its economic, psychological and social implications.

RESEARCH METHODOLOGY
OBJECTIVES OF THE STUDY:
Any task without sound objectives is like Tree without roots.
Similarly in case of any research study undertaken, initially the
objectives of the same are determined and accordingly the further
steps are taken on. A research study may have many objectives but
all these objectives revolve around one major objective which is the
focus of the study. In this study, the focus is on the emergence of
Rural markets as the most happening market on which every marketer
has an eye. And so this study will be based on studying the
emergence of rural market in various contexts.
The main objective of the study is to analyse and present the
marketing of consumer products in rural areas. The following
objectives have been set forth. They are to:

1) Present a rural marketing perspective.

2) Present a profile of Indian Rural market.
3) Study and analyse the consumer behavior in rural areas.
4) Examine the product and brand penetration in rural markets.
5) Analyze marketing of consumer product in rural markets.
6) Present marketing strategy frame for marketing consumer
products in rural areas.
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SCOPE OF THE STUDY:
The study is restricted to selected districts of UTTAR PRADESH.
Further, product and brand penetration is examined. As regards
marketing of consumer products in rural areas, the study analyzes
products from non durable category ( a bathing soap, detergents, tea,
coffee, shampoo) and from durable category ( a wrist watch,
television, refrigerator, fan and bicycle).

Data collection

Sample unit:
1. working people (including men &women), basically farmers.
2. college students
3. school students
4. senior citizen

Sample size:
1. working people:32%
2. college students:29%
3. school students:23%
4. senior citizens:16%

Sampling region:
1. I have selected uttar pradesh, of Uttar Pradesh as the area of
study.
2. I have chosen BHOWAPUR, MORTI, SHAHPUR and ATTOR as
areas of research.
The population status of these areas can be shown in a
tabulated manner, which is given as follows:

Area Population
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BHOWAPUR 2500
MORTI 3000
SHAHPUR 5000
ATTOR 4000

Data collection method:

1.Primary data: it will be collected with the help of a self
administered questionnaire. This questionnaire aims to gather
information related to various Branded products.

Questionnaire design:
As the questionnaire is self administrated one, the survey is kept
simple and user friendly. Words Used in questionnaire are readily
Understandable to all respondent. Also technical jargons are avoided
to ensure that there is no confusion for respondents.

2.Secondary data: it will be collected with the help of books,

research papers, magazines, news papers, journals, Internet, etc.

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Review of Literature
Rural market is one of the best opportunities for the FMCG sector. In
some sense we can say that rural market is future of FMCG.

1.Basu Purba (2004),suggested that the lifestyle of rural

consumers is changing. Rural Indian market and the marketing
strategy have become the latest marketing buzzword for most of the
FMCG majors. She added the strategies of different FMCG companies
for capturing rural market like Titans Sonata watches, Coco Colas
200mlbottle, different strategies of HUL and Marico etc. She takes into
consideration the study of National Council for Applied Economic
Research (NCAER).According to the NCAER
projections, the number of middle and high-income households in
rural area is expected to grow from 140 million to 190 million by
2007.In urban India, the same is expected to grow from 65 million to
79 million. Thus, the absolute size of rural India is expected to be
double that of urban India.

2.Tognatta Pradeep (2003),suggested that ,the economic growth

in India's agricultural sector in last year was over 10%,compared with
8.5%in the industrial sector. This implies a huge market potentiality

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for the marketer to meet up increasing demand. Factors such as
village psyche,
strong distribution network and market awareness are few
prerequisites for making a dent in the rural markets. The model is of
the stolid Anglo-Dutch conglomerate Unilever Group, which has
enjoyed a century-long presence in India through its subsidiary
Hindustan Lever Ltd. It was Hindustan Lever that several years ago
popularized the idea of selling its products in tiny packages. Its
sachets of detergent and shampoo are in great demand in Indian
villages. Britannia with its low priced Tiger brand biscuits has become
some of the success story in rural marketing.

3. Dr. N. Rajendhiran(MBA, PhD)/ Mr. S. Saiganesh(MBA, MA,

M.Phil)/ Ms. P. Asha(MBA)

Prime Minister Dr. Manmohan Singh recently talked about his vision for
rural India: "My vision of rural India is of a modern agrarian, industrial
and services economy co-existing side by side, where people can live in
well-equipped villages and commute easily to work, be it on the farm or
in the non-farm economy. There is much that modern science and
technology can do to realise this vision. Rural incomes have to be
increased. Rural infrastructure has to be improved. Rural health and
education needs have to be met. Employment opportunities have to be
created in rural areas."

'Go rural' is the slogan of marketing gurus after analyzing the

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socio-economic changes in villages. The Rural population is nearly
three times the urban, so that 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. The Indian rural market today accounts for only about
Rs 8 billion of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent
of the total share. So clearly there seems to be a long way ahead.
Although a lot is spoken about the immense potential of the unexplored
rural market, advertisers and companies find it easier to vie for a share
of the already divided urban pie.

The success of a br and in the Indian rural market is as unpredictable as

rain. It has always been difficult to gauge the rural market. Many brands,
which should have been successful, have failed miserably. More often
than not, people attribute rural market success to luck. Therefore,
marketers need to understand the social dynamics and attitude
variations within each village though nationally it follows a consistent
pattern 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
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rural consumers spread over approximately six hundred thousand
villages in rural India.

RURAL INDIAa new dawn

India needs creative solutions to start a

revolution which can take its villages fast
forward in time converting them into
economically viable units and growth engines,
harnessing the power of the villagers, and
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opening up new horizons with the promise of a
better tomorrow.

INTRODUCTION
India lives in her villages.
As described by Adi Godrej, Chairman , Godrej Group
The rural consumers is discerning and the rural market is
vibrant . At the current of growth , it will soon outstrip the
urban market. The rural market is no longer sleeping but we
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are.
Before gamboling into issues like where the Indian rural
market stands and the opportunities for corporates to explore there...
let's look at the definition of urban and rural India. The Census defined
urban India as - "All the places that fall within the administrative limits
of a municipal corporation, municipality, cantonment board etc or
have a population of at least 5,000 and have at least 75 per cent male
working population in outside the primary sector and have a
population density of at least 400 per square kilometer. Rural India, on
the other hand, comprises all places that are not urban!"

In our country over 70%of the total population live in villages. There
are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural
population varies form 8 to

9 percent. Agriculture and agriculture related activities contribute to

about 75%of the income in rural areas. The general impression is that
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the rural markets have potential only for agricultural inputs like seeds,
fertilizers and pesticides, cattle feed and agricultural machinery. More
than 50%of the national income is generated in rural India and there
are opportunities to market modern goods and services in rural areas
and also market agricultural products in urban areas. Infact it has
been estimated that the rural markets are growing at fives times the
rate of urban markets. About 70% of bicycles, mechanical watches
and radios and about 60%of batteries, sewing machine and table fans
are sold in rural India. At the same time the sales of color television,
washing machines, refrigerators, shampoos, face cream, mosquito
repellent and tooth paste are very low and there is tremendous
potential for such products in rural markets.
Now for some facts and figures The Indian rural market today
accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per
cent durables sale, 100 per cent agricultural products) of the total ad
pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So
clearly there seems to be a long way ahead.

Time and again marketing practitioners have waxed eloquent about

the potential of the rural market. But when one zeroes in on the
companies that focus on the rural market, a mere handful names
come to mind. Hindustan Lever Limited (HLL) is top of the mind with
their successful rural marketing projects like 'Project Shakti' and
'Operation Bharat'. The lynchpin of HLL's strategy has been to focus
on penetrating the market down the line and focusing on price point.
Furthermore, activating the brand in the rural market through
activities, which are in line with the brand itself, is what sums up HLL's
agenda as far as the rural market is concerned informs MindShare
Fulcrum general manager R Gowthaman. Amul is another case in point
of aggressive rural marketing. Some of the other corporates that are
slowly making headway in this area are Coca Cola India, Colgate,
Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance
Corporation, Cavin Kare, Britannia and Hero Honda to name a few.

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Khaitan fans' ad on a horse Wheel's wall

cart painting

We can safely say that until some years ago, the rural market was
being given a step-motherly treatment by many companies and
advertising to rural consumers was usually a hit and miss affair. More
often than not, the agenda being to take a short-cut route by pushing
urban communication to the rural market by merely transliterating the
ad copy. Hence advertising that is rooted in urban sensitivities didn't
touch the hearts and minds of the rural consumer. While, this is
definitely changing, the process is slow. The greatest challenge for
advertisers and marketers continues to be in finding the right mix that
will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan
ad campaign succeeded in providing just that.

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Corporates are still apprehensive to "Go Rural." A few

agencies that are trying to create awareness about
the rural market and its importance are Anugrah
Madison, Sampark Marketing and Advertising
Solutions Pvt Ltd, MART, Rural Relations, O&M
Outreach, Linterland and RC&M, to name a few. Also,
the first four agencies mentioned above have come
together to form The Rural Network. The paramount
Lifebuoy's wall objective of the Network is to get clients who are
painting in looking for a national strategy in rural marketing and
rural India help them in executing it across different regions.

Interestingly, the rural market is growing at a far

greater speed than its urban counterpart. "All the data provided by
various agencies like NCAER, Francis Kanoi etc shows that rural
markets are growing faster than urban markets in certain product
categories at least. The share of FMCG products in rural markets is 53
per cent, durables boasts of 59 per cent market share. Therefore one
can claim that rural markets are growing faster than urban markets,"
says Sampark Marketing and
Advertising Solutions Pvt Ltd
managing director R A Patankar.

Coca-Cola India tapped the rural

market in a big way when it
introduced bottles priced at Rs 5
and backed it with the Aamir Khan
ads. The company, on its behalf, "Yaara da Tashan..." McCann
has also been investing steadily to Erickson's ads with Aamir Khan
build their infrastructure to meet created universal appeal for
the growing needs of the rural Coca Cola
market, which reiterates the fact
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that this multinational has realised the potential of the rural market is
going strength to strength to tap the same.

In 2000, ITC took an initiative to develop direct contact with

farmers who lived in far-flung villages in Madhya Pradesh.
ITC's E-choupal was the result of this initiative.

Clearly the main challenge that one faces while dealing with rural
marketing is the basic understanding of the rural consumer who is
very different from his urban counterpart. Also distribution remains to
be the single largest problem marketers face today when it comes to
going rural. "Reaching your product to remote locations spread over
600,000 villages and poor infrastructure - roads, telecommunication
etc. and lower levels of literacy are a few hinges that come in the way
of marketers to reach the rural market," says MART managing director
Pradeep Kashyap.

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Citing other challenges in rural marketing, Patankar says, "Campaigns
have to be tailor made for each product category and each of the
regions where the campaign is to be executed. Therefore a thorough
knowledge of the nuances of language, dialects and familiarity with
prevailing customs in the regions that you want to work for is
essential. The other challenge is the reach and the available means of
reaching out to these markets, hence the video van is one of the very
effective means of reaching out physically to the rural consumers."

The fact of the matter remains that when compared to the Indian
urban society, which is turning into a consumerism society; the rural
consumer will always remain driven by his needs first and will
therefore be cost conscious and thrifty in his spending habits.
"Decision-making is still conscious and deliberated among the rural
community. But nevertheless, the future no doubt lies in the rural
markets, since the size of the rural market is growing at a good pace.
There was a time when market predictions were made on the basis of
the state of the monsoon but this trend has changed over the years;
there is a large non farming sector, which generates almost 40 per
cent of the rural wealth. Hence the growth in the rural markets will be
sustained to a large extent by this class in addition to the farmer who
will always be the mainstay of the rural economy," affirms Patankar.

"Although the melting of the urban - rural divide will take a while, this
is not for want of the availability of the means but for want of the rural
consumer's mindset to change; which has its own logic, which is
driven by tradition, custom and values that are difficult to shed," he
points out.

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Fulcrum's Gowthaman says, "The
biggest impending factor or
deterrent on rural monies going
up is that there is a general sense
of trying to benchmark cost per
contact (CPC). The television CPC
Satellite dish antennas reach
is going to anyways be cheaper to
rural India
rural CPC and unless and until the
volume - value equation turns the
other way round, you will not be able to spend disproportionate
monies in the rural market."

For HLL, a one rupee or a five rupee sachet or

the Kutti Hamam (the small Hamam) helps in
giving the consumers a trial opportunity. While
it does help in generate volume but not in
terms of values. "Till the time that volume -
value equation is managed better, the CPC is
preventing anybody to look at rural at a large
scale activation programme," reiterates
Typical shop in rural Gowthaman.
India stocked with
Ultimately, the ball lies in the court of rural
sachets, etc
marketers. It's all about how one approaches
the market, takes up the challenge of selling
products and concepts through innovative media design and more
importantly interactivity.

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Anugrah Madison's chairman and managing director RV Rajan sums
up, "There is better scope for language writers who understands the
rural and regional pulse better. I also see great scope for regional
specialists in the areas of rural marketing - specialists like Event
Managers, Wall painters, folk artists, audio visual production houses.
In fact all those people who have specialised knowledge of a region
are bound to do well, thanks to the demands of the rural marketers."

So the fact remains that the rural market in India has great potential,
which is just waiting to be tapped. Progress has been made in this
area by some, but there seems to be a long way for marketers to go in
order to derive and reap maximum benefits. Moreover, rural India is
not so poor as it used to be a decade or so back. Things are sure a
changing!

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INDIA INFRASTRUCTURE
The best barometer of countrys economic standing is measured by its
GDP. India, the second most populated country of more than 1100
million has emerged as one of the fastest growing economies. It is a
republic with a federal structure and well-developed independent
judiciary with political consensus in reforms and stable democratic
environment .In 2008-09 Indias economy-GDP grew by 6.5% due to
global recession. In the previous four years,economy grew at 9%.The
Indian economy is expected sustain a growth rate of 8% for the next
three years upto 2012. With the expected average annual
compounded growth rate of 8.5%, India's GDP is expected to be USD
1.4 trillion by 2017 and USD 2.8 trillion by 2027. Service sector
contribute to 50% of Indias GDP and the Industry and agriculture
sector 25% each.

Investment Opportunities In Indian Infrastructure

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The robust current growth in GDP has exposed the grave inadequacies
in the countrys infrastructure sectors. The strong population growth in
India and its booming economy are generating enormous pressures to
modernize and expand Indias infrastructure. The creation of world
class infrastructure would require large investments in addressing the
deficit in quality and quantity. More than USD 475 bn worth of
investment is to flow into Indias infrastructure by 2012. No country in
the world other than India needs and can absorb so many funds for
the infrastructure sector. With the above investments Indias
infrastructure would be equal to the best in the world by 2017.

In the next five years planned infrastructure investment in India in

some key sectors are (at current prices): Modernization of highways
-US$ 75 billion, Development of civil aviation US$ 12 billion,

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Development of Irrigation system- US$ 18 billion, Development of
Ports-US$ 26 billion, Development of Railways- US$ 71 billion,
Development of Telecom- US$ 32 billion, Development of Power -US$
232 billion. Thus in the eleventh five year plan ,investment in the
above sectors (Aviation infrastructure ,Construction infrastructure,
Highway infrastructure ,Power infrastructure, Port infrastructure
,Telecom infrastructure ) will be US$ 384 billions(Rs 17,20,000 Crores)
considering the huge infrastructure market potential in India. In
addition to the above, investments to the tune of US$ 91 billions have
been planned in other infrastructure sectors like Tourism
infrastructure ,Urban infrastructure ,Rural infrastructure, SEZs ,and
water infrastructure and sanitation infrastructure thus making the
total infrastructure investments in the eleventh plan period 2007-08 to
2011-12 as US$475 billions. Domestic and global infrastructure funds
have exposure to Indian infrastructure sectors.

Rural Marketing
Rural marketing involves the process of developing, pricing,
promoting, distributing rural specific product and a service leading to
exchange between rural and urban market which satisfies consumer
demand and also achieves organizational objectives.

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URBAN RURAL

RURAL URBAN

RURAL RURAL

It is a two-way marketing process wherein the transactions can be:

1. Urban to Rural: A major part of rural marketing falls into this

category. It involves the selling of products and services by
urban marketers in rural areas. These include: Pesticides, FMCG
Products, Consumer durables, etc.
2. Rural to Urban: Transactions in this category basically fall
under agricultural marketing where a rural producer seeks to sell
his produce in an urban market. An agent or a middleman plays a
crucial role in the marketing process. The following are some of
the important items sold from the rural to urban areas: seeds,
fruits and vegetables, milk and related products, forest produce,
spices, etc.
3. Rural to Rural: This includes the activities that take place
between two villages in close proximity to each other. The
transactions relate to the areas of expertise the particular village
has. These include selling of agricultural tools, cattle, carts and
others to another village in its proximity.

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Rural marketing requires the understanding of the complexities. Indian

agricultural industry has been growing at a tremendous pace in the
last few decades. The rural areas are consuming a large number of
industrial and urban manufactured products. The rural agricultural
production and consumption process plays a predominant role in
developing the Indian economy. This has designed a new way for
understanding a new process called Rural Marketing.
The concept of rural marketing has to be distinguished from
Agricultural marketing. Marketing is the process of identifying and
satisfying customers needs and providing them with adequate after
sales service. Rural marketing is different from agricultural marketing,
which signifies marketing of rural products to the urban consumer or
institutional markets. Rural marketing basically deals with delivering
manufactured or processed inputs or services to rural producers, the
demand for which is basically a derived outcome.

Rural marketing scientists also term it as developmental

marketing, as the process of rural marketing involves an urban to rural
activity, which in turn is characterised by various peculiarities in terms
of nature of market, products and processes. Rural marketing differs
from agricultural or consumer products marketing in terms of the
nature of transactions, which includes participants, products,
modalities, norms and outcomes. The participants in case of Rural
Marketing would also be different they include input manufacturers,
dealers, farmers, opinion makers, government agencies and traders.
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Rural marketing needs to combine concerns for profit with a concern
for the society, besides being titled towards profit. Rural market for
agricultural inputs is a case of market pull and not market push. Most
of the jobs of marketing and selling are left to the local dealers and
retailers.

The market for input gets interlocked with other markets like output,
consumer goods, money and labour.

INDIAN RURAL MARKET:

Rural marketing in India is not much developed there are many
hindrances in the area of market, product design and positioning,
pricing, distribution and promotion. Companies need to understand
rural marketing in a broader manner not only to survive and grow in
their business, but also a means to the development of the rural
economy. One has to have a strategic view of the rural markets so as
to know and understand the markets well. In the context of rural
marketing one has to understand the manipulation of marketing mix
has to be properly understood in terms of product usage. Product
usage is central to price,

distribution, promotion, branding, company image and more

important farmer economics, thus any strategy in rural marketing
should be given due attention and importance by understanding the

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product usage, all elements of marketing mix can be better organised
and managed.

Evolution of Rural Marketing

SOURC
DESTINATI
PHA MAJOR E
ORIGIN FUNCTION ON
SE PRODUCTS MARKE
MARKET
T

I Before
Mid-1960
Agricultur Agricultur Rural Urban
(from
al al
independe
Marketing
nce to Produce

green
revolution)
II Mid-
Sixties
Marketing Agricultur Urban Rural
(Green
Of al
revolution
to Pre- Agricultur Inputs

liberalizati al Inputs

on period)
III Mid- Consuma
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 Rural marketing
Nineties Rural bles And Urban Rural
(Post- &
Marketing Durables
liberalizati Rural
For
on period
on 20th Consumpt

century) ion &

Productio
n

IV 21st Developm All Urban Urban &

century ental products & Rural
marketing & services Rural

1.Phase I ( from Independence to Green Revolution):

Before the advent of the Green revolution, the nature of rural
market was altogether different. Rural marketing then referred to
the marketing of rural products in rural & urban products.

2.Phase II (Green Revolution to Pre-liberalization

period):
During these times, due to the advent & spread of the Green
Revolution, rural marketing represented marketing of agriculture
inputs in rural markets & marketing of rural produce in urban
areas.

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3.Phase III (Post-liberalization period on 20 th
century):
The third phase of rural marketing started after the liberalization
of the Indian economy. In this period, rural marketing
represented the emerging, distinct activity of attracting &
serving rural markets to fulfill the need & wants of rural
households, peoples & their occupations.

4.Phase IV (21st century):

Learning from its rural marketing experiences after the
independence, the corporate world has finally realized the quick-
fix solutions & piecemeal approaches will deliver only limited
results in the rural markets. And, if an organization wants to tap
the real potential of the rural market, it needs to make a long-
term commitment with this market. Its approach & strategies
must not focus in just selling products & services, but they
should also aim at creating an environment for this to happen.

The objective of rural marketing in the current phase is the

improvement of the quality of life by 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 number specific efforts were made to reach the rural
markets. But now it is felt that with the tempo of development
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 Rural marketing
accelerating in rural India, coupled with increase in purchasing power,
because of scientific agriculture, the changing life style and
consumption pattern of villagers with increase in education, social
mobility, improved means of transportations and communication and
other

penetrations of mass media such as television and its various satellite

channels have exposed rural India to the outside world and hence
their outlook to life has also changed. Because of all these factors,
rural India is now attracting more and more marketers.

Increase in competition, saturated urban markets, more and move

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

Rural marketing has become the latest mantra of most corporate.

Companies like Hindustan Lever, Colgate Palmolive, Britannia and
even Multinational Companies (MNCs) like Pepsi, Coca Cola, L.G.,
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Philips, and Calvin kare are all eyeing rural markets to capture the
large Indian market.

Coming to the frame work of Rural Marketing, Rural Marketing broadly

involves reaching the rural 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.

The Indian growth story is now spreading itself to India's hinterlands.

Rural India, home to about two-thirds of the countrys 1 billion
population, is not just witnessing an increase in its income but also in
consumption and production. The union budget for 2009-10 hiked the
allocation for the National Rural Employment Guarantee Act (NREGA)
to US$ 8.03 billion, giving a further boost to the rural economy. This is
in addition to the farmer loan waiver of US$ 13.86 billion and the
ambitious Bharat Nirman Programme with an outlay of US$ 34.84
billion for improving rural infrastructure. Additionally, the rural
economy has not been impacted by the global economic slowdown,
according to a recent study by the Rural Marketing Association of India
(RMAI). The study found that the rural and small town economy which
accounts for 60 per cent of Indias income has remained insulated
from the economic slowdown. Moreover, rural incomes are on the rise
driven largely due to continuous growth in agriculture for four
consecutive years. According to a McKinsey survey conducted in 2007,

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the rural India market would grow almost four times from its existing
size in 2007, which was estimated at US$ 577 billion.

RURAL INFRASTRUCTURE:
1) 46 percent of villages are connected by all weather roads.

2) 84 percent of villages are electrified.

3) 5700 regulated markets.

In the early 2000s, around 700 million people, i.e. 70% of the
Indian population lived in 6,27,000 villages, in rural areas. Of this,
90% were concentrated in villages with population less than 2000. 3
According to a study

conducted in 2001 by the National Council for Applied Economic

Research (NCAER), there were as many "middle income and above"
households in rural areas as there were in urban areas.

There were almost twice as many "lower income households" in rural

areas as in urban areas. There were 2.3 million "highest income"
households in urban areas as against 1.6 million in rural areas. NCAER
projections indicated that the number of "middle income and above"
households was expected to grow to 111 million in rural India by 2007,
compared to 59 million in urban India. Gone were the days when a
rural consumer had to go to a nearby town or city to buy a branded
product. The growing power of the rural consumer was forcing big
companies to flock to rural markets. At the same time, they also threw
up major challenges for marketers.

FMCG
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 Rural marketing
There was a time when the FMCG companies ignores rural
market,they took no any interest to produced or sell products in rural
market in India.It was the initial stage of FMCG companies in India.As
per as the time had
passed,the strategy and marketing style of FMCG companies had been
changed.
The rural market is the one of the best opportunity for the FMCG
sector in the India.It is wider and less competitive market for the
FMCG.As the income level of the rural consumers increasing,the
demand of FMCG is
increasing continuously.

Top Players in FMCG Sector

1.Hindustan lever limited (HLL)
2.ITC (Indian Tobacco Company)
3.Nestle India
4.GCMMF (AMUL)
5.Dabur India

6.Asian Paints (India)

7.Cadbury India
8.Britannia Industries
9.Procter &Gamble Hygiene &Health Care
10.Marico Industries

Secondary Players
1.Colgate-Palmolive (India)Ltd.
2.Godrej Consumers Product Ltd.
3.Nirma Ltd.
4.Tata Tea Ltd.
5.Parle Agro

Rural consumers spend around 13 per cent of their income, the

second highest after food (35 per cent), on fast moving consumer
goods (FMCG), as per a RMAI study.

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 Rural marketing
The FMCG industry in India was worth around US$ 16.03 billion in
August 2008 and the rural market accounted for a robust 57 per cent
share of the total FMCG market in India.

The FMCG sector saw rural markets post 20 per cent growth, ahead of
the 17-18 per cent growth from urban India, aided by three years of
good monsoon, higher prices of farm produce and farm-loan waiver.

Most FMCG companies are now working on increasing their

distribution in smaller towns and focussing on marketing and
operations programme for semi-urban and rural markets.

For instance, Godrej Consumer Products intends to increase revenue

from rural areas from 38 per cent to 55 per cent in the next three
years by increasing its distribution network substantially. The products
will reach out to 50,000 villages in the next couple of years from the
present 18,000 villages while the number of towns covered will double
from 3,300 to almost 6,500 in a year.

Retail
The rural retail market is currently estimated at US$ 112 billion, or
around 40 per cent of the US$ 280 billion retail market. Major
domestic retailers like AV Birla, ITC, Godrej, Reliance and many others
have already set up farm linkages. Hariyali Kisan Bazaars (DCM) and
Aadhars (Pantaloon-Godrej JV), Choupal Sagars (ITC), Kisan Sansars
(Tata), Reliance Fresh, Project Shakti (Hindustan Unilever) and Naya
Yug Bazaar are established rural retail hubs.

Pharmaceuticals

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 Rural marketing
According to a report by McKinsey, the rural and tier-II pharma market
will account for almost half of the growth till 2015. The tier-II market
will grow to 44 per cent by 2015, amounting to US$ 8.8 billion.

This growth will be further augmented with the government increasing

the allocation under National Rural Health Mission (NRHM) by US$
424.3 million over interim budget estimate 2009-10 of US$ 2.49
billion.

Elder Pharmaceuticals is increasing its focus on the rural market. The

company that largely makes active pharmaceutical ingredients, plans
to increase its sales by 8-9 per cent mainly from rural areas and has
allocated US$ 8.26 million to strengthen the sales force for this
segment.

Telecommunication
A Gartner forecast revealed that Indian cellular services revenue will
grow at a compound annual growth rate (CAGR) of 18.4 per cent to
touch US$ 25.6 billion by 2011, with most of the growth coming from
rural markets. Also, a joint Confederation of Indian Industries (CII) and
Ernst & Young report reveals that of the next 250 million Indian
wireless users, approximately 100 million (40 per cent) are likely to be
from rural areas, and by 2012, rural users will account for over 60 per
cent of the total telecom subscriber base in India.

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 Rural marketing

In a bid to acquire rural subscribers, most Indian telecom operators

have started investing in infrastructure to roll out their services in
these areas. Realising this as a huge potential, small Indian handset
manufacturing companies, including Micromax, Intex Technologies and
Karbonn, have lined up a marketing spent of around US$ 21.02 million
for the financial year 2009-10.

Automobiles
For the auto industry, semi-urban and rural markets contribute close
to 40 per cent of sales, led by demand for two-wheelers, entry-level
cars and tractors. Significantly, car sales grew 8.3 per cent in June
2009, aided by rising demand in semi-urban and rural markets.
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 Rural marketing
Mahindra & Mahindra is bullish on the rural and semi-urban markets,
with its utility vehicle, Scorpio clocking 60-65 per cent sales

from the rural markets as against 20 per cent earlier. TVS Motor also
registered around 50 per cent of its sales from the rural and semi-
urban markets.

Consumer durables
A survey carried out by RMAI has revealed that 59 per cent of
durables sales come from rural markets.

Presently, around 50 per cent of sales in the US$ 5.14 billion

consumer electronics industry come from the urban markets, 30 per
cent from tier-II and -III towns and balance 20 per cent from rural
India.

Many leading consumer durable companies are now increasing their

presence in rural India. Recently, LG has set up 45 area offices and 59
rural and remote-area offices. Moreover, it has outlined plans to invest
around US$ 40 million towards development of entry-level products
targeted at rural markets.

Samsung has also rolled out its 'Dream Home' road show which was to
visit 48 small towns in 100 days in an effort to increase brand
awareness of its products. Samsung expects that its rural revenues
would increase to US$ 287.7 million in 2009 from US$ 164.4 million
last year. The company also plans to expand its sales channel by 25-
30 per cent in rural India.

Whirlpool, is eyeing rural markets in India for its next phase of growth.
The company is set to tap markets with a population between 100,000

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and 500,000 in the first phase, and in the next phase, will look at
expanding the base in villages with a population of 50,000.

Nature of Rural Market

Large, Diverse and Scattered Market: Rural market in

India is large, and scattered into 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 with agriculture
prosperity. In the event of a crop failure, the income of the rural
masses is directly affected.

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 Rural marketing
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
per capital income, societal backwardness, low savings, etc. But
the new tax structure, good monsoon,

government regulation on pricing has created disposable

incomes. Today the rural customer spends money to get value
and is aware of the happening around him.
Traditional Outlook: Villages develop slowly and have a
traditional outlook. Change is a continuous process but most
rural people accept change gradually. This is gradually changing
due to literacy especially in the youth who have begun to change
the outlook in the villages.
Rising literacy levels: It is documented that approximately
45% of rural Indians are literate. Hence awareness has increases
and the farmers are well-informed about the world around them.
They are also educating themselves on the new technology
around them and aspiring for a better lifestyle.
Diverse socioeconomic background: Due to dispersion
of geographical areas and uneven land fertility, rural people have
disparate socioeconomic background, which ultimately affects
the rural market.

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Infrastructure Facilities: The infrastructure facilities like
cemented roads, warehouses, communication system, and
financial facilities are inadequate in rural areas. Hence physical
distribution is a challenge to marketers who have found
innovative ways to market their products.

Some Myths:
1.Myth-1: Rural Market Is a Homogeneous Mass

Reality: Its a heterogeneous population. Various Tiers are present

depending on the incomes like Big Landlords; Traders, small farmers;
Marginal farmers: Labors, artisans. State wise variations in rural
demographics are present viz. Literacy (Kerala 90%, Bihar 44%) and
Population below poverty line (Orissa 48%, Punjab 6%).

2.Myth-2: Disposable Income Is Low

Reality: Number of middle class HHs (annual income Rs 45,000- 2,

15,000) for rural sector is 27.4 million as compared to the figure of
29.5 million for urban sector. Rural incomes CAGR was 10.95%
compared to 10.74% in urban between 1970-71 and 1993-94.

3.Myth-3: Individuals Decide About Purchases

Reality: Decision making process is collective. Purchase process-

influencer, decider, buyer, one who pays can all be different. So
marketers must address brand message at several levels.Rural youth
brings brand knowledge to Households (HH).

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Is rural marketing transactional or developmental in

its approach?

It is true, rural markets have become an attractive proposition for

commercial business organizations.

The role of rural marketing as such is more developmental than

transactional. It is more a process of delivering better standard of
living and quality of life to the rural environment taking into
consideration the prevailing village milieu.

Transactional Vs Developmental: For better

comprehension of this role let us distinguish development marketing
and transactional marketing. Table brings out the differences in brief.

Transactional Vs Development Marketing

S.N Aspect Transactional Development

o
1. Concept Consumer Society orientation,
orientation, societal concept
Marketing concept

2. Role Stimulating and Catalytic and

conversional transformation agent

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 Rural marketing
marketing
3. Focus Product-market fit Social change
4. Key task Product Social innovations and
innovations and communications
communications
5. Nature of Commercial Socio-cultural,
activity economic
6. Participants Corporate Government,
enterprises, voluntary agencies,
Sellers corporate enterprises,
benefactors
7. Offer Products and Development,
services projects/schemes/prog
rams
8. Target group Buyers Beneficiaries and
buyers
9. Communicati Functional Developmental
on
10. Goal Profits, Customer Market development
satisfaction
Corporate Image
Brand image
11. Time-Frame Short-medium Medium-Long
12. Motivation Profit-motive Service-motive

Ideological or Public
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Business policy policy

Model: The model of rural marketing represents a combination of

the transactional and developmental approaches.

Rural marketing process is both a catalyst as well as an outcome

of the general rural development process. Initiation and
management of social and economic change in the rural sector is
the core of the rural marketing process. It becomes in this
process both benefactor and beneficiary.
Innovation is the essence of marketing. Innovative methods of
social change for successful transformation of traditional society
are virtual. Such a change narrows the rural-urban divide.
The process of transformation can be only evolutionary and not
revolutionary. The growth of the rural market can be a planned
evolutionary process based on strategic instruments of change
rather than constitute just short-term opportunities for
commercial gains.
The exposure of ruralites to a variety of marketing transactions
during the change process puts them in the role of beneficiaries
than of just `buyers' of modern inputs and infrastructural
services.
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Communication is the vital element of rural marketing. It should
serve to resolve social conflicts, encourage cooperation and
strengthen competitive spirit during interactions between rural
and urban as well as within rural

areas. Another critical point for communication is the point of

conversion of ruralite from an "induced beneficiary" to an
"autonomous buyer".

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 have affordability but not form a demand
base large enough for marketing firms to depend on. 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 is fast expanding. Farmers cultivating
sugar cane in UP and Karnataka fall in this category.
The Poor: This constitutes a huge segment. Purchasing power
is less, but strength is more. They receive the grants from

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government and reap the benefits of many such schemes and
may move towards the middleclass. The farmers of Bihar and
Orissa fall under this category.

Roadblocks of Indian Rural Market

There are several roadblocks that make it difficult to progress in the

rural market. Marketers encounter a number of problems like dealing
with physical distribution, logistics, proper and effective 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 rural markets. Thus the market is also
underdeveloped and marketing strategies have to be different
from those used in urban marketing.
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.

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3. Low per capita income: Agriculture is the main source of
income and hence spending capacity depends upon the
agriculture produce. Demand may not be stable or regular.
4. Transportation and warehousing: Transportation is one
of the biggest challenges in rural markets. As far as road
transportation is concerned, about 50% of Indian villages are
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 located in 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 is another 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 and state
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 are reluctant to open outlets in these areas. They
are mainly dependent on dealers, who are not easily available for
rural areas. This is a challenge to the marketers.
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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 these specific 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 literacy rate in the rural areas is rather low and
consumers behaviour in these areas is traditional, which may be
a problem for effective communication.

8. Spurious brands: Cost is an important factor that

determines purchasing decision in rural areas. A lot of spurious
brands or look-alikes are available, providing a low cost option to
the rural customer. Many a time the rural customer may not be
aware of the difference 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 purchasing power.
10. Dispersed markets: Rural population is highly
dispersed and requires a lot of marketing efforts in terms of
distribution and communication.
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Attractiveness of rural market

1. Large Population: The rural population is large and its

growth rate is also high. Despite the rural urban migration, the
rural areas continue to be the place of living majority of Indians.

2.Rising Rural Propensity:

2000- 2005 2008-
INCOME GROUP
01 -06 09
ABOVE RS. 1.6 3.8 5.6
100,000
RS. 77,001- 2.7 4.7 5.8
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 Rural marketing
100,000
RS . 50,001- 8.3 13.0 22.4
77,000
RS . 25,001- 26.0 41.1 44.6
50,000
RS.25,000 & 61.4 37.4 20.2
BELOW

Thus we see that population between income level of Rs. 25,000-

77,000 will increase from 34.3% in 1994-95 to 67.0% in 2006-07.
The rural consuming class is increasing by about 3-4% per
annum, which roughly translates into 1.2 million new consumers
yearly.

3.Growth in consumption:
PER CAPITA HOUSEHOLD EXPENDITURE (IN RS.)

LEVEL N STATES EXPENDIT

O. URE

High 7 Punjab 614

Kerala 604
Haryana 546

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Rajasthan 452
Gujarat 416
Andhra 386
(Above Rs Pradesh
382/-) Maharashtr 384
a
West 382
Bengal
Orissa 381
Average Tamil 381
5
(Rs. 382/-) Naidu
Uttar 373
Pradesh
Karnataka 365
Assam 338
Low
Madhya 326
(Below Rs. 3
Pradesh
382/-)
Bihar 289

Distribution households income wise (projection in

Rs Crore)

2001 02 2006 07
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RURAL RURAL
INCOME
TOTA TOTA
GROUPS NO. % NO. %
L L

HIGH 0.26 0.0 26 0.52 0.1 23

7 .9 2 .1
MIDDLE 12.0 7.7 64 16.7 10. 61
4 3 .2 2 32 .8
LOW 5.7 5.0 88 3.68 3.5 95
9 .7 2 .7
TOTAL 18.0 12. 71 20.9 13. 66
4 89 .4 0 96 .7

Spending pattern (Rural Households in Rs.)

ITEM % RIC PO AVERA

H OR GE

FOOD ARTICLES 4 14
73 95
4 7
TOILETRIES 2
67 33 43
0
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WASHING 1
43 22 28
MATERIAL 3
COSMETICS 1
33 17 21
0
OTC PRODUCTS 4 13 6 9
OTHERS 9 30 15 19
TOTAL 33
166 215
3

Average rural household spends on consumables excluding food

grains, milk & vegetables are Rs. 215/-.

4.Life style changes:

Income vs. usage of packed consumer goods (% of
household using)

MONTHLY HOUSEHOLD INCOME

(RS.)
GOODS
UP TO 351 751 150
350 750 1500 1+
WASHING 60 78 86 91
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CAKES/BARS
SHAMPOOS 57 72 89 93
TOOTH 22 36 65 85
PASTE/POWDER
BATHING SOAPS 20 25 41 63
TEA (PACKAGED) 22 30 48 64

5.Life cycle advantage:

STAGES IN LIFE CYCLE
PRODUCT URBAN MARKET RURAL
GROWTH

RATE %
Popular Maturit 2 Growth
soaps y
Premium Late 11 Early
soaps growth growth
Washing Late 6 Early
powder growth growth
Skin Maturit 1.1 Growth
creams y
Tea Maturit 4 Growth
y

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6. Market growth rates higher: Growth rates of the FMCG
market and the durable market are higher in rural areas for
many products. The rural market share will be more than 50% for
the products like toilet soaps, body talcum powder, cooking
medium (oil), cooking medium (vanaspati), tea, cigarettes and
hair oil.
7. Rural marketing is not expensive: Conventional wisdom
dictates that since rural consumers are dispersed, reaching them is
costly. However, new research indicates that the selling in Rural
India is not expensive. According to one research it costs roughly
Rs.1 Crore 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, which can reach millions, costs twice as much in urban area.

8. 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
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 Rural marketing
Lack of marketers imagination and initiative.
Marketers have so far, failed in analyzing the rural side and exploiting
rural Indias traditional selling system- Haats & Melas.Their near
obsession with just duplicating the urban-type network and that too
with very limited success, has kept them blind to the potential of
these two outlets.

RURAL VS URBAN MARKETING

N ASPECT URBAN RURAL
O.

1 PHILOSOPHY Marketing & Marketing &

Societal Societal

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Concepts & Concepts,
Relationship Development
Marketing Marketing &
Relationship
Marketing
2 A) MARKET

B) DEMAND High Low

C) COMPETITION Among Units In Mostly From
Organized Unorganized
Sector Units
CONSUMERS
LOCATION Concentrated Widely Spread
LITERACY High Low
INCOME High Low
EXPENDITURE Planned, Even Seasonal,
Variation
NEEDS High Level Low Level
INNOVATION/ADO Faster Slow
PTION

3 PRODUCT
AWARENESS High Low
CONCEPT Known Less Known
POSITIONING Easy Difficult
USAGE METHOD Easily Grasped Difficult To

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Grasp
QUALITY Good Moderate
PREFERENCE
4 PRICE
SENSITIVE Yes Very much
LEVEL DESIRED Medium-high Medium-low
5 DISTRIBUTION

Wholesalers, Village shops,

stockists, Haats
retailer,
supermarket,
CHANNELS
specialty
stores, &
authorised
showrooms
TRANSPORT Good Average
FACILITIES
PRODUCT High Limited
AVAILABILITY
6 PROMOTION
Print, audio TV, radio, print
visual media, media to some

ADVERTISING outdoors, extent. More

exhibitions etc. languages
few languages

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PERSONAL Door-to-door, Occasionally

SELLING frequently

SALES Contests, gifts, Gifts, price

PROMOTION price discount discounts

PUBLICITY Good Less
opportunities opportunities

Special Products for Rural Markets:

Rural Transporter: Mahindra & Mahindra is busy developing

the prototype of what it calls a Rural Transporter basically a
hybrid between a tractor and a rural transport vehicle. The product

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at 20-25 HP will be targeted at those who cannot afford a normal
tractor and would also fulfill the need of family transporter that
could take in the rural roughs 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 local needs. It spent Rs. 21 Lacs to develop a set
that would have on-screen displays in the vernacular languages of
Hindi, Tamil and Bengali. The logic, rural consumers 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 watches in rural areas. In fact it is considered to
be a high priority list. It was also found that a rural consumer looks
for the ruggedness of the watch more than the urban consumer
does. He prefers thick watches than slim watches.

The biggest problem that the Marketers are facing in the Rural
Markets is Of IMITATIONS. Imitations may result in two types of
goods depending upon the purpose, commitment, and competence of
imitator. A poor imitator will end up in

producing deceptive, spurious, fake, copycat products. He dupes the

gullible customer by offering products having close resemblance 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.

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In this scenario the job of the Marketer becomes even more
difficult in the sense that he has not to fight other competitors but
also the imitated products.
The advantages that these products enjoy in the rural markets
are that the Imitators who are in the 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 show him the benefits of his products over the
imitated ones.

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Need-Product Relationships and the changes happening in
Rural India
Needs Old Products New Products
Brushing Teeth Neem sticks, Toothpaste, tooth
Charcoal, Rocksalt, powder
Husk
Washing Vessels Coconut fiber, Washing Powders,
Earthy materials, soaps and liquids
Brick Powder, Ash
Transport Bullock Cart, Horses, Tractors, LCVs,
Donkeys Mopeds, Scooters,
Motor cycles
Irrigation Wells, Canals, Water Bore-wells, Motors,
lifters, Wind Mills Power Generators,
Pump Sets
Hair Wash Shikakai powder, Shampoos and
Retha, Besan hair care soaps

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4 As approach of Indian Rural Market

The rural market may be appealing but it is not without its problems:
Low per capita disposable incomes that is half the urban disposable
income; large number of daily wage earners, acute dependence on
the vagaries of the monsoon; seasonal consumption linked to harvests
and festivals and special occasions; poor roads; power problems; and
inaccessibility to conventional advertising media.

However, the rural consumer is not unlike his urban counterpart in

many ways.

The more daring MNCs are meeting the consequent challenges of

availability, affordability, acceptability and awareness (the so-called 4
As)

Availability

The first 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. However,
given the poor state of roads, it is an even greater challenge to
regularly reach products to the far-flung villages. Any serious marketer
must strive to reach at least 13,113 villages with a population of

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more than 5,000. Marketers must trade off the distribution cost with
incremental market saturation. 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.

To service remote village, stockiest use autorickshaws, bullock-carts

and even boats in the backwaters of Kerala. Coca-Cola, which
considers rural India as a future growth driver, has evolved a hub and
spoke distribution model to reach the villages. To ensure full loads, the
company depot supplies, twice a week, large distributors which who
act as hubs. These distributors appoint and supply, once a week,
smaller distributors in adjoining areas. LG Electronics defines all cities
and towns other than the seven metros cities as rural and semi-urban
market. To tap these unexplored country markets, LG has set up 45
area offices and 59 rural/remote area offices.

Affordability

The second 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 who are on daily wages. Some
companies have addressed the affordability problem by introducing
small unit packs. Most of the shampoos are available in smaller packs.
Fair and lovely was launched in a smaller pack. Colgate toothpaste

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launched its smaller packs to cater to the travelling segment and the
rural

consumers.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 realize 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-to-mix Sunfill is
available in a single-serve sachet of 25 gm priced at Rs 2 and multi
serve sachet of 200 gm priced at Rs 15.

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. It was a runway hit selling 100,000 sets
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in the very first year. 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 crores in total premium. The
company tied up with non-governmental organizations and offered
reasonably-priced policies in the nature of group insurance covers.
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. Fortunately, however, the
rural consumer has the same likes as the urban consumer movies
and music and for both the urban and rural consumer, the family is
the key unit of identity. 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
Doordarshan. Consumption of branded products is treated as a special
treat or luxury.

Awareness

Brand awareness is another challenge. Fortunately, however, the rural

consumer has the same likes as the urban consumer movies and
music and for both the urban and rural consumer, the family is the
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key unit of identity. 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
Doordarshan. Consumption of branded products is treated as a special
treat or indulgence.

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

These are promotional events organized by stockiest. 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. It doubled its spend on advertising on
Doordarshan, which alone reached 41 per cent of rural households. It
has also used banners, posters and tapped all the local forms of
entertainment. 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. Philips India
uses wall writing and radio advertising to drive its growth in rural
areas.

The key dilemma for MNCs ready to tap the large and fast-growing
rural market is whether they can do so without hurting the company's
profit margins.

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Evolving a New Marketing Mix for Selling to Rural

Indians

The marketing mix in the case of Indian rural markets consists of 4Ps
i.e.
Product, Price, Promotion, Place combined with 1 P that is Packaging
and one R i.e. Retailer as special focus areas. However, at the base
of this marketing mix will be 2 Es of Education and Empowerment.

CUSTOMIZATIO
retailerNN

packaging

Product, price,
place and
promotion

EDUCATIO EMPOWEREMEN
N T
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The traditional marketing hypothesis tends to ignore the requirement

of a developing countrys rural needs. The concept of marketing has
to be taken in conjunction with economic, psychological and social
implications. Hence, the concept of Mega-Marketing where all such
factors are taken into consideration while developing the Marketing
Mix is more relevant to succeed and build enduring brands. In rural
Indias case the two most important considerations are Education and
Empowerment opportunities which traditional approaches of
marketing fail to acknowledge. Then only the opportunity provided by
the rural market can be fully tapped.

12.2% of the world lives in Rural India. Put in a different context, this
works out to 1 in 8 people on Earth. Being able to successfully tap this
growing market is every marketers dream. However, myths abound.
Indias rural markets are often misunderstood. A clear distinction
needs to be made with regard to the reality versus the image of rural
India. If such a distinction is not made, we will be unable to distinguish
between the serpent and the rope and the rope and the serpent.

The rural market is not homogeneous. Though the aggregate size is

very large, individual subsets of this market tend to be rather small
and disparate. Geographical, demographical, statistical, logistical
differences are very apparent. Positioning and realities regarding the
potential of each of these market segments differ and lie at the very
core of forming the strategy for the rural markets.

The face of Indian agriculture is changing from dry land and irrigated
agriculture into high-tech and low-tech agriculture. Farmers in states
like Maharashtra and Andhra Pradesh have reaped the benefits of
adopting new age farming practices, including green house
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cultivation, fert-irrigation and hydroponics. This has radically changed
the economics of farming, with the investment in these systems
lowering the cost of cultivation, increasing yields due to integrated
crop management practices and reducing the dependence on rainfall.
As a result, disposable income has grown sharply. The aspirants are
becoming climbers showing a sustained economic upturn as
purchasing power is increasing in the rural markets. The proportion of
very rich has increased five- fold. The growing incomes have modified
demand patterns and buyer behaviour. Moreover, the

need for a product or service is now adequately backed up with the

capacity, ability and willingness to pay.

However, the market still remains largely unexploited. At most times,

potential markets need to be found and at times, even created. Such
creation of demand needs efficient management of the supply chain.
To increase market share, behavioural change needs to be at the
forefront of any strategy. Further, due to the diversity of this market,
marketers need to think, plan and act locally.

It is therefore essential to develop an accurate Marketing Mix

for selling to rural Indians.

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MARKETING STRATEGIES TO CAPTURE RURAL
INDIA

SEGMENTATION OF RURAL MARKET

The first step is to develop & implement any strategy for the rural
market should include the appropriate segmentation of the rural
market. The important thing is that appropriate segmentation basis
need to be applied. Different product categories have different rural
markets to cater to & these can be selected by applying different
criteria of segmentation. The organization can do the following thing
to start with:
Focus on select markets.
Focus on select villages.

BY COMMUNICATING AND CHANGING QUALITY

PERCEPTION
Companies are coming up with new technology and they are properly
communicating it to the customer. There is a trade of between Quality
a customer perceives and a company wants to communicate. Thus,
this positioning of technology is very crucial. The perception of the
Indian about the desired product is changing. Now they know the
difference between the products and the utilities derived out of it. As a
rural Indian customer always wanted value for money with the

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changed perception, one can notice difference in current market
scenario.

BY PROPER COMMUNICATION IN INDIAN LANGUAGE

The companies have realized the importance of proper communication
in local language for promoting their products. They have started
selling the concept of quality with proper communication. Their main
focus is to change the Indian customer outlook about quality. With
their promotion, rural customer started asking for value for money.

BY TARGET CHANGING PERCEPTION

If one go to villages they will see that villagers using Toothpaste, even
when they can use Neem or Babool sticks or Gudakhu, villagers are
using soaps like Nima rose, Breeze, Cinthol etc. even when they can
use locally manufactured very low priced soaps. Villagers are
constantly looking forward for new branded products. What can one
infer from these incidents, is the paradigm changing and customer no
longer price sensitive? Indian customer was never price sensitive, but
they want value for money. They are ready to pay premium for the
product if the product is offering some extra utility for the premium.

BY UNDERSTANDING CULTURAL AND SOCIAL

VALUES

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Companies have recognized that social and cultural values have a
very strong hold on the people. Cultural values play major role in
deciding what to buy. Moreover, rural people are emotional and
sensitive. Thus, to promote their brands, they are exploiting social and
cultural values.

BY PROVIDING WHAT CUSTOMER WANT

The customers want value for money. They do not see any value in
frills associated with the products. They aim for the basic functionality.
However, if the seller provides frills free of cost they are happy with
that. They are happy with such a high technology that can fulfil their
need. As "Motorola" has launched, seven models of Cellular Phones of
high technology but none took off. On the other hand, "Nokia" has
launched a simple product, which has captured the market.

BY PROMOTING PRODUCTS WITH INDIAN MODELS

AND ACTORS
Companies are picking up Indian models, actors for advertisements as
this helps them to show themselves as an Indian company. Diana
Hyden and Shahrukh Khan are chosen as a brand ambassador for MNC
quartz clock maker "OMEGA" even though when they have models like
Cindy Crawford.

BY ASSOCIATING THEMSELVES WITH INDIA

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MNCs are associating themselves with India by talking about India, by
explicitly saying that they are Indian. M-TV during Independence Day
and Republic daytime make their logo with Indian tri-colour. Nokia has
designed a new cellular phone 5110, with the India tri-colour and a
ringing tone of "Sare Jahan se achcha".

BY PROMOTING INDIAN SPORTS TEAM

Companies are promoting Indian sports teams so that they can
associate themselves with India. With this, they influence Indian
mindset. LG has launched a campaign "LG ki Dua, all the best". ITC is
promoting Indian cricket team for years; during world cup they have
launched a campaign "Jeeta hai jitega apna Hindustan India India
India". Similarly, Whirlpool has also launched a campaign during world
cup.

BY TALKING ABOUT A NORMAL INDIAN

Companies are now talking about normal India. It is a normal tendency
of an Indian to try to associate him/her with the product. If he/she can
visualize himself/herself with the product, he /she become loyal to it.
That is why companies like Daewoo based their advertisements on a
normal Indian family.

BY DEVELOPING RURAL-SPECIFIC PRODUCTS

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Many companies are developing rural-specific products. Keeping into
consideration the requirements, a firm develops these products.
Electrolux is working on a made-for India fridge designed to serve
basic purposes: chill drinking water, keep cooked food fresh, and to
withstand long power cuts.

BY GIVING INDIAN WORDS FOR BRANDS

Companies use Indian words for brands. Like LG has used India brand
name "Sampoorna" for its newly launched TV. The word is a part of the
Bengali, Hindi, Marathi and Tamil tongue. In the past one year, LG has
sold one lakh 20-inch Sampoorna TVs, all in towns with a population of
around 10,000.

BY ACQUIRING INDIAN BRANDS

As Indian brands are operating in India for a long time and they enjoy
a good reputation in India. MNCs have found that it is much easier for
them to operate in India if they acquire an Established Indian Brand.
Electrolux has acquired two Indian brands Kelvinator and Allwyn this
has gave them the well-established distribution channel. As well as
trust of people, as people believe these brands. Similarly Coke has
acquired Thumps up, Gold Spot, Citra and Limca so that they can kill
these brands, but later on they realized that to survive in the market
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and to compete with their competitor they have to rejuvenate these
brands.

BY EFFECTIVE MEDIA COMMUNICATION

Media Rural marketing is being used by companies. They can either go
for the traditional media or the modern media. The traditional media
include melas, puppetry, folk theatre etc. while the modern media
includes TV, radio, and e-chaupal. LIC uses puppets to educate rural
masses about its insurance policies. Govt of India uses puppetry in its
campaigns to press ahead social issues. Brook

Bond Lipton India ltd used magicians electively for launch of Kadak
Chap Tea in Etawah district. In between such a show, the lights are
switched of and a torch is flashed in the dark (EVEREADYs tact).

BY ADOPTING LOCALISED WAY OF DISTRIBUTING

Proper distribution channels are recognized by companies. The
distribution channel could be big scale Super markets; they thought
that a similar system can be grown in India. However, they were
wrong; soon they realized that to succeed in India they have to reach
the nook and the corner of the country. They have to reach the "local
Paan wala, Local Baniya" only they can succeed. MNC shoe giants,
Adidas, Reebok, and Nike started with exclusive stores but soon they
realized that they do not enjoy much Brand Equity in India, and to
capture the market share in India they have to go the local market
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shoe sellers. They have to reach to local cities with low priced
products.

BY ASSOCIATING THEMSELVES WITH INDIAN

CELEBRITIES
MNCs have realized that in India celebrities enjoyed a great popularity
so they now associate themselves with Indian celebrities. Recently
Luxor Writing Instruments Ltd. a JV of Gillette and Luxor has launched
500 "Gajgamini" ranges of Parker Sonnet Hussain special edition
fountain pens, priced at Rs. 5000. This pen is signed by Mr. Makbul
Fida Hussain a renowned painter who has created "Gajgamini" range
of paintings. Companies are promoting players like Bhaichung

Bhutia, who is promoted by Reebok, so that they can associate their

name with players like him and get popularity.

MELAS
Melas are places where villagers gather once in a while for shopping.
Companies take advantage of such events to market their products.
Dabur uses these events to sell products like JANAM GHUTI (Gripe
water). NCAER estimates that around half of items sold in these melas
are FMCG products and consumer durables. Escorts also display its
products like tractors and motorcycles in such melas.

PAINTINGS
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A picture is worth thousand words. The message is simple and clean.
Rural people like the sight of bright colors. COKE, PEPSI and TATA
traders advertise their products through paintings.

FINDINGS AND ANALYSIS

1. Which soap u prefer to use?

The reaction of people towards various SOAP brands

can be tabulated in the following manner:

BRANDS LUX DETTOL LIFEBUOY OTHERS

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PERCENTAG 36 18 22 24
E

In the survey, it could easily be concluded that LUX, the product of

HUL was highly in demand. LUX, the product of HUL covers 36%of the
market share. After LUX, the other brands (EXCEPT LUX, DETTOL,
LIFEBUOY) covers 24%of the market share. This is then followed by
LIFEBUOY, the product of HUL with a market share of 22%,which is
then followed by DETTOL, the product of RECKITT BENCKISER with a
market share of 18%.

This data can be graphically explained with the help of the

following bar graph:

LUX
LIFEBUOY
DETTOL
OTHERS

2. Which pack u prefer to use?

In order to determine the income pattern of the

consumers, it was necessary for the researcher to distribute the
consumers on the basis of their demand for the various packs of SOAP
brands available in the market. However, the reaction of people

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towards various packs of SOAP can be tabulated in the following
manner:

PACK OF SOAPS SINGLE PACK FAMILY PACK ( 3 IN 1)

PERCENTAGE 56 44

In the survey, I tried to differentiate amongst people with below

average
household income, average household income &above household
income. This classification can be done on the basis of the daily
expenditure that people make.56% consumers demand single
pack.44% consumers demand family packs i.e.3 in 1 pack.

This data can be graphically explained with the help of the

following bar graph:

SINGLE PACK
Column1

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3. Which tea u prefer to use?

The reaction of people towards various TEA brands can be tabulated

in the following manner:

BRANDS TATA TEA BROOKE TAJ MAHAL OTHERS

BOND
PERCENTAG 32 28 18 22
E

In the survey, it could easily be concluded that TATA TEA, the product
of TATA has a market share of 32%.This is followed by, BROOKE BOND,
with a market share of 28%.Followed by other brands (EXCEPT TATA
TEA,BROOKE BOND,TAJ MAHAL)with a market share of 22%.This is
finally followed by TAJ MAHAL, the product of HUL which holds18%of
the market share.

This data can be graphically explained with the help of the

following bar graph:

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TATA TEA
BROOKE BOND
TAJ MAHAL
OTHERS

BRANDS

4. Which tea pack u prefer to use?

In order to determine the income pattern of the consumers,

it was necessary for the researcher to distribute the consumers on the
basis of their demand for the various packs of TEA brands available in
the market. However, the reaction of people towards various TEA
packs can be tabulated in the following manner:

TEA PACKS SACHET MEDIUM PACK LARGE PACKS

PERCENTAGE 48 32 20

In the survey, I tried to differentiate amongst the people, with below

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average household income, average household income & above
household income. This classification can be done on the basis of the
daily expenditure that people make. However, it can be concluded
that sachets are most commonly used by the people .i.e.
48%consumers demand sachet packs. 32%consumers demand
medium pack. 20%consumers demand large pack.
This data can be graphically explained with the help of the
following diagram:

SACHET
MEDIUM PACK
LARGE PACK

PACKS PREFERRED BY CUSTOMERS

1. Which tooth paste u prefer to use?

In the initial years, the rural consumers preferred tooth powders,

datoons etc. But from the last decade, the preference of consumers
towards toothpaste has been changed. A huge number of toothpastes
of
different companies are sold in rural market.
However, the reaction of people towards various TOOTH
PASTES can be tabulated as follows:

BRANDS PEPSODENT COLGATE CLOSE UP OTHERS

PERCENTAG 27 35 22 16
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E

In the survey that the researcher conducted, it could easily be seen

that COLGATE, the product of COLGATE PALMOLIVE is the market
leader, which covers 35%of the total market. After that, PEPSODENT,
the product of HUL is demanded by the customers, which covers
27%of the market share. Followed by CLOSE UP, the product of HUL
is demanded by the customers, which covers 22%of the market share.
Which is then followed by others brands (EXCEPT PEPSODENT,
COLGATE, CLOSE -UP), which covers 16%of the total market share.

This data can be graphically explained with the help of the

following bar graph:

PEPSODENT
COLGATE
CLOSE UP
OTHERS

BRANDS

2. Which coffee u prefer to use?

The reaction of people towards various COFFEE brands can

be tabulated in the following manner:

BRANDS BRU NESTLE NESCAFE OTHERS

PERCENTAG 26 32 32 10
E

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In the survey, it can be easily concluded that all the brands are facing
tough
competition. NESTLE, the product of NESTLE S.A.& NESCAFE, another
product of NESTLE S.A., shares equal market share of 32%each.This
means that they are in a very tough competition. This is followed by
BRU, the product of HUL which holds, 26%of the market share. While
the other brands hold only 10%of the market share.

This data can be graphically explained with the help of the

following bar graph:

BRU
NESTLE
NESCAFE
OTHERS

BRANDS

3. Which cream u prefer to use?

The reaction of people towards various CREAM brands

can
be tabulated in the following manner:

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BRANDS PONDS FAIR & AYUR OTHERS
LOVELY
PERCENTAG 28 32 14 26
E

In the survey, that I conducted, it can easily be concluded that FAIR

&LOVELY, the product of HUL, holds the major market with a share of
32%.This is followed by, POND s, another product of HUL, which holds
28%of the market share. This is followed by, other brands (EXCEPT,
PONDS, FAIR &LOVELY &AYUR), which captures 26%of the market
share. This is followed by AYUR, the brand of AYUR
ACADEMY OF NATURAL BEAUTY (AANB) which holds 14%of the total
market share.

This data can be graphically explained with the help of the

following bar graph:

PONDS
FAIR & LOVELY
AYUR
OTHERS

BRANDS

4. which hair oil u prefer to use?

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The reaction of people towards various HAIR OIL brands
can
be tabulated in the following manner:

BRANDS PARACHUTE DABUR DABUR OTHERS

AMLA VATIKA
PERCENTAG 37 29 19 15
E

In the survey, it can easily be concluded that PARACHUTE, the product

of MERICO captures 37%of the total market share. This is followed by
DABUR AMLA, the product of DABUR which captures 29%of the total
market share. This is followed by DABUR VATIKA, another product of
DABUR which captures 19%of the market. And after that, followed by
other brands (EXCEPT PARACHUTE, DABUR AMLA, DABUR VATIKA)
captures 15% of the market share.

This data can be graphically explained with the help of the

following bar graph:

PARACHUTE
DABUR AMLA
DABUR VATIKA
OTHERS

BRANDS

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5. Which biscuits u prefer to use?

The reaction of people towards various BISCUITS

brands can be tabulated in the following manner:

BRANDS MARIE GOOD DAY PARLE G OTHERS

GOLD
PERCENTAG 24 21 38 17
E

In the survey, it can easily be concluded that PARLE-G, the product of

PARLE , holds a major market share of 38%.This is followed by MARIE
GOLD, a product of BRITANNIA which holds 24%of the market share.
After that, GOOD DAY, another product of BRITANNIA, holds 21%of the
market share. This is followed by other brands (EXCEPT MARIE GOLD,
GOOD DAY, PARLE-G) which hold a market share of 17%.

This data can be graphically explained with the help of the

following bar graph:

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MARIE GOLD
GOOD DAY
PARLE-G
OTHERS

BRANDS

6. Which detergent u prefer to use?

The reaction of people towards various DETERGENT

brands can be tabulated in the following manner:

BRANDS SURF RIN TIDE OTHERS

PERCENTAG 27 35 22 16
E

In the survey, it could be easily concluded that RIN, the product of

HUL
captures 35%of the total market share. This is followed by SURF, the
product of HUL which has a market share of 27%.This is followed by
TIDE, the product of PROCTER & GAMBLE which has a market share of
27%.This is finally followed by other brands (EXCEPT
SURF,RIN,TIDE)which captures 16%of the market share.
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This data can be graphically explained with the help of the

following bar graph:

SURF
RIN
TIDE
OTHERS

BRANDS

7. Which shampoo u prefer to use?

The reaction of people towards various SHAMPOO brands can

be tabulated in the following manner:

BRANDS CLINIC SUNSILK HEAD & OTHERS

PLUS SHOULDER
S
PERCENTAG 33 25 28 14
E

In the survey, it can easily be concluded that CLINIC PLUS, the product
of

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HUL, captures the major portion of the market with a market share of
33%.This is followed by HEAD & SHOULDERS, the product of PROCTER
&GAMBLE which holds 28%of the market share. This is followed by
SUNSILK, the product of HUL which holds 25%of the market share.
Finally followed by other brands (EXCEPT CLINIC PLUS, SUNSILK, HEAD
& SHOULDERS) with a market share of 14%.

This data can be graphically explained with the help of the

following bar graph:

CLINIC PLUS
SUNSILK
HEAD & SHOULDERS
OTHERS

BRANDS

8. Which pack u prefer to use?

In order to determine the income pattern of the consumers, it

was necessary for the researcher to distribute the consumers on the
basis of their demand for the various packs of SHAMPOO brands
available in the
market.
However,the reaction of people towards various SHAMPOO packs
can be tabulated in the following manner:

SHAMPOO SACHET SMALL MEDIUM FAMILY

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PACKS PACK PACK PACK
PERCENTAG 23 32 28 17
E

In the survey, I tried to differentiate amongst the people, with below

average household income, average household income & above
household income. This classification can be done on the basis of the
daily expenditure that people make. However, 32%consumers
demand SMALL PACK. 28% consumers demand medium pack.17%
consumers demand large packs.

This data can be graphically explained with the help of the

following bar graph:

SACHET
SMALL PACK
MEDIUM PACK
FAMILY PACK

PACKS PREFERRED BY CUSTOMERS

9. Which Television you prefer to use ?

The reaction of people towards various television

brands can be tabulated in the following manner:

BRANDS ONIDA BELTEK CROWN OTHERS

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PERCENTAG 40 23 33 4
E

In the survey, it can easily be concluded that TELEVISION of ONIDA,

captures the major portion of the market with a market share of
40%.This is followed by CROWN, which holds 33%of the market share.
This is followed by BELTEK , which holds 23%of the market share.
Finally followed by other brands ( SAMSUNG, LG, SONY etc) with a
market share of 4%.

This data can be graphically explained with the help of the

following bar graph:

ONIDA
BELTEK
CROWN
OTHERS

BRANDS

10. Which bicycle you prefer to use?

The reaction of people towards various bicycle brands

can be tabulated in the following manner:
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BRANDS ATLAS HERO AVON OTHERS

PERCENTAG 37 33 22 08
E

In the survey, it can easily be concluded that the BICYCLE of ATLAS,

captures the major portion of the market with a market share of
37%.This is followed by HERO, which holds 33%of the market share.
This is followed by AVON , which holds 22%of the market share. Finally
followed by other brands (EXCEPT atlas, hero and avon ) with a
market share of 8%.

This data can be graphically explained with the help of the

following bar graph:

ATLAS
HERO
AVON
OTHERS

BRANDS

11. Which refrigerator you prefer to use?

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The reaction of people towards various bicycle brands can be

tabulated in the following manner:

BRANDS GODREJ VIDEOCON KELVINATO OTHERS

R
PERCENTAG 38 20 28 14
E

In the survey, it can easily be concluded that the REFRIGERATOR of

GODREJ, captures the major portion of the market with a market share
of 38%.This is followed by KELVINATOR, which holds 28%of the market
share. This is followed by VIDEOCON , which holds 20%of the market
share. Finally followed by other brands (LG, SAMSUNG etc ) with a
market share of 14%.

This data can be graphically explained with the help of the

following bar graph:

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12. Which wrist watch you prefer to use?

The reaction of people towards various bicycle

brands can be tabulated in the following manner:

BRANDS HMT MAXIMA TITAN OTHERS

PERCENTAG 26 14 40 20
E

In the survey, it can easily be concluded that the WRIST WATCH of

TITAN, captures the major portion of the market with a market share
of 40%.This is followed by HMT, which holds 26%of the market share.
This is followed by MAXIMA , which holds 14%of the market share.
Finally followed by other brands (EXCEPT HMT, MAXIMA AND TITAN )
with a market share of 8%.

This data can be graphically explained with the help of the

following bar graph:

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13. Which fan you prefer to use?

The reaction of people towards various bicycle brands can
be tabulated in the following manner:

BRANDS LOCAL POLAR KHAITAN CROMPTON

FANS FANS
PERCENTAG 32 28 22 18
E

In the survey, it can easily be concluded that the FANS of LOCAL

COMPANIES, captures the major portion of the market with a market
share of 32%.This is followed by POLAR, which holds 28%of the
market share. This is followed by KHAITAN , which holds 22%of the
market share. Finally followed by CROMPTON with a market share of
18%.
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This data can be graphically explained with the help of the

following bar graph:

Conclusions
Thus 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.
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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.

In this report, it can very easily be concluded that HUL, holds major
portion of the FMCG market. It holds major shares in the soap,
detergent, shampoo & cream s category. HULs products are mainly
in demand, because they provide these products in different packs.
They consider the fact that rural consumers do not have that much
money to be spent on these products. So, they prefer buying the small
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or the medium packs. However, large or family packs are still been
bought by few consumers, who are from a well off families.

In the case of TEA, TATA holds a major share. In the case

of COFFEE, NESTLE & NESCAFE holds the major share. Rural
consumers favor TATA because it is an old organization &it has gained
a lot of BRAND EQUITY which finally creates BRAND LOYALTY. In these
products, consumers do get brand loyal, because they do not want to
take a risk with their tastes. So they prefer sticking to one brand.
These organizations supply their products in various packs (small,
medium &large), considering the buying capacity of their consumers.

As in the case of BISCUITS, PARLE-G holds the major market

share. Rural consumers favor PARLE-G because it is an old
organization & it has gained a lot of BRAND EQUITY which finally
creates BRAND LOYALTY. In case of BISCUITS, consumers do get brand
loyal, because they do not want to take a risk with their tastes. So
they prefer sticking to one brand. Though it is the cheapest biscuit but
still the taste is same and unique. ACHA, SASTA AND TIKAU.

In the case of TOOTH PASTES,COLGATE PALMOLIVE holds a

major market share. Consumers are very concerned about their
health, so if any product suits

them they prefer sticking to that product. And this product is also
available in various packs, so rural consumers can use it according to
their buying capacity.

In the case of HAIR OILS,MERICO holds the major market

share. MERICO is a much known organization & its product
PARACHUTE has reached all the places. So it is a known product,
which has created a good amount of goodwill for the organization.
Consumers have confidence & trust in their product. Therefore, they
prefer buying it.
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And in the case of durable goods like tv, fan etc. in rural areas
people generally dont buy the company products, they prefer to buy
local products because of lack of knowledge and the main factor is
because of income factor, which is quite low in rural areas. Illiteracy is
also a main factor. For them there is no such thing status symbol.
Although, there is a brand loyalty but the percentage is very low.

Suggestions &recommendations
The researcher would like to suggest the following
points, so that the organizations can easily sell their products to their
consumers:

1.However,the demand of a product is also affected by its life cycle. If

the product is in the introduction stage, then it will definitely take
some time to capture the market, because in the introduction stage,
consumers are not much aware about the product. Therefore, it is the
responsibility of the organization to create awareness amongst the
consumers.

2.They should adapt rigorous marketing strategies, in order to sustain

in the market.

3.There is immense competition in this sector. Therefore, the

organizations should try to gain competitive advantage against their
competitors.

4.They should try to reach as many people as possible.

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5.For the organizations that are not much popular amongst the
consumers, should adopt Sales Promotion, as their marketing
strategies.

6.Application of 4A s has also become an important task for all the

organizations. (*4A=Availability, Affordability, Acceptability,
Awareness).

Questionnaire
name:
occupation:
monthly salary:
a) a.less than 10,000
b) b.10,000 25,000
c) c.25,000 50,000
d) d.More than 50,000
address:

1. Which soap u prefer to use?

a) Lux
b) Lifebuoy
c) Dettol
d) Others

2. Which pack u prefer to use?

a) Medium pack
b) Family pack

3. Which tea u prefer to use?

a) Taj mahal
b) Tata tea
c) Brooke bond
d) Others

4. Which tea pack u prefer to use?

a) Sachet
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b) Small pack
c) Medium pack

5. Which tooth paste u prefer to use?

a) Colgate
b) Close up
c) Pepsodent
d) Others

6. Which coffee u prefer to use?

a) Nestle
b) Nescafe
c) Bru
d) Others

7. Which cream u prefer to use?

a) Ponds
b) Fair and lovely
c) Ayur
d) Others

8. which hair oil u prefer to use?

a) Parachute
b) Dabur amla
c) Dabur vatika
d) Others

9. Which biscuits u prefer to use?

a) Good day
b) Marie gold
c) Parle G
d) Others

10. Which detergent u prefer to use?

a) Surf
b) Rin
c) Tide
d) Others
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11. Which shampoo u prefer to use?

a) Sunsilk
b) Head and shoulders
c) Clinic plus
d) Others

12. Which pack u prefer to use?

a) Sachet
b) Small pack
c) Medium pack

13. Which Television you prefer to use ?

a) Onida
b) Beltek
c) Crown
d) others
14. Which bicycle you prefer to use?
a) Avon
b) Atlas
c) Hero
d) Others

15. Which refrigerator you prefer to use?

a) Videocon
b) Kelvinator
c) Godrej
d) Others

16. Which wrist watch you prefer to use?

a) Titan
b) Hmt
c) Maxima
d) Others

17. Which fan you prefer to use?

a) Local fans
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b) Khaitan
c) Polar
d) Crompton

BIBLIOGRAPHY

http://business.mapsofindia.com/rural-economy/state-
development/marketing.html

http://www.ibef.org/economy/ruralmarket.aspx

http://en.wikipedia.org/wiki/Rural_markets

http://www.indianmba.com/Faculty_Column/FC213/fc213.html

http://www.123eng.com/forum/viewtopic.php?p=76117

http://ezinearticles.com/?Challenges-In-Rural-
Marketing&id=1092597

http://www.infibeam.com/Books/info/t-p-gopalaswamy/rural-
marketing-environment-problems-
strategies/9788125916178.html

http://www.naukrihub.com/india/fmcg/

http://www.naukrihub.com/india/fmcg/overview/

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http://www.naukrihub.com/india/fmcg/consumer-class/income/

Aithal K Rajesh,importance &growth of rural markets

Purba basu,research on living style of rural consumers

http://toostep.com/idea/challenges-in-rural-marketing

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