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I. ACKNOWLEDGEMENTS
Lastly we would like to thank our well-wishers and our colleagues who
were a constant source of inspiration and in some cases also motivation as it
ultimately has led to the completion of this project. Finally we would also like
to give due credit to people, who knowingly or unknowingly have guided,
supported and helped us in the completion of this project as without their
support this project would have never seen daylight.
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Rural Marketing
The rural population forms a major portion of the Indian population as seen
below:
Rural
74%
About 75% of the Indian people reside in rural areas. In other words, for every
consumer in the urban area, there are three of them in the rural areas. Though
the proportion of rural population is showing a slight decrease over the years,
but in absolute numbers, the rural population is growing at a higher rate than
the urban population. This large population will require a wide range of
consumable and durable goods and services. At the same time the need of
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Rural Marketing
the rural areas does not automatically guarantee a market, unless it is backed
by income and the resultant purchasing power.
For a vast majority of the rural population, the main occupation is agriculture
and allied activities. The graph below gives the distribution of rural population
as per their occupation pattern.
50% Non-agricultural
Labour
Salary Earners
Notgainfully
27%
employed
About half of the rural population own or lease land to cultivate it for their
livelihood. Another 27% are dependent on these cultivators for their jobs as
agricultural labourers. Thus, a total of 77% of rural population depend on land
only for their living and land is their source of living.
There are others, constituting small proportions, who are engaged in business
like petty shopkeepers or merchants and salary earners like teachers, health
workers and village level officials. The implication of this is that the income
generation in rural areas entirely depends on how the land is used, what crops
are cultivated, how much is marketed, how much is consumed and the
marketing arrangements for the production. If rainfall is adequate, weather
conditions are favourable and appropriate technology is available, the rural
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Rural Marketing
One of the deterrents for marketers to exploit the rural market potential has
been the vastness of the rural market in terms of areas covered and the
location of the rural population. It is much easier to cater to the needs of the
urban population because of their concentration, but it is very difficult in the
case of rural population because of their widespread nature.
The villages are also not uniform in size. Nearly 48% of the villages have a
population of less than 500 persons or about 100 households, which is
probably of no consequence to marketers. This may be acceptable since the
proportion of population covered by these 48% of villages account for only
12% of the total population. Yet it should be borne in mind that the people of
these villages also have land and cultivate and generate some income.
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Rural Marketing
ILLITERATE
100
80 LITERATE
60
40
20
0
Rural Urban
Given the distribution of rural and urban population, it can be seen that the
number of literates in rural areas are more than in urban areas. It is an
interesting got note that has been a considerable increase in the number of
literate persons in rural areas since the last two decades. This has its
implications in communicating with the rural population. It appears to prove
that communication should not prove to be such a big hurdle. Today,
television has proved to be an effective medium for communication with the
rural masses. The telecasting network in the country today covers about 93%
of the population.
Assuming that the entire urban population is covered by the television but the
television, which is only 23%, then nearly 67% of the rural population will be
covered by television. Thus, television reaches a larger segment of the rural
population than any other form of mass media. Though radio is also very
popular, people like to see to believe.
The above factors point that the potential for marketing of goods and services
depends heavily on agriculture, since it is the main occupation in rural areas.
The market for agricultural inputs – fertilizers, pesticides, insecticides, tractors,
irrigation equipment and seeds – has been expanding over the years in rural
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Rural Marketing
areas as the Indian farming is fast becoming market-oriented. But the rural
market has remained a dark area for those manufacturing and marketing
consumables and consumer durables. To successfully exploit the potential
offered by the rural market, there is a need to first understand the rural market
in terms of the characteristics mentioned above. Only a few established
companies – HLL, Lipton, Brooke Bond, TOMCO, and P & G – have been
trapping the potential of the rural market for a long time.
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Rural Marketing
1) Large and Scattered Market: - The rural market of India is large and
scattered in the sense that it consists of over 63 crore consumers from
5, 70,000 villages spread throughout the country.
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Rural Marketing
3. Literacy Level:
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Rural Marketing
The literacy rate has its implication in communication with the rural
population. It appears that communication should not prove a hurdle,
provided appropriate means are chosen.
4. Rural Income:
An analysis of the rural income pattern reveals that nearly 60% of the
rural income is from agriculture. Rural prosperity and the discretionary
income with rural consumers are directly tied up with agricultural
prosperity. The pre-dominance of agriculture in the income pattern has one
more significance-rural demand is more seasonal.
5. Rural Savings:
The rural consumers have been drawn into the saving habit in a big
way. The commercial banks and the co-operative have been marketing the
saving habit in the rural areas for quite some years. Today nearly 70% of
the rural households are saving a part of their income.
6. Significant Aspects:
It can be seen in general sense low purchasing power, low standard
of living, low per capita income, low literacy level and overall low social and
economic positions are the traits of the rural consumers.
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Rural Marketing
The position in the rural market was totally different some twenty years ago. At
present there is a demand for certain articles like T. V., fans, radio, engine oil,
readymade garments, detergents, medicines, etc. New product like toiletries,
baby care products and consumer durables are now getting good support in
the rural market.
Parle Agro is marketing 80% of its sale in the rural areas. Batliboi and Co. Ltd.
is a leading marketer in agricultural implements. Hindustan Lever sells its
products like soaps, shampoos, face cream, etc. in all rural markets on a large
scale.
Kirloskar and Crompton are leading rural marketers in diesel engines and
agricultural machinery.
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Rural Marketing
In the service sector the Central Bank and Canara Bank are the largest banks
in rural India. More and more manufacturers are turning towards rural markets
because the urban are getting saturated.
The Indian rural markets have turned out to be gold mine for the marketers in
the nineties.
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Rural Marketing
are offered for farm products. Various measures like tax exemption in
backward areas, subsidy, concessions, incentives, assistances, literacy
drive in rural areas has brought rapid growth of rural markets.
5. Literacy Growth: The literacy rate is on the increase in the rural areas.
This brings about a social and cultural change in the buying behaviour of
the rural consumer. They are exposed to mass media which create new
demand for goods and services.
6. Growth in Income: The rise in the income resulting from the new farming
strategy is adding meaning and substance to the growing aspirations of the
rural people. Remittances from Indians working abroad have also made a
sizeable contribution to the growing rural income and purchasing power.
8. Marketing Efforts: Firms like Bajaj, HLL, etc., have started penetrating the
rural market realizing the rising expectations and the demand revolution in
the rural India.
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Rural Marketing
1. Rural Market
Strategies
(DEVELOPMENT
STRATEGIES FOR RURAL
MARKETING IN INDIA)
An appropriate segmentation
of highly heterogeneous rural
market and identification of the
needs and wants of different segments will form the very basis for rural
marketing strategies. The strategies of the 4 P’s of the marketing mix would be
an ideal one for the rural market.
a. PRODUCT STRATEGIES:
The following are the product strategies for the rural market and rural
consumers:
2. New Product Designs: The manufacturer and the marketing men can
think in terms of new product designs, keeping in view the rural life
style. E.g. P.V.C. shoes and chappals can be considered suited ideally
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Rural Marketing
5. Brand Name: The rural consumers do give their own brand name on
the name of an item. A brand name or logo is very important for a rural
consumer for identification purposes.
b. PRICING STRATEGIES:
Pricing strategies are linked to product strategies. The product packaging and
presentation also keeps the price low to suit the rural consumer.
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Rural Marketing
kept low by low unit packing like paisa pack of tea, shampoo sachets,
etc.
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Rural Marketing
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Rural Marketing
d. PROMOTION STRATEGIES:
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Rural Marketing
The NCAER has categorized the consumer goods into three categories.
Category I- Products are of immediate use to the family. E.g.- bicycles, fans
etc.
The product or service offered by the marketer has the ability to satisfy the
needs & wants of the customer. Products are physical and tangible. E.g. –
footwear, motorcycle, etc. Services are intangible and people based. E.g. -
health care, etc. The main consideration in individual product/service offer is
developing of product at three levels,
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Rural Marketing
Namely-
Reliability,
Economy,
Durability,
Capability,
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Rural Marketing
Efficiency
The product designers should interact with the marketers to know how the
consumers evaluate the quality of products, since consumers develop their
own norms, beliefs & notions about the quality of products.
Features: Features are extras to a product, which are of value to the buyers.
They are improvements provided for more comfort and convenience. They are
of two types
The consumer is willing to pay for the solutions to the problems he has in
using the product. The features, which capture the attention of the buyer, are
less functional and fancier in nature.
Design and style: Design means the arrangements of parts, form, colour, etc.
so as to bring out an artistic unit with functionality, aesthetics, convenience of
operation, ease of service of service, repair & costs, etc. Good design adds to
the product attractiveness and usefulness. The three components of
personalities are structure, shape & style, which are acquired through design.
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Rural Marketing
HLL has made ‘bubble pack’ shampoos. They are neither sachets nor
bottles & works on the principle of capillary action. The rural markets were
kept in mind & this type of package was developed keeping in mind the
convenience of storage after use.
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Rural Marketing
6. Pricing Methods
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Rural Marketing
iii. Time Pricing: Prices varies by days or seasons. E.g. During summer,
hill resorts charge higher rates.
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Rural Marketing
a) Low Cost/Cheap Products: The price can be kept low by low unit
packing like paisa packs of shampoo sachets etc. This is a very
common strategy which is being widely adopted by many marketers.
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Rural Marketing
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Rural Marketing
1. Increase Sales: The sales person has to identify his own and
customers potential, call on more customers consisting of farmers,
dealers etc. Training and motivating the distributors, dealers etc. help
improve trade sales. Organising campaigns with special emphasis on
farmers’ contacts and demonstration will be important in order to
increase demand for the product. The services of NGO’s can be used
e. g. Colgate Palmolive used NGO’s to promote its toothpaste Colgate
‘Supershakti’.
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Rural Marketing
1. T.V.: It has the potential to become the primary medium for rural
communication, 77% of the villages in India receive T. V. transmission
& 27% of all rural people actually watch T. V.
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Rural Marketing
3. Audio Visual Publicity Vans (AV Vans): The AV unit is very useful for
rural communication. The firm can exhibit films, presentations, slide
shows etc. The van can be used for sales campaigns in addition to
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Rural Marketing
The biggest myth that exists in the minds of most marketers is that rural
is all about traditional dhoti clad villagers living in huts.
The reality however is very different. This clearly depicts that it is now
becoming difficult to differentiate between the rural and urban class. To
understand the case it is important to first understand some rural facts:
Facts on Ownership:
95.9 percent of rural households (HHs) are self-owned
31 percent of rural HHs owns a radio and an equivalent number own a
TV.
27 percent own wristwatches.
8.5 percent of the HHs owns a two-wheeler.
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Rural Marketing
Facts on Consumption:
95 percent of rural India uses toilet soaps.
76 percent uses detergent (powder/liquid).
48 percent uses dental products (toothpowder/toothpaste).
Charcoal, neem sticks, husk, salt and powder mixtures have been some of the
traditional form of oral hygiene products used in rural India. But these products
are losing favor, especially due to the efforts of many organizations and
companies, foremost among them, Colgate. The company claims to have
persuaded about 300 million people into using oral hygiene products in the
country for the last 25 years.
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Rural Marketing
Gilette Colgate
Colgate
HLL
Gilette
Smithkline
HLL
Known as one of the leading brands for oral care in and around the world,
Colgate soon got popular in rural India as well.
Infact the brand has become so generic with the product itself that it is not
surprising to find rural consumers asking for Colgate when they buy
toothpaste or tooth powder or tooth brush. The company, on its part, says that
the rural markets account for about one third of its total sales, the rest coming
on urban sales.
Maintaining a steady market share in the oral care product segment wasn’t
tough job for Colgate, but that’s exactly what it didn’t want. Colgate was
heading for a total monopoly in the rural markets, and it was leaving no stone
unturned for doing the same.
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Rural Marketing
HLL
Smithkline
Smithkline Balsara
Colgate
HLL
‘Aggressive’ is the only word that could perfectly describe the advertising and
sales promotion strategy of Colgate. Colgate stepped up its rural promotion
drives with IDA (Indian Dental Association) to add value. This has been the
stepping stone to the high penetration in rural minds. Since 1976, Colgate has
been doing this through its rural promotion vans and “Young India, Bright
Smiles, Bright Futures”, schools dental education program.
After conducting a small research in the rural areas Colgate concluded with
five things that were common in all their rural consumers across India, they
were:-
They have disposal income (i.e. because their needs are limited, so
lesser scope to spend.)
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Rural Marketing
High quality products was always a plus point of Colgate all they had to do
was to now tap the still unattended rural markets and change their habits i.e.
from the usage of manjans and datoon to toothpaste and tooth powder. In
1998, Colgate contacted 6 million people in 20,000 villages of which 15,000
villages had not experienced the availability of toothpaste and toothpowder let
alone toothbrushes.
Sampark had limited budget to their disposal. Going in for mass media would
not prove to be costly but the reach would be limited as, still only very few
people own and possess a T.V. or a radio.
HLL Colgate
Dabur
HLL
Dabur
Colgate
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Rural Marketing
Sampark wanted something that had far and wide reach that is why Sampark
decided to their advertising by door to door selling. Sampark hired people from
a certain locality who knew the local language, jargons and idioms. This not
only helped Colgate communicate easily with the consumer but was also
effective in sending the right message across to the rural consumer, the other
plus point of this message was that the communication gap was reduced to a
large extend. These people would move about in the villages telling the people
about the pros of using advanced oral care products and the cons involved in
tradition oral care system, this was quite difficult as rural people always felt
that natural was the best. Colgate trained these salesmen to convince the
rural population and make them try the free sample that Colgate was
distributing free.
The next best option that ‘Sampark’ choose after door to door selling was
‘publicity vans’ also called as A/V vans. Seventy promotion vans do the rounds
of the country and educate rural folks on oral hygiene products such as
toothpaste, toothpowder and toothbrushes. These vans used to travel from
village to village and depending upon the market day in that specific village.
These vans also did a number of other activities at a time such as spot selling,
sampling, retailing etc. The vans used to be parked in strategic locations, they
were highly decorated so as to get more curious eyes and in the process
educate the rural folk. The roving Colgate vans, after screening a 22 minute
film on oral hygiene that explains how to use the product, offer sampling at
stalls setup near the van. 60 percent of the towns were covered by Colgate
with their own distribution strategy and the remaining 40 percent was covered
by other distributors. There are puppet shows done in the villages educating
the villagers about the plus points of using modern hygiene products.
Educational films were also shown in between movies in theatres, these are
usually 10-40 seconders which were educational and used to feature either
actors, local lenders, for a farmer just like the ones viewing the documentary,
later on after the movie would end free samples were distributed to the
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audience, these tactics are also used in Haats and Melas thought the length
and breadth of India. The thrust towards promotion through schools has done
wonders in changing the awareness levels as well as a shift towards the new
decision-makers in the rural families.
PROJECT ON
TECHNIQUES USED IN RURAL MARKETS
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Rural Marketing
SUBMITTED BY:
CONCLUSION
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Rural Marketing
Index
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