What is meant by Rural Marketing?

Rural marketing is promotion of a company's products in the rural market by using strategies
which differs from that of urban market, the rural market is more price sensitive but it has
preference for quality. Rural marketing is the process of marketing in rural areas. it includes the
adoption of various marketing strategies and policies in rural market with a view to convert the
needs and wants of rural people into demand.

What is meant by opinion leader?

Influential members of a community, group, or society to whom others turn for advice, opinions,
and views. Individual whose ideas and behavior serve as a model to others. Opinion leaders
communicate messages to a primary group, influencing the attitudes and behavior change of their
followers. Therefore, in certain marketing instances, it may be advantageous to direct the
communications to the opinion leader alone to speed the acceptance of an advertising message.
For example, advertisers may direct a dental floss promotion to influential dentists or a fashion
campaign to female celebrities. In both instances, the advertiser is using the opinion leader to
carry and "trickle down" its message to influence its target group. Because of the important role
opinion leaders play in influencing markets, advertisers have traditionally used them to give
testimonials.
What is meant by segmentation?

Process of defining and sub-dividing a large homogenous market into clearly identifiable
segments having similar needs, wants, or demand characteristics. Its objective is to design a
marketing mix that precisely matches the expectations of customers in the targeted segment. Few
firms are big enough to supply the needs of an entire market, most must breakdown the total
demand into segments and choose the one or few the firm is best equipped to handle. Four basic
factors that affect market segmentation are (1) clear identification of the segment, (2)
measurability of its effective size, (3) its accessibility through promotional efforts, and (4) its
appropriateness to the policies and resources of the firm. The four basic market segmentation-
strategies are based on (a) behavioral (b) demographic, (c) psychographic, and (d) geographical
differences.
What does the term Consumer Behavior mean?

In marketing, understanding how and why consumers behave. An appropriate marketing

stimulus is formulated based on customer personality and needs to prompt sales.
Consumers adjust behavior to the marketplace based on internal needs and interpersonal
factors. it includes Perception, Personality, Values, Beliefs, Attitude
 •The psychology of how consumers think, feel, reason, and select between different alternatives
(e.g., brands, products, and retailers);

•The psychology of how the consumer is influenced by his or her environment (e.g., culture,
family, signs, media);

What is meant by core product? Give one example.

Core product the perceived or real core benefit or service to be gained from a product. The
central benefit or purpose for which a consumer buys a product or service. The core product
varies from purchaser to purchaser. A company's core product is the number 1 thing the
company sells most of. For example Kentucky Fried Chicken's core product is chicken. All the
other products such as mash potatoes, corn, biscuits are not the core product, but rather
additional products.

Core products are central to the company's performance and make the most money that sustain
the business. Core products are also usually the first products that the company created and
sustained itself from its founding like Windows OS for Microsoft, Macintosh for Apple Inc.,
Google Search for Google, etc. Therefore there is emphasis placed on the profitability of core
products while working on other products hoping that they will become a competency for the
company. The products that make the most profit are usually the core products. Other products
that are not considered core products are called side projects, side products and experimental
products, etc.

Mention the stages of Innovation-adoption Process?

This extension of the product life cycle was developed by Everett M. Rogers in 1962 and simply
looks who adopts products at the different stages of the life cycle.Rogers identified five types of
purchasers as the product moves through its life cycle stage. He suggested

1. Innovator who make up 2.5% of all purchases of the product, purchase the product at the
beginning of the life cycle. They are not afraid of trying new products that suit their lifestyle and
will also pay a premium for that benefit.
2. Early Adopters make up 13.5% of purchases, they are usually opinion leaders and naturally
adopt products after the innovators. This group of purchasers are crucial because adoption by
them means the product becomes acceptable, spurring on later purchasers.

3. Early Majority make up 34% of purchases and have been spurred on by the early adopters.
They wait to see if the product will be adopted by society and will purchase only when this has
happened. They early majority usually have some status in society.

4. Late Majority makes up another 34% of sales and usually purchase the product at the late
stages of majority within the life cycle.

5. Laggards make up 16% of total sales and usually purchase the product near the end of its life.
They are the ‘wait and see’ group. They wait to see if the product will get cheaper. Usually when
they purchase the product a new version is already on the market. Some may call Laggards,
bargain hunters!

Mention the stages of buying decision process?

Stages of buying decision process:

Problem Recognition - This stage refers to recognizing a need or a want that has to be satisfied.

Information search - This stage refers to the part of the decision process where in the consumer searches
information from different sources about the product he needs to buy. A successful information search leaves a
buyer with possible alternatives.

Evaluation of Alternatives - In this stage the consumer evaluates the alternatives he has come across in the
prior stage.

Purchase decision - This is a crucial stage where in the consumer decides on a alternative and proceeds
further about when to buy and the mode of purchase.

Purchase - This stage refers to the actual purchase made by the consumer depending on the mode, payment
conditions and the product availability.

Post-Purchase Evaluation - This stage will decide if the consumer will purchase the same product again or if
he is satisfied with the applications of the product in relation to his needs. This can be improved by warranties,
after sales services.
What is meant by Rural Marketing Research?
To analyze the present promotion strategy of few brands in rural markets
To measure the success of rural marketing campaign of few brands in Terms of consumer
appreciation.
To study the determinants of specification factors which can decide the success the rural
promotion strategy.
To evaluate the effects of adopting the specific brand ambassadors in the rural marketing
context.

Typical Problems in Rural Research

1.Low literacy levels require innovations in questionnaire design scales
2.Wide geographical dispersion requires long travels
3.A large number of languages and dialects, requiring multiple translations
4.Non-availability of working population at normal places of residence
5.Poor access to women respondents
6. Villages layout based on caste lines, requiring innovative sampling
Mention any 2 methods of classification of rural markets?
What are the prerequisites for effective segmentation?

To be maximally useful, market segments must exhibit five characteristics:

1. Measurable and Obtainable: The size, profile and other relevant characteristics of
the segment must be measurable and obtainable in terms of data. If the information
is not obtainable, no segmentation can be carried out.

2. Substantial: The segment should be large enough to be profitable. For consumer

markets, the small segment might disproportionately increase the cost and hence
products are priced too high.
3. Accessible: The segment should be accessible through existing network of people
at an affordable cost.
4. Differentiable: The segments should be different from each other and may
require different 4Ps and programs.
5. Actionable: The segments which accompany wishes to pursue must be actionable
in the sense that there should be sufficient finance, personnel, and capability to
take them all.

Explain the buying patterns based on the degree of Involvement with

suitable examples?
“Rural Consumers are brand Loyal”. Evaluate the
statement and examine the Innovation- adaptability
of rural consumers with suitable examples?

The concept of branding has been a late entrant in rural markets. Consumers have graduated d to
branded products with increased affordability as a result of increasing rural incomes in recent
years. A brand name in the rural context facilitates easy brand recall and in drawing any colours,
visual or numeric association. But some brands are known by their names, for example, Nirma
and Baba Zarda. The choice of Sampoorna as the name for its rural television brand helped LG
as it is a Sanskrit word meaning "wholesome" and hence it cuts across all regional linguistics
barriers.

The challenges in creating a brand identity in rural involve the need to relate the brand with the
rural lifestyle, or with appropriate status symbols, or with the rural environment. As most brands
are introduced in urban markets and then move to rural, creating a brand identity in rural
becomes a tough challenge. Britannia Tiger biscuits created an identity associated with a smart,
active and sharp child.

Building a brand image

The brand should have a personality of its own. It should emote, empathize and talk to its
consumers. Such an ability helps in brand connect with rural audiences and contributes a great
deal to brand equity and competitive advantage. Mahindra & Mahindra have maintained their
sterling image in rural. The Bhumiputra (son of soil) series of tractors, with its rugged features
and the Sarapanch (village head) series have helped to improve sales. The sarapanch brand
helped to draw close brand recognition between the product and the head of the village. In this
way, it provided an opportunity to the consumer to relate himself with the sarpanch, who
commands high status and respect in the village. A significant percentage of sales in the rural
areas comprise of branded products. Studies also have found out that the brand loyalty in the
rural areas is much higher than that found in the urban ones. This only happens when the brand
has found an acceptance in the rural market as the one offering good value proposition. But
building brands in rural areas is a different science altogether. This requires a specific committed
focus and may not happen as spill over from urban market or by doing slight modification in
communication and brand building efforts that were planned for urban markets.

The following tools, approaches and strategies have been employed by different organizations, to
successfully build their brand in the rural markets:

CUSTOMIZATION

An in-depth study of rural markets is the prerequisite to find out the needs, wants and aspirations
of rural consumers by directly contacting them. This can be followed with creating or
'reengineering' a product to make it relevant to the need of rural consumers. The entire brand
building efforts has to be built on the basis of their needs and aspirations from a specific product
category and the corresponding value provided by the brand.

RELEVANCE

It begins with the brand name itself and it is important that the brand name or the punch line is in
vernacular language and is in tune with the ethos of the market and the social milieu of the
market in which the product is going to be sold. The same logic applies to the colour, logo,
slogan and every aspect of communication so that it strikes a right chord with the rural consumer
and they can relate to the message. The successful advertisement campaign by Coca-Cola with
the tagline 'Thanda matlab Coca-Cola', has a celebrity endorser not as a hero but as one who is
depicting an identity of population of different regions, speaking in the regional idiom; it was a
campaign to which audiences could relate to.

MEDIA

The media selected to promote the brand is very important, as the conventional mass media may
not prove to be very effective when used alone in the rural market. Therefore, organisation
should select other below the line media as well; to arouse the interest of rural consumers. The
media selected should build a desire for a particular brand i.e. live demonstrations, or contests
depicting the qualities and the strengths of a given product. Demonstration vans with audiovisual
equipments , which clearly demonstrate how a given product will solve the existing problems of
rural consumers, are likely to have much deep-rooted impact, than the short commercial on TV.
The brand building, which is done in the Mandis, Melas and other gatherings, can be followed by
the presence of the organisation in the regular Haats and Mandis for live demonstration of the
benefits and actual sales of a product. Because of high level of interaction, haats can be an
effective medium for rural advertising. Villagers are in buying mood at the haats and mandis.
Around 7,600 mandis , all over India provide a good opportunity to have direct interaction with
up to 200 farmers a day.

MESSAGE

Message should be in the local parlance and such that the rural audience can easily decipher the
intended meaning. Message should meet the rural sensibilities and should be modified in
accordance with the cultural variation from one region to another. Simple 'Slice of life' message
with touch of emotions and storyline are more effective with rural folks. Commercials with
gimmicky hi-tech story that is fast paced may not work well with the rural audience. Message
should be utilitarian and narrating the functional benefits of the product. Rural consumers have
strong visual sense. As they relate more with logos, colour and symbols, icons. Therefore, these
have to be built prominently in the overall communication. Otherwise the entire brand building
effort can go haywire.

RECOGNITION
The vast multitude of the rural population either does not understand English or even is illiterate.
Therefore, it becomes extremely important that the illiterate rural consumers or those who can
not understand English can be certain that they are getting what they are thinking of or desiring
to have and not the cheap imitation or a fake product having a similar name.

WORD OF MOUTH PUBLICITY

Rural communications effort undertaken by an organization should be such that it can generate a
lot of publicity in the oral collectivist culture of rural India. Therefore, targeting the right set of
opinion leaders with the campaigns which lead to oral publicity in the region is more likely to
develop the brand recall than the five or ten seconds commercial on the TV, which the rural
consumers are likely to forget at the time of the purchase.

The rural consumers want more credible information and in order to be doubly sure they prefer
to hear from other people whom they feel to be more dependable than the TV or print media
advertisement. The stories they hear from others are more believable in the from of hints and
tips.

MARKETING INNOVATIONS

FMCGs have come up with creams and soaps @ Rs 5,hair oil and shampoo sachets @ Re 1 and
small Coke @Rs 5. To develop a product to suit the rural scenario,

•Companies came up with special rural products, likeChic Shampoo sachets @ Re 1, Parle-G
Tikki Packs @Rs 2, customised TVs by LG, Shanti Amla oil by Marico.All these brought
positive results for them

Examples of Innovations in Rural Marketing Mix

ICICI BANK customized their rural ATMs, so they can operate biometric authentication. ICICI
rural ATMS are battery operated so that power failure is not issue.

Nokia develop affordable Mobile phones for rural markets with unique features such as local
language capabilities, present time/ call limits.

•Philip develop a TV ‘ Vardaan’ for rural markets. This TV work on the voltage 90-270 volts.
•Philips developed ‘ Free Power radio’ this radio do not require power and battery also. it run on
simple winding of level provided in the set. The price of this attractive set is Rs. 995.

ITC e-choupal

E-choupal is an innovative way of applying new technologies for the poor farmers by ITC—one
of India’s leading corporate houses which had a diversified product portfolio encompassing
cigarettes and tobacco, packaging, specialty papers, paperboards, hotel, retailing, IT and agri-
exports. ITC’s e-Choupal helps the farmers to take decisions regarding when and whom to sell
their products in order to gain more profits with the help of the Internet by analyzing the ratings
of different mandis. The echoupal initiative was aimed at network villages through the Internet in
order to procure agricultural products from the farmers for export purposes in an efficient and
effective manner. E-choupal has enabled farmers to sell their produce more conveniently and
atmuch better prices than what they used to sell to the private traders and the middlemen.
Starting with just six e-choupals in Madhya Pradesh in June 2000, ITChas successfully managed
to establish over 1,200 echoupal centers in almost 6,500 villages in India by December 2002. It
has educated the poor anduneducated farmers on how to conduct e-commerce transactions with
ease and to get themselves out of the clutches the middleman. Echoupal has helped farmers
inpricing their crops and taking decisions on when and where to sell their produce to get more
profits. Similarly, ITC in its e-Choupal initiative offers additional services like selling seeds,
fertilizers and crops insurance to support its profitability.

Amul

In the 1950s, the life of farmers in the Kaira district of Gujarat was as miserable as that of its
counterparts in other parts of India. These farmers were frustrated with the erratic climatic
conditions, lack of proper infrastructure and the continuous exploitation of strong middlemen
who reaped the benefits of their hard toil. Though they had the resources of making additional
income from milk and other dairy products, due to the absence of a proper distribution network,
farmers were forced to sell these products at throwaway prices to the usual traders and the strong
middlemen who controlled the marketing channels. The continuous exploitation by these traders
led these farmers to a win-lose situation. Then, the farmers realized that this exploitation cannot
be stopped until and unless they pooled in their resources and marketed their own products. This
led to the formation of Amul.

Today, Amul has become a household name. With the support of professional organizations and
other NGO’s, what started with a cooperative movement in Anand in the 1940s has grown from
one village to around 10,755 villages; from a few liters of milk to 6 million liters of milk a day
and various other milk products; and the most important point, from a few farmers to more than
two million farmers spreading all across Gujarat. It has become a firm which is collectively
owned and controlled by the farmers. The logistics adopted by Amul in collecting more than 6
million liters of milk per day from 10,755 village cooperative societies spread throughout
Gujarat and then processing it to produce the final packaged milk and milk products have set
new standards in logistics management in the country. Amul is a pattern of cooperative farming
which is collectively owned, operated and controlled by the farmers.

Companies are finding Rural Markets increasingly attractive. Rural population is gradually
getting urbanized and has a great potential and improving purchasing power. The 4 As-
Acceptability, Affordability, Availability, Awareness has to be effectively adopted in order
To capture the untapped potential of the rural consumers. With the initiation of various rural
development programs there have been an upsurge of employment opportunities for the rural
poor.

Briefly explain the factors that have made rural marketing attractive.?

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.

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.

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

* Infrastructure is improving rapidly.

- In 50 years only 40% villages connected by road, in next 10 years another 30%.
- More than 90 % villages electrified, though only 44% rural homes have electric
connections.
- Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is
connected by STD.
* Social Indicators have improved a lot between 1981 and 2001
- Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41%
to 23%)
- Percentage of BPL families declined from 46% to 27%
- Rural Literacy level improved from 36% to 59%
* Low penetration rates in rural so there are many marketing opportunities.

merchandising and point of purchase promotion. Campaign like this, which can reach
millions, costs twice as much in urban area
Number of factors have been recognized as responsible for the rural market boom to come
into existence:

1. Increase in population and hence increase in demand.

2. A marked increase in the rural income due to agrarian prosperity.
3. Standard of living is also increasing in rural areas.
4. Large inflow of investment for rural development programmes from government and
other sources.
5. Increased contact of rural people with their urban counterparts due to development of
transport and wide communication network.
6. Increase in literacy and educational level and resultant inclination to sophisticated lives
by the rural folks.
7. Inflow of foreign remittances and foreign made goods into rural areas.
8. Change in the land tenure systems causing a structural change in the ownership patterns
and consequent changes in the buying behaviour.
9. Rural markets are laggards in picking up new products. This will help the companies to
phase their marketing efforts. This will also help to sell inventories of products out dated in
urban markets.

What makes Rural Markets Attractive?

Rural market has following arrived and the following facts substantiate this.

* 742 million people

* Estimated annual size of the rural market
- FMCG Rs. 65,000 Crores
- Durables Rs. 5,000 Crores
- Agri-inputs (incl. tractors) Rs. 45,000 Crores
- 2 / 4 wheelers Rs. 8,000 Crores
* In 2001-02, LIC sold 55 % of its policies in rural India.
* Of two million BSNL mobile connections, 50% in small towns/villages.
* Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT)
* 41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in urban)
with cumulative credit of Rs. 977 billion resulting in tremendous liquidity.
* Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these
towns on Rediff online shopping site
* 42 million rural HHs availing banking services in comparison to 27 million urban HHs.
* Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in
urban

EMERGING TRENDS IN MARKETS

ONLINE RURAL MARKET (INTERNET, NICNET): Rural people can use the two-way
communication through on – line service for crop information, purchases of Agri-inputs,
consumer durable and sale of rural produce online at reasonable price. Farm information
online marketing easily accessible in rural areas because of spread of telecommunication
facilities all over India. Agricultural information can get through the Internet if each village
has small information office.

INFORMATION THROUGH LOCAL AGRICULTURE INPUT DEALERS Most of the dealers

have direct touch with the local farmers; these farmers need awareness about pests,
decease, fertilizers, seeds, technology and recent developments. For this information,
farmers mostly depend on local dealers. For development of rural farmers the government
may consider effective channel and keep information at dealers, for farmer education hang
notice board and also train the dealer recent changes and developments in agriculture.
National Chain Stores: large number of stores set up in different rural areas throughout the
country by the same organization for marketing its products. Thus national chain stores can
serve large number of customers in rural area.

COST BENEFIT ANALYSIS Cost benefit can be achieved through development of

information technology at the doorsteps of villagers; most of the rural farmers need price
information of agri-produce and inputs. If the information is available farmers can take
quick decision where to sell their produce, if the price matches with local market farmer no
need to go near by the city and waste of money & time it means farmers can enrich their
financial strength.

NEED BASED PRODUCTION Supply plays major role in price of the rural produce, most of
the farmers grow crops in particular seasons not through out the year, it causes oversupply
 in the market and drastic price cut in the agricultural produce. Now the information
technology has been improving if the rural people enable to access the rural communication,
farmers awareness can be created about crops and forecasting of future demand, market
taste. Farmers can equates their produce to demand and supply, they can create farmers
driven market rather than supply driven market. If the need based production system
developed not only prices but also storage cost can be saved. It is possible now a days the
concept of global village.

MARKET DRIVEN EXTENSION Agricultural extension is continuously going through

renewal process where the focus includes a whole range of dimensions varying from
institutional arrangements, privatization, decentralization, partnership, efficiency and
participation. The most important change that influences the extension system is market
forces. There is a need for the present extension system to think of the market driven
approach, which would cater the demands of farmers.

PROCESSING INDUSTRY India is the second largest producer of fruits and vegetables in
the world with an annual production of more than 110 million tones of fruit and vegetable
only 1.3 percent of the output is processed by the organized sector commercially, the
reason higher consumption in fresh form. However, as the packaging, transportation and
processing capacities increase, the market for processed fruits and vegetables is projected
to grow at the rate of about 20 % per annum. 100 % export oriented units (EOU) and Joint
venture units required improving the processing industry.

APANAMANDI / KISAN MANDI / RYTHUBAZAAR There is a need to promote direct

agricultural marketing model through retail outlets of farmer's co-operatives in urban areas.
The direct link between producers and consumers would work in two ways: one, by enabling
farmers to take advantage of the high price and secondly, by putting downward pressure on
the retail prices.

RURAL AGRI- EXPORT Rural produce, raw fruits and vegetable, processing goods, have
the potential market in Asian, Europe and western countries. Particularly soudhy countries
have commendable potential for Indian rural produce.

Integrated Marketing Under this concept, both the supply of inputs and servicing of
inputs are undertaken at the same point or by the same company.

Briefly explain the role of opinion leaders in convincing rural consumers?

Opinion
Opinion leaders are the filters of ideas and information. Each industry, issue, interest and
ideology has its own opinion leaders. They are change agents and active media users.
Opinion leaders engage with the media where their ideas are spread to the wider world of
those who care about the industry, issue, interest or ideology. Opinion leaders shape
business and industries, influence study and debate, spread ideas, expand the conversation
and affect policy decisions. Spreading Ideas and Expanding the Conversation Opinion,
debate and change play out within the media. Without professional journalists,
writers and the blogosphere, the ideas and issues of opinion leaders would not be
heard. Journalists and Media Journalists inform and advance what opinion leaders
are saying. Media personalities adopt issues and widen the audience. Opinion
leaders rely on journalists and the media to spread opinion and add to the debate.
Many journalists are opinion leaders in their own right, as they develop a following
and a recognized expertise on a particular topic. Many Post journalists are sought
after for their opinions on government, business, policy and culture. Post
journalists are often seen in media beyond our own pages, invited to represent
their valued opinions. Independent Writers and Bloggers The Internet has
spawned an (arguably) more literate society of idea exchange. The ideas of
opinion leaders bounce around the Internet and are discussed by many.
Individuals independent of any business or organization can rise to be a well
respected and well-read opinion leader in a particular field. Some of these maybe
former business or government leaders, now publishing books, blogging or
otherwise influencing opinion independent of big institutions.

The opinion leaders are the most influencing part of promotion strategy of rural promotion
efforts. The experience of agricultural input industry can act as a guideline for the marketing
efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very
important factor.