RURAL MARKETING

RIJO FARESH LIJO SHOBHA ARCHANA

DEFINTION

Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas

RURAL MARKETING

Rural marketing facilitate flow of goods and service from rural producers to urban consumers at possible time with reasonable prices, and agriculture inputs/ consumer goods from urban to rural.

PRODUCT GOES TO
1. Urban to Rural: Marketers in rural areas. This includes: Pesticides,FMCG Products , consumer durables etc 2.Rural to Urban: They are generally middlemen, agencies, govt. cooperatives,etc who sell fruits,vegetables,pulses 3.Rural to Rural: This includes selling of agricultural tools, cattle's, carts and others to another village in its proximity.

IMPORTANCE
72% OF THE POPULATION OF RURAL CONTRIBUTES NEARLY HALF OF THE COUNTRYS GDP. RURAL IS BIGGER THAN URBAN

FMCG DURABLES

53% 59%

FIGURES FMCG- RS 6500 BN CONSUMER DURABLES- RS 500 BN AGRI-INPUTS- RS 4500 BN AUTOMOBILES(2&4) WHEELERS- RS 800 BILLION

According to Indian market demographics 2004, approximate size of rural market ranges from 300500 million. Absolute size is becoming bigger than that of urban population Purchase of CTV,Washing machine increased by 20% Since 2002, consumer expenditure in rural India has risen by 9%.

FUTURE
IN 2015 RURAL INDIA WILL CONSUME 65% OF THE GOODS PRODUCED IN THE COUNTRY IN 20 YRS RURAL INDIAN MARKET WILL BE LARGER THAN THE TOTAL CONSUMER MARKETS IN COUNTRIES SUCH AS SOUTH KOREA OR CANADA TODAY AND ALMOST 4 TIMES THE SIZE OF TODAYS URBAN MARKET

RURAL AGRI - MARKETING IN INDIA WITH SPECIAL REFERENCE TO AGRICULTURAL PRODUCE IN INDIA

ENVIRONMENT
The difference between rural and urban markets on the basis of various socio economic factors, most dominant among them being the source of income, the frequency of receipt of income, the seasonal nature of income and consumption. Rural markets are small, non- contiguous settlement units of village relatively low infrastructure facilitates, low density of population, their life styles also being different. Rural consumers are mostly farmers whose income receipts are dependent on the vagaries of nature

AGRI-MARKETING
Rural population has been increased about 74% of the total population; the demand for products and services has increased a lot in rural areas. Green revolution in the North and white revolution in the West has brought about a new prosperity in the lives of rural people. Government emphasis on rural development has caused significant changes in the rural scenario. Moreover, the special attention given for infrastructure development through the successive Five-year plans has improved the buying and consumption pattern of rural people.

THE RURAL AGRO PRODUCTS:

The rural agro-products are * Fruits & Vegetables * Grains * Flowers

RURAL SALE PRODUCTS

Milk & poultry products Handicrafts and Hand loom products Tribal village products like tamarind, Lac, soapnut etc

PRODUCT STRATEGIES
Existing & New Products Product features service quality price & performance relationship Sense & Simplicity Phillips Global Campaign Urban market successes could be rural market failures Appropriate new product development processes

Product Levels

CORE BENEFIT

BASIC PRODUCT

EXPECTED PRODUCT

AUGMENTED PRODUCT POTENTIAL PRODUCT

CONTD
Product Level Core Benefit Basic Product Expected Product Characteristics Example Fundamental Entertainment benefit/ services Benefit/service into tangibles Attributes & conditions buyers normally expect Exceeding customer expectations Television Set Digital sound, flat screen Rural Vs Urban Same Same Appearance of differences in expectations Pleasant surprise for rural customer

Augmented Product

Battery Operated TV

Potential Product

Encompassing all augmentations & transformations

Jolly Startek TV

Uniquely rural value proposition

PRODUCT DEVELOPMENT STAGES

Stage
Idea Generation
Searching

Marketing Activities
for new product ideas

Idea Screening

Select

the most promising ideas and drop those with only limited potential. Study the needs and wants of potential buyers, the environment and competition.

Concept Testing

Describe

or show product concepts and their benefits to potential customers and determine their responses. Identify and drop poor product concepts. Gather useful information from product development and its marketing personnel.

Business Analysis

Assess

the products potential profitability and suitability for the market-place. Examine the companys research, development, and production capabilities. Ascertain the requirements and availability of funds for development and commercialisation. Project ROI.

Product Development

Determine

technical and economic feasibility to produce the product. Convert the product idea into a prototype. Develop and test various marketing mix elements.
Conduct

Test Marketing

market testing. Determine target customers Reactions. Measure its sales performance. Identify Weaknesses in product or marketing mix.

Commercialisation

Make

necessary cash outlay for production facilities. Produce and market the product in the target market and effectively communicate its benefits.

PRICING STRATEGIES

ISSUES IN PRICING
Internal & external factors Selecting pricing methods Pricing adaptations Low price points Simple packaging utility around packaging material Highlighting value

PRICE ADAPTATIONS ( INDICATIVE)

Product sharing services, Example: Tractors Product Bundle pricing, Example: HUL Operation Bharat Free gifts may sometimes not work in rural areas Special event pricing- Hero Honda Rs. 500 campaign

RURAL DISTRIBUTION CHALLENGES

Large number of small markets Dispersed population and trade Poor connectivity Low availability of suitable dealers Inadequate banking/ credit facilities

Poor product display and visibility

Poor communication of offers and schemes

LEVELS OF DISTRIBUTION
Level Partner Location

1
2

Company Depot/ C & FA

Distributor/ Van Operator/ Super Stockist/ Rural Distributor Sub Distributor/ retail Stockist/ sub stockist/star seller Wholesaler Retailer

National/ State level

District level

Tehsil HQ, towns and large villages

4 5

Feeder towns, large villages, haats Villages, haats

DISTRIBUTION ADAPTION( INDICATIVE)

Hub and Spoke Model, Example: Coca Cola Use of Affinity groups, Example: Project Shakti Haat Activation, Example: Colgate Syndicated distribution, Example: Cavin Care & Amrutanjan Use of marketing co-operatives, Example: Warna Bazaar in Rural Areas Mobile traders, Example: FMCG companies

PROMOTION STRATEGIES

Advertising

Sales promotions coupons, contests,

demonstrations and sampling, Example: Tata Shaktee Haat Hungama Direct marketing, Example: Videocon Publicity, Example: Project Shakti and AP Online Using a direct selling through a sales force, Example: Swasthya Chetna for Lifebouy

CONTD

Push strategy sales force and trade promotion

Pull strategy advertising and consumer promotion