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Rural Marketing

What is Rural?
 Any habitation with a population density of less than
400 sq. km., where at least 75% of the male
population is engaged in agriculture and where there
exists no municipality or board (Census 2001).

 The rural and semi urban area is defined as all other

cities other than the 7 Metros (LG India).

 Locations having shops or commercial

establishments with up to 10,000 people are treated
as rural (Sahara, ITC, HUL)
Rural Marketing
 A function that manages all activities involved in assessing,
stimulating, and converting the purchasing power of rural consumers
into an effective demand for specific products and services and
moving these products and services to the people of rural areas
(Kashyap and Raut, 2008).

Urban Rural
consumables and Farm and non -farm
durables goods and services
Rural (Organised) (Unorganised).

Handlooms, textiles
Urban (Semi- organised)
Evolution Of Rural Marketing

 Phase 1 (Before 1960s)

 Phase 2 (1960s-1990s)

 Phase 3 (1990s to present)

Size of the Rural Market
 The total size of the rural market is estimated at
Rs. 1,23,000 crore, which includes FMCGs,
Durables, Agri products and 2/4 wheelers.

Estimated Annual Size : Rural Market

FMCG Rs.65000 crore

Durables Rs.5000 crore

Agri- Inputs Rs.45000 crore

2/4 Wheelers Rs.8000 crore

Total Rs.123000 crore
Source: Francis Kanoi 2002
Factors Affecting Consumer Behaviour.

1. Culture
2. Regional Influences
3. Social Factors
4. Product and Status Symbol
5. Technological Factors
6. Economic Factors
7. Political Factors
Product Strategy and the 4As

 Availability
 Affordability
 Acceptability
 Awareness

Companies like HUL, Colgate Palmolive,

Coca Cola and LG have been able to
address these challenges successfully.
Pricing Strategy
 Internal Influences
- Cost
- Pricing Objective
* Profit Maximization in the long run
* Minimum Return on Sales Turnover
* Deeper Penetration of the Market
* Increase Sales Volume and Market Share
 External Influences
- Customers
- Suppliers
- Competitors
- Legal Environment (in India companies need not worry)
 Optional Product Pricing
 Captive Product Pricing
 Low Price Points
 Avoid Sophisticated Packaging
 Highlight value, not price

 Market Entry Strategies

- Penetration Pricing
- Coinage Pricing
- Psychological Pricing
Distribution Strategy
 Problems-
2. Large number of small markets
3. Poor connectivity
4. Multiple tiers (intermediaries) leading to
higher cost.
5. Low density of shops per village.
6. Poor stocking system
7. Poor visibility and display of products
Target the!

 Wholesalers
 Retailers
 Haats
 NGOs having SHGs
 Mobile Vans
 Direct to Home
 Cooperatives
Communication Strategy

- Heterogeneity and spread
- Understanding the rural Audience
 Proper profiling of the target audience is required-

* Who uses the brand?

* Who buys the brand and Why?
* Who decides which brand is to be bought?
Rural Media
Conventional Mass Non-conventional
Media Media Personalized Media

Television Haat and Mela Direct Mailer

Folk Media (Puppet Demonstrations and
Radio Sows) leaflets

Press Video Van Word of Mouth

Cinema Mandi
Outdoor: Wall Painting,
Hoarding Opinion Leaders
Brand Building
 In rural India the first mover brands have become
generic brands- detergent powder came to be
identified with Surf, vegetable oil with Dalda.
 Issues to be considered-
* Brand Name Development
* Creating a Brand Identity
* Building a brand Image
* Stickiness

 Pradeep Kashyap and Siddhartha Raut, The

Rural Marketing Book, 2008.
 Sanal Kumar Velayudhan, Rural Marketing :
Targeting the Non-urban Consumer,2002