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Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Chapter 1

The Call of Rural India

Rural Marketing, 2e

Define rural India and rural markets

Identify common rural myths

Understand the rural marketing myths and the challenges


related to it

Understand the characteristics of the evolving rural


consumer

Describe the emerging rural India

Rural Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Learning Objectives

Organization

Definition of Rural

Limitation

Census

Several hamlets demarcated by


physical boundaries
Towns are urban areas that satisfy:
Minimum population 5,000
Population density > 400 per sq.
Km.
75% of the male population
engaged in non-agricultural
activities

The term rural


is not defined,
nor is the upper
limit of
population for
villages

IRDA

RBI
Rural Marketing, 2e

Similar to Census except that the


percentage for male population in
towns is 25% and not 75%

Rural: All locations with a population


of up to 10,000
Semi-urban: All locations with a
population between 10,000 and
100,000

Widening of
definition allows
a larger market
to be considered
as rural
Distinction
defined only by
population

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Definition of Rural

Organization

Planning
Commission

Sahara

Definition of Rural

Limitation

Towns with population up to


15,000 are considered rural

Town
characteristics
not defined

Locations with shops/commercial


establishments up to 10,000
population.

Town or village
characteristics
not defined

All population centres other than


LG Electronics the 7 metros are considered rural
or semi-urban
Rural Marketing, 2e

Population
criteria is not
considered

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Definition of Rural

Rapid urbanization
Urban increase rate only 0.75% higher than rural and
showing a slowing trend largely due to the National Rural
Employment Guarantee Scheme (NREGS)
An agrarian economy
Non-farm activity already 60%; expected to rise to 70% by
2020
This increases family income and provides a more constant
stream of income to rural households.
A higher buffer from risks involved in farming

Rural Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Rural Myths

The 4 Ps of marketing price, product, place and promotion


replaced by 4 As in rural markets

Rural Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Rural Marketing Mix

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Rural Marketing Mix

Rural Marketing, 2e

Value driven and looks for products that add to earning


capabilities or to status

Increasing literacy and exposure to mass media, increasing


aspiration levels

Better road infrastructure leading to increased mobility

Highest change amongst children and youth, increasing


their role as influencers

Rural Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

The Evolving Rural Consumer

Changing cultural and social norms

Rise in nuclear families creating new roles for women

High use of self-help groups (SHGs), especially for women

Marketers need to focus on creating


excitement amongst women and youth

Rural Marketing, 2e

awareness

and

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

The Evolving Rural Consumer

164 million households accounting for 56% of Indias total


income, 64% of expenditure and 33% of savings

67%
road
electrification

200 million mobile users

14 million DTH subscribers

87 million Kisan Credit Cards

connectivity,

30%

tele-density,

60%

Higher growth in durables as well as FMCGs as compared to


Ruralurban
Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Rural India: The Exploding


Middle Class

Rural India: The Exploding Middle


Class
Pyramid transforming into a diamond

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

2020

Rural Marketing, 2e

Rural India: The Exploding


Middle Class
cost of living leads to higher proportion of disposable
income

Government

incomes

rural thrust boosting bottom of pyramid (BoP)

Rural

infrastructure being developed in the areas of roads,


electrification, education and health

Increase

in agricultural productivity and shift to cash crops


increasing agricultural income

Rural Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Lower

Refer to video case and answer the following questions:

Despite the diverse heterogeneous nature of rural


markets, why are marketers focusing on rural
markets?

How should marketers tackle the huge diversity seen


in rural markets?

What steps should a company take to tap the huge


potential in rural markets? Discuss this with regard to
the 4 Ps of marketing.

Rural Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Rural Marketing Case


Rural Markets

Think like a businessman with the


feelings of a social worker

Rural Marketing, 2e

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Successful Mantra for Entering


Rural Markets