Rural Marketing, 2e

The Call of Rural India

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

 Learning Objectives

Define rural India and rural markets

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

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
 Definition of Rural
Organization Definition of Rural Limitation
Several hamlets demarcated by
physical boundaries

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

The term rural
Towns are urban areas that satisfy:
is not defined,
Minimum population 5,000
nor is the upper
Census Population density > 400 per sq.
limit of
Km.
population for
75% of the male population
villages
engaged in non-agricultural
activities
Widening of
Similar to Census except that the definition allows
IRDA percentage for male population in a larger market
(Integrated Rural
Development Agency) towns is 25% and not 75% to be considered
as rural
Rural: All locations with a population
of up to 10,000 Distinction
RBI Semi-urban: All locations with a defined only by
population between 10,000 and population
100,000
Rural Marketing, 2e
 Definition of Rural

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Organization Definition of Rural Limitation

Town
Planning Towns with population up to
characteristics
Commission 15,000 are considered rural
not defined

Locations with shops/commercial Town or village

Sahara establishments up to 10,000 characteristics
population. not defined

All population centres other than Population

LG Electronics the 7 metros are considered rural criteria is not
or semi-urban considered

Rural Marketing, 2e
 Rural Myths

Rapid urbanization

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

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
 Rural Marketing Mix
The 4 Ps of marketing price, product, place and promotion
replaced by 4 As in rural markets

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Affordabilit
y Availability

Acceptabilit
Awareness y

Rural Marketing, 2e
 Rural Marketing Mix

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Affordability
Rural consumers are driven by value proposition and not
by cost

Availability
Single largest challenge for marketers in rural markets
Paucity of data for villages and small towns is a hindrance

Media reach is increasing

Awareness

Need for specific messages aimed at the rural psyche
Use of alternative rural means of communication

Rural consumers look for productive assets

Acceptability Specific needs should be looked into while designing
products for rural consumers

Rural Marketing, 2e
 The Evolving Rural Consumer
Value driven and looks for products that add to earning

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

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
 The Evolving Rural Consumer
Changing cultural and social norms

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

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 awareness and

excitement amongst women and youth

Rural Marketing, 2e
 Rural India: The Exploding
Middle Class
164 million households accounting for 56% of Indias total
income, 64% of expenditure and 33% of savings

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

67% road connectivity, 30% tele-density, 60%
electrification

200 million mobile users

14 million DTH subscribers

87 million Kisan Credit Cards

Higher growth in durables as well as FMCGs as compared to

Ruralurban
Marketing, 2e
 Rural India: The Exploding Middle
Class
2020
Pyramid transforming into a diamond

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Rural Marketing, 2e
 Rural India: The Exploding
Middle Class
Lower cost of living leads to higher proportion of disposable
income

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Government rural thrust boosting bottom of pyramid (BoP)
incomes

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
 Rural Marketing Case
Rural Markets
Refer to video case and answer the following questions:

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

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
 Successful Mantra for Entering
Rural Markets

Copyright 2012 Dorling Kindersley (India) Pvt. Ltd.

Think like a businessman with the
feelings of a social worker

Rural Marketing, 2e