Presented by:

Arun Gupta
Rohan Bhardwaj
Urban Market Rural Market

Urban Market Rural Market

Rural agricultural Rural Market

tools, cattle,
Market carts
 Rural marketing involves the
process of developing, pricing,
promoting, distributing rural
specific product and a service
leading to exchange between rural
and urban market which satisfies
consumer demand and also
achieves organizational objectives
 Increase in purchasing power, because of
scientific agriculture
 The changing life style and consumption
pattern of villagers with increase in education
 Social mobility
 Improved means of transportations
 Saturated urban markets
 More and more new products demanding urban
customers
 Penetrations of mass media such as television
and its various satellite channels
 DEMOGRAPHIC CHARACTERISTICS
 72 percent of population is spread across large
number of villages where many are sparsely
populated. – IRREGULARITY IN POPULATION
DISTRIBUTION
 62 percent of villages have population below
1000 and most villages with population below
500 DO NOT HAVE SHOPS!
 These characteristics point toward complexities
of distribution and logistics management
 RURAL ECONOMY
 Income level in rural areas have increased
over the years.
 Households belonging to middle-class and
above constitute the bulk of ‘Consuming’
class.
 Consumption pattern in rural economy is
also undergoing a shift. Eg: In 1983 , 66
percent of capita income was spent on
food. In 2001, it declined to 59 percent.
 Increase in demand for other products*
can be held accountable for this shift.
 Social and Cultural factors
 Social hierarchy, customs, traditions and social
norms pay a significant role in determining
individual and collective behavior in rural India.
 Caste system – Defines social status of an
individual.
 Geographic demarcation of household – Harijan
Basti and Thakur-Gaon.
 Aspects like these must be taken into
consideration by an intelligent marketer while
introducing / promoting / selling any product in
rural markets.
 I am ATTRACTIVE
 This is Because….
 Family
 Preference of clothes, food etc still decided by seniors in family.
 Geographic influences
 ACs will be a flop in regions like Shimla, Manali etc
 Economic factors
 Budget Constraints
 Brand preference and loyalty
 People in Rural areas prefer to buy from HAATS instead of any
shop.
 Place of purchase
 60% prefer HAATS due to better quality, variety & price
 Environment
 The Mukhiya’s opinion, in most cases, is shared with the
rest of the village.
 Availability
 Hindustan Lever - Has built a strong distribution system which helps its brands
reach the interiors of the rural market
 To service remote village, stockiest use auto rickshaws, bullock-carts and even
boats in the backwaters of Kerala.
 Acceptability
 Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola
provides low-cost ice boxes — a tin box for new outlets and thermocol box for
seasonal outlets.
 Awareness
 Coca-Cola uses a combination of TV, cinema and radio. It doubled it’s spend on
advertising on Doordarshan, which alone reached 41 percent of rural
households. It has also used banners, posters and tapped all the local forms of
entertainment. Coca-Cola advertising stressed its `magical' price point of Rs 5
per bottle in all media.
 LG Electronics uses vans and road shows to reach rural customers. The
company uses local language advertising.
 Affordability
 Coca Cola introduced Returnable 200-ml glass bottle priced at Rs 5. Now Eighty
per cent of new drinkers now come from the rural markets.
 Product
 Price
 Promotion
 Place
 Small unit packing: Used by brands like Lifeboy, Kurkure, Tiger Biscuits,
Velvet Shampoo
 Sturdy products: Sturdiness of a product either or appearance is an
important for the rural consumers. Eg: Villagers don’t prefer slim mobiles or
mobile with touch screens. For them, they are not durable.
 Simple and easy to use: Philips free power radio which needs one
minute winding of string to provide 30 minutes of radio listening.
 New product designs: Eg: Nokia Introduced 1100 model. Its design was
modified to protect it against rough usage in rural environment; it is dust
resistant & has a small torch light in view of the frequent power cuts in rural
India
 Utility oriented products: Products like mixi, grinder can find good no of
sales in rural India as women of rural India is accustomed to make Masalas etc.
 Brand Identity systems: Colors used, brand name, brand symbol and
even language used to promote brand plays a vital role. Eg: “Peeli Tikki”
 Low cost/ cheap products: The price can be
kept low by low unit packaging’s like paisa pack of tea,
shampoo sachets, vicks 5 grams tin, etc.
 Ensuring price compliance: Rural retailers,
most of the times, charges more than the MRP. The
manufacture has to ensure price compliance either through
promotional campaigns, as was done by Coca Cola, or by
ensuring the availability of products at the retail outlets
directly.
 Low volume-low price strategy: This
strategy of reducing prices by reducing the package size in
order to make it appear more affordable, is delivering very
good results for a large number of FMCG product categories,
in the rural markets of India
 Preference of consumers for low unit price points should not
be interpreted as their preference for cheap products.
Instead they prefer affordable products that gives value for
money.
 Simplicity : All promotional messages targeted
at rural audience need to be simple & clear,
which can be easily understood, & they should
not include any confusing elements.
 The promotional message can be delivered in
the form of an entertaining story with a message
depicting how the brand delivers “larger good”
to the family & society.
 Choice of Brand Ambassador Amitabh
:

bacchan in the chayavanprash advertisement,

boosted the sales in the rural markets.
 Over 5,000 fairs are held in the
country. Estimated attendance is about
100 million rural consumers.
 Biggest fair ‘Pushkar Mela’ is estimated
to attract over 10 million people.
 Beneficial for companies to organize
sales of their product at such places.
 Promotion can be taken, as there will
be ready captive audience
 Low literacy levels
 Ineffective distribution channels:
Large number of intermediaries, which increases the
cost and creates administrative problems.
 Many languages and diversity in
culture: Factors like cultural congruence, different
behaviour and language of the respective areas make it
difficult to handle the customers.
 Spurious brands: A lot of spurious brands or
look-alikes are available, providing a low cost option to
the rural customer.
 Seasonal demand: Demand may be seasonal
due to dependency on agricultural income.