Rural Marketing

By :

Rural Market Environment

The Rural Consumer

The Rural Demand

Other Aspests

The Rural Consumer A Detailed Profile

Size of Rural Consumer Group
* Rural population is about 73% of the total population of India * According to 2001 census the total rural population amounts to 74 Crore * 12 Crore households 70% of the total Location Pattern

A Scattered market the comparison below shows the same * Urban Population is spread over 3,200 cities * Rural population is spread across 5,70,000 villages

Socio-Economic Position
Low purchasing power & Per Capita Income Bounded by tradition, culture, religion & community 60% of rural income is from Agriculture More than 50% rural households have monthly income < Rs 25,000 About 14% have income > Rs. 50,000 In recent years, 70% rural households have started saving/investing their income

Socio-Economic Position

Culturally a Diverse & Heterogeneous Market in terms of Religious, linguistic, social & cultural factors State to State variation in extent of development
From a study conducted by IMRB (Indian Market Research Bureau) provides development index points for each state on
Health & Education

Transportation Electricity TV Transmission Banks Post Offices Water Supply

Average villages have 33 index points

Socio-Economic Position
Literacy Level
Rural India has a literacy rate of 28% compared to 55% of the whole country

Lifestyle
Conservative & tradition bound There has been a change in the same over the years though with
Increase in Income Growth in Education Greater Media Penetration Marketers efforts to reach and capture the rural markets

Socio-Economic Position
Buying Behavior
Factors that Influence Literacy level Occupation Social & Cultural Factors Exposure to Media Marketers Efforts

The buying behavior has undergone a major change. A huge population in rural areas has seen an increase in their income as a result of which they have the potential to buy expensive/luxury products

The Rural Demand

Some well established products
Pressure Cooker Cooking Utensils Batteries Scooters, Motorcycles Bicycles Radio Pesticides, Fertilizers Tea Sewing Machines Artificial Jewellery Medicines Tobacco Products Soaps,Detergents Electrical Goods (fan,light) T.V Wrist Watches Mobile Phones

Recent Trends
Steady Growth from the past 2 decades Welcome change in the composition of Rural Demand
Several products already well established in the rural market In many products the rural market share is greater than the urban market In many products rural market has overtaken the urban in growth rate

Rural Market becomes attractive to Corporates

The Rural Market is being seen as a Growing Oppurtunity mainly because of the following
Rural Demand is growing rapidly Purchasing power has increased Cut Throat competition in the Urban Markets Rural market is largely unexplored and untapped There would be opportunities for new entrants as compared to urban population being loyal to specific brands The volume and the strength of the rural population

Companies already into Rural Market

Company
HUL Colgate Godrej Cavinkare Marico Cadbury Cipla

Rural Sales (% of total) 50 50 30 33 25 25 18

Tapping the Rural Market

Segmentation & Targeting Product Management Physical Distribution Channel Management Sales Force Management Marketing Communications

Segmentation & Targeting

Geographic Climate & Level of Irrigation Nearness to a feeder town/ industrial project Demographic Segmentation Population Concentration Age Literacy Level Income Regular & Seasonal Buying Behavior Sources of data on rural consumers
CMIE Center for Monitoring Indian Economy Thompson Rural Index

Product Strategy
Whether the product from Urban Market can be bought as it is in the rural market or it needs changes/customizations Economic Income realities should be considered Lower priced versions do succeed in most cases but not always

Product Strategy
Specifically designed products
Tractor Everydays Jeevan Sathi torch Model Variants Bikes Beverages Chota Coke Color Variants Asian Paints

Different products/models,brands,packing, pricing and positioning Package Design and pack size Logos, symbols and mnemonics Brand Decisions Sell value brands, not cheap products Preconceived notions have no place

Physical Distribution
Problems
Transportation and warehousing Cost Service dilemma becomes more acute, transportation & warehousing costs are high The delivery van ITC and HUL have their own delivery vans High cost can be taken care of, if the sales volumes are high which is most likely if the porduct is marketed properly

Questions ????

Channel management
Problems
Multiple tiers add to the cost Non Availability of dealers Poor viability of outlets Inadequate banking and credit facilities

The village shop is the key to rural distribution Improving the viability of the outlets, deal in number of product lines.

Thanks !!!