Unit-5

Rural Marketing

Rural Marketing Strategies: A rural marketing strategy refers to the

planning of adequate supply of consumer goods and agricultural input to
the villages at an affordable price to fulfil the needs of the rural consumers.
The market structure of rural marketing can be classified into two types - primary
and secondary markets. The primary market is where the goods are first sold or
exchanged. At the same time, the secondary market is the place where the
product is resold or redistributed to the final consumer.

Rural marketing is a process of pricing, developing, promoting and distributing

rural specific goods and services, leading to desired exchanges with rural
customers to meet their needs and wants and achieve organizational
objectives.

Marketing Strategies In Rural Areas

In this modern age, many rural marketing strategies in India are available that
help marketers reach rural consumers. Complex planning and effective rural
marketing strategies will help your brand to flourish in rural areas. From
hoarding to mobile, many methods are available in the rural market. With time,
rural marketing India is getting updated, and now reaching rural markets has
become easy. In the below section, we mentioned top rural marketing
strategies that help marketers reach rural market in India. Rural marketing is
now quite an easy process with these ways.

Rural Market Segmentation: Rural Market Segmentation

 The first and most important strategy of rural marketing is the proper
segmentation of the rural market.
 In this process, a potential rural market is segmented into distinct sub-markets
of consumers with common needs and characteristics.
 Rural market segmentation is the initial stage of implementing a rural marketing
strategy.
 Once the segmentation is done, the marketer targets the identified customer
groups with the appropriate marketing mix so that the target segments can
perceive the company’s product/brand.
 Market segmentation is a method of obtaining a maximum market response
from limited marketing resources by recognizing differences in the response
characteristics of different market segments.

To get started, the organization can do the following:

 Focus on selected markets
 Concentrate on selected makes
 Focus on selected villages

Rural market segmentation is the process of dividing a potential rural market into distinct
sub markets of consumers with common needs and characteristics. Rural market
segmentation is the starting step in applying the rural marketing strategy.

The three main types of market segmentation are demographic, psychographic, and
behavioral. Demographic segmentation divides people based on their age, income,
education level, and occupation. Some examples of companies that use demographic
segmentation include insurance providers, healthcare companies, and banks.

Some common approaches for segmenting the rural market include: 1. Geographic
Segmentation: Dividing the market based on geographic factors such as rural regions,
states, or villages. 2. Demographic Segmentation: Considering demographic variables like
age, gender, income, occupation, and education levels.

Segmentation on the basis of: size of landholding, area of land under cultivation, irrigation
method, crop mix and rate of money realization. Education & House type: Qualification &
house types Occupation: Cultivators, shopkeepers, artisans.
Rural market segmentation involves dividing a rural market into distinct groups
based on various criteria to tailor marketing strategies...

Strategies on Product: Small unit and Low price packing: By making the product available
in small and low price packing, a company can attract villagers to at least try its product
because larger pack sizes may be out of reach for rural consumers because of their price
and usage habits. For example: Shampoos, Biscuits.

A rural marketing strategy refers to the planning of adequate supply of consumer goods and
agricultural input to the villages at an affordable price to fulfil the needs of the rural
consumers.

A careful analysis of these four factors—product, price, place, and promotion—

helps a marketing professional devise a strategy that successfully introduces or
reintroduces a product to the public.

Price, Promotion and Distribution: Price: The amount of

money paid by customers to purchase the product. Place (or distribution): The
activities that make the product available to consumers. Promotion: The activities
that communicate the product's features and benefits and persuade customers to
purchase the product.

Distributing free samples among rural people not only popularize the product but
also gain huge acceptance among them. When the company decides to enter
into new market and launch the new product, in such cases free distribution of
samples is an effective pull-up sales promotional activity.

1.Distribution Strategy

Ensuring Reach & Visibility –The thing which is critical, is to get the Stock
Keeping
Unit right, as rural retailer can‘t affo environment, being first on the shelf in
the product category and developed a privileged relationship with the
retailer is a source of competitive advantage to consumer good companies.

Reaching upto Mandis, Towns, Semiurban centres –Organizations can

cater to rural needs for consumer durables, clothes, kitchen equipment and
agri-input by making their products available upto feeder towns, semi-urban
centers or mandis.

Targetting larger villages –There are only 85000 large villages out of more
than 6,38,000 villages. But they have 40% of the rural population and 60%
of total consumption.

Understanding of Peak seasons –Peak season times in rural parts are

Festivals, harvest and marriage seasons. Bulk of the demand for the
consumer durables concentrated during these times. The rural consumers are
in shopping mood and have the cash for the same at this time. Organizations
have to ensure that their products are available at these times.

Delivery vans –Company delivery vans which can serve two purposes; they
can take the products to the customers in select rural areas and also enable
the firm to establish direct contact with them and thereby provide an
opportunity for promotion.

Collaboration for Distribution – Various organizations with comparatively

lesser distribution reach can collaborate with organizations that already have
achieved high penetration levels in rural areas. For eg. P&G had tie-ups with
Godrej, Marico Industries and now its planning one with Nirma for
distribution of Camay soaps.

Converting unorganised sector manufacturers into distributors – Small

scale manufacturers have good knowledge of the territory and have good
sales network. Organizations like Exide are attempting to convert these
small scale manufacturers to
 become their dealers.
Company’s own Distribution–ProjectShaktiofHUL
isNetworkonsuchexample

2.Distribution Channels in Rural India

Use of cooperative societies–There are over 4 lakh co-operatives operating
for different purposes like marketing, credit and dairy cooperative in rural
areas. For eg. Farmers

Service Co-operative Societies function like a mini super market for rural
consumers where they sell soaps, detergents, cloth, seeds, fertilizers,
pesticides etc. at economical and reasonable prices. Since these societies
have necessary infrastructure for storage and distribution, companies may
contact these societies to sell their products.

Use of Public Distribution System –In India, the Public Distribution

System is well organized. There are about 4.37 lakh fair price shops
operating in the country. Since the PDS outlets cover the entire country they
can be utilized for marketing consumable items and low value durables in
rural areas.

Utilization of Petrol Pumps –These petrol pumps, in addition to

petrol/diesel, oil and lubricants are also selling consumables such as soaps,
detergents, biscuits etc, particularly on the highways. These bunks may also
think of stocking certain consumable agricultural inputs like fertilizers, seeds
and pesticides.

Agricultural input dealers –There are about 2,62,000 fertilizer dealers in the
country.

During off season most of the dealers don‘ to motivate them so that they can
sell other products also during their free time.
 Shandies/ Haats/ Jathras/ Melas –Shandies are periodic markets which
operate in a weekly cycle. They offer a ready distribution network and are
steady, cheap and appropriate. Haats can be used effectively for distribution,
demonstration and sampling of daily need products. Melas work best for
introducing new brands and building brands through the organization of
events at the venue.

3.Accessing Rural markets: Coverage Status in Rural

Markets
Marketers have to ensure the reach of their product to retail outlets, and they
also need to motivate retailers to stock their product or brand.

50% of the rural population resides in the 1 lakh odd large villages. These
villages are connected by all-weather roads and they account for 60% of
rural wealth.

HUL, Eveready, ITC etc are the companies that have the most deeply
penetrated rural distribution system just about cover the retail network up to
the 2000+ population villages.

4.Rural distribution Channels

Five layers of distribution channels for the movement of products from the
company depot to the interior village markets.