Rural Marketing 2025 by DR SANJEEV MALVIYA 2023-2025
- 2. Defining Rural India Organisation Definition Limitations NSSO (Census) Population density < 400 / Sq Km 75 percent of the male working population is engaged in agriculture No Municipal corporation / board rural not defined Planning Commission Towns upto 15,000 population are considered rural Town characteristics not defined
- 3. Cont’d LG Electronics All places other than the 7 metros Only clarifies what are the cities NABARD All locations with a population upto 10, 000 considered “ rural” Village & town characteristics not defined Sahara Commercial establishments located in areas servicing less than 1000 population Population characteristics unknown Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S ( 2007)
- 4. Rural Marketing On account of green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. Thus a special marketing strategy emerged known as Rural Marketing. Rural Marketing involves delivering manufactured or processed inputs or services to rural producers or consumers.
- 5. What makes Rural marketing attractive ?
- 6. Untapped rural potential - 6,27,000 villages across the country - account for 70% of population - 60% of National demand for various product categories
- 7. Expansion of middle income household -According to NCAER study, there are as many 'middle income and above' households in the rural areas as there are in the urban areas. -There are almost twice as many 'lower middle income' households in rural areas as in the urban areas.
- 8. Improvement in Social Indicators -No. of “pucca” houses doubled from 22% to 41% -No. of “Kuccha” houses halved from 41% to 23% -Percentage of BPL families declined from 46% to 27% -Rural literacy level improved from 36% to 59% in past two decades
- 9. Improvement in Infrastructure - In 50 years,40% villages have been connected by road, in next 10 years another 30% would be connected -More than 90% villages are electrified, though only 44% rural homes have electric connections -Rural telephone density has gone up by 300% in the last 10 years
- 10. Low penetration rate -Low penetration rates in rural areas, so there are many marketing opportunities – Durables Urban Rural CTV 30.4 4.8 Refrigerator 33.5 3.5 FMCGs Urban Rural Shampoo 66.3 35.4 Toothpaste 82.2 55.6
- 11. Myths About Rural Market Rural Market Is a Homogeneous Mass Disposable Income Is Low Individuals Decide About Purchases
- 12. Myth 1: Rural Market Is a Homogeneous Mass REALITY Heterogeneous population 16 languages State wise variations in rural demographics Literacy (Kerala 90%, Bihar 44%) Population below poverty line (Orissa 48%, Punjab 6%)
- 13. Myth 2: Disposable Income Is Low REALITY Number of middle class HHs (annual income Rs 45,000- 2,15,000) Rural 27.4 million Urban 29.5 million Per Capita Annual Income Rural Rs 9,481 Urban Rs 19,407 TotalRs 12,128 Source: NCAER,2002
- 14. Myth 3: Individuals Decide About Purchases REALITY Decision making process is collective Purchase process-influencer, decider, buyer, pays can all be different. So marketers must brand message at several levels Rural youth brings brand knowledge to HH
- 15. Challenges and Strategies Availability Affordability Acceptability Awareness
- 16. Availability Challenge: Regularly reach products to the far-flung villages. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas
- 17. Strategies Strive to reach at least 13,113 villages with a population of more than 5,000 Trade off the distribution cost with incremental market penetration. Can reach the rural market by the following ways:
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- 21. Contd…. Hindustan Unilever, to serve remote village,use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas.
- 22. Affordability Challenge: to provide at cheaper price Strategies: Introduce small unit packs. Godrej introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh — the so- called `Bimaru' States.
- 23. Contd…. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. Hindustan Lever, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm.
- 24. Acceptability Challenge: to gain acceptability for the product or service Strategies: Offer products or services that suit the rural market Easy to understand
- 25. Contd.. 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. HDFC tied up with non-governmental organisations and offered reasonably-priced policies in the nature of group insurance covers.
- 26. Awareness Challenge: less exposure to the world, low literacy rate Strategies: Opinion leaders play a key role in popularizing products and influence in rural market so choose the appropriate opinion leader Can use the following promotional methods:
- 27. Personal Interface One on One contact programs are extremely efficient manner to reach the Rural Consumer Provides an opportunity to Demonstrate Induce Trial Educate
- 28. Events -Using Culture to touch a chord
- 30. Events : Melas An opportunity to present Brand Stories using better Display tools Large Screens Animations Melas can be used for Retail Sales Points Sampling Exercise Demonstration
- 31. Haats -Presence in the Market 42000 rural haats (supermarkets) 4500+ Visitors per haat. Average Sales per day US$ 5000 300+ Sales outlets/haat.
- 32. Conclusion “Rural market has an untapped potential - but it is different from the urban market, so it requires the different marketing strategies and marketer has to meet the challenges to be successful in rural market.”