Rural Marketing

Rural Marketing
Presented by:-
Prajakta Chitalkar
Ajay Devgire
Supriya Dhamne
Sachita Gadekar
Nakul Gavhane

Content
1. Introduction
2. Evolution
3. Characteristics
4. Scope
5. Importance
6. Rural vs urban
7. Rural products
8. Attractiveness of rural market
9. Factors contributing to the rural market
10. Problems in rural marketing
11. Strategy for rural marketing

Rural Marketing can be defined as the process of developing, pricing,
promoting, distributing rural-specific goods and services leading to exchange
between urban and rural markets, which satisfies consumer demand and also
achieves organisational objectives.
(Rural: “places far away from towns or cities”
-Collins’s Cobuilds Dictionary(2001))

Rural India
• According to 2012 census, rural population is 75% of total
population and it is scattered over a wide range of geographic
area.
• Approximately 75% of India’s population lives in 6,38,365 villages
spread over 32 lakh sq.km.
Income Level of Households % share of population
Less than 90,000 65
90,000 to 2 lakhs 32
2 to 5 lakhs & above 03

• Phase I
• Prior to the 1960s
• Agriculture products such as food
grains.
• Industrial inputs like cotton,
oilseeds, sugarcane.
• Not giving importance to metallic
utensils, agricultural tools made by
skilled workers like Carpenters,
potters, blacksmiths
• Phase II
• 1960s-1980s
• Green Revolution
• White Revolution
• FMCG companies began
establishing a distribution network
in rural segment.
Evolution of Rural Marketing

Phase III (1990s-2000)
• During first two phases, marketing of consumables and durables to
rural markets was not considered seriously. Because-
- Growth of urban markets in this period
- Potential of rural markets was not visible.
- Rural markets were not very accessible.
- Poor infrastructure of village.
• In 1990s, India’s industrial sector gained in strength and maturity.
• Increase plan outlay of central and state government for Rural
Development.
• Realizing potential of rural markets.

Phase IV (After 2000)
•Rural marketing has taken centre-stage.
•FMCG have planned for increased visibility, hired people to
establish local connections. Ex. Hindustan Unilever, Godrej
consumer products, Dabur, ITC.
•Automobiles companies launching more models in the affordable
price range.
•Reliance has entered with mobile connections.
•After 2000, Govt. initiatives like farm loans, employment, rural
infrastructure development programmes.

Characteristics of the rural market
• Large and scattered Market
• Heterogeneous Market
• Income from Agriculture
• Standard of Living
• Infrastructural Facilities

1. Rising rural prosperity:-
Average income level has unproved due to modern farming practices, contract
farming industrialization, migration to urban areas etc.
2. Growth in consumption:-
There is a growth in purchasing power of rural consumers.
3. Change in life style:-
Life style of rural consumer changed considerably
4. Market growth rate higher than urban:-
The growth rate of fast moving consumer goods [FMCG] market and durable
market is high in rural areas. The rural market share is more than 50% for products
like cooking oil, hair oil etc.
SCOPE OF MARKETING:

Rural Marketing is a two-way marketing process wherein:
• Urban to rural : Major part of rural marketing. Includes transactions of urban marketers
who sell their goods and services in rural areas pesticides, fertilizers, FMCG products,
tractors, bicycles, consumer durables, etc.
• Rural to urban: Basically falls under agricultural marketing. A rural producer seeks to sell
his produce in urban market like seeds, fruits and vegetables, forest produce, spices, milk
and related products, etc.
• Rural to rural : Includes the activities that take place between two villages in close
proximity to each other like agricultural tools, handicrafts, dress materials, bullock carts,
etc.

IMPORTANCE OF RURAL MARKETING
• Size of rural market
• Rural target population
• Employment
• Better living
• Contribution to national income
• Increase in farm income

Urban Vs Rural Marketing
No. Aspects Urban Rural
1.
Philosophy Marketing & Social
concept
Development & Relationship
marketing
2. Market Demand High Low
3. Competition organized sector Unorganized sector
4. Literacy High Low
5. Income High Low
6. Needs High level Low Level

NO. Aspects Urban Rural
7. Adoption Faster Slow
8. Product :
- Awareness
High Low
- Concept Known Unknown
- Quality Good Moderate
9. Price :
- Sensitive
Yes Very much
- Level desired Medium-high Medium-low
10. Transportation Good Average
11. Advertising Print, audio visual,
outdoors.etc
TV, Radio, print media
in many languages
12. Personal selling Door-to door, frequently Occasionally

RURAL CONSUMER
 Classification
The rural consumers are classified into the following groups based on their economic
status:
The Affluent Group
• They are cash rich farmers.
• Very few in number.
• They have affordability but do not form a demand base large enough for marketing firms
to depend on.
• Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this category.

The Middle Class
• One of the largest segments for manufactured goods.
• It is fast expanding.
• Farmers cultivating sugar cane in UP and Karnataka fall in this category.
The Poor
• This constitutes a huge segment.
• Purchasing power is less, but strength is more.
• They receive grants from the government and reap
the benefits of many such schemes and may move
towards the middle class.
• The farmers of Bihar and Orissa fall under this category.

 Characteristics
• The rural consumer has a very high involvement in any product purchased.
• He purchases products more often (mostly weekly), usually in small quantities.
• He is very quality conscious but value for money is of
prime importance.
• He looks more for functionality of the product rather
than frills associated which he cannot use but for
which he will have to pay extra.
• He is brand loyal. Once loyalty formed is difficult to
dislodge.

• He understands symbols and colors better, and looks for endorsement by leaders or
icons.
• The source of information is critical for him, as he is influenced by information received
and opinion formed through various resources in his purchasing decisions.
• Purchasing decisions are usually taken by the
eldest member of the family.
• Major purchasing is done during
the festivals.
• In many cases, the buyer is different
from the user.

CONSUMER BEHAVIOUR
• Consumer buyer behaviour refers to the buying behaviour of final Consumer –
individuals and households who buy goods and services for personal consumption.
• About 70% of Indian population lives in rural areas. About 80 crore people lives in
6,00,000 villages.
• Consumers in this huge segment have displayed vast differences in their purchase
decisions and the product use.
• Villagers react differently to different product, colour, sizes etc. in different parts of
India.

Complex
Buying
Behaviour
Variety
Seeking
Buying
Behaviour
Dissonance
reducing
Buying
Behaviour
Habitual
buying
behaviour
DifferencesbetweenBrands
High
Low
Involvement
High Low
CONSUMER BUYING BEHAVIOUR MODEL

Complex Buying Behaviour:
Buying behaviour is complex when products to be bought are expensive and many
different brands exist. Consumer highly involved in purchase and aware of significant
differences in brands
Eg. Automobiles, computers
Dissonance reducing Buying Behaviour:
In case of products which are expensive but have few differences. Consumer is highly
involved in purchase but sees little differences in the brands.
Eg. Furniture

Habitual buying Behaviour:
Products which are frequently purchased. Low consumer involvement and absence of
significant brand differentiation.
Eg. Salt ,soap
Variety seeking buying Behaviour:
These are products that are less expensive and frequently purchased but have significant
differences. Low consumer involvement but significant brand knowledge.
Eg. Confectionery items

Rural Taste Subject Urban Taste
Bold and Primary Colors Colors Liked Shades of Colors, Light
Hues
Cinema, Nautanki,
Dangals, Melas
Entertainment Theme Parks, Internet,
Travel
Synthetics, Colorful Clothes Denim, Cottons, Designer
Red – Happiness,
Auspicious. Green -
Prosperity
Color Relevance Red – Danger
Green - Safety
RURAL TASTE VS URBAN TASTE

FACTORS INFLUENCING RURAL CONSUMER BEHAVIOUR
• Environmental factors
• Personal factors
• Psychological factors
• Cultural factors
• Social factors

ENVIRONMENTAL FACTORS:
Economic Factors: The quantum of income and the earning stream determines what a
consumer will be able to buy.
Political factors: The philosophy and decisions of ruling party and thinking of rival
parties greatly influence the fortune of rural people.
Eg. four fold increase in outlay for rural development from seventh to nine five year
plan, Programmes like Prime minister’s Rojgar Yojana
Technological development: Technology has an impact on the occupations and life styles
of rural people.
Legal:
Eg. Consumer protection act
Cultural factors: Buying decisions are highly influenced by social customers, traditions
and beliefs.
Social class:
Aspect Traditional Modern
Agriculture Bullock cart Tractors
Life style Neem stick Toothpaste

PERSONAL FACTORS
Age and life cycle stages:
A person began with child birth, move to infancy ,teenage, adult, middle age, old, and
then ends with death. Under each stage buying behavior is different.
Eg. Child stage –Toys, daliya ,teeen age –Bicycle ,Young- motorcycle, Middle age-
Tractor, Old-chaupal
Occupation :
This leads to increase the demand for consumer durables.
Economic circumstance :
At same income level, a rural consumer has relatively high disposable income

Life style:
How people spend their money and time in day to day activities.
Personality and self concept:
Personality is a combination of factors such associability,
self confidence and dominance.

PSYCHOLOGICAL FACTORS
Motivation :
Rural consumers are satisfied by meeting the 2 needs i.e. physical and security need
Perception :
Needs, wants, values attitudes and personal experience vary from person to person.
consumer’s perception means what he thinks about the product, producer or the brand.
Learning:
It is a process of acquiring knowledge about products, product benefits, method of usage
and maintenance
Beliefs and attitudes :
Attitude indicates our feeling about a product, service, brand and shop.
Belief may be positive, negative or neutral

CULTURAL FACTORS
Culture and sub culture :
Culture represents an overall heritage a distinctive form of environmental adaption.
Eg. Traditional life, traditional occupation, traditional beliefs
Sub culture :
It exists within the dominant culture, with its own set of values, beliefs and attitudes and
behaviour pattern. The pattern of behaviour would vary between north and south even
in rural areas.
Social class:
Consumer behaviour is determine by social class to which they belong and is determine
by a combination of factors like education, occupation, income and assets.

SOCIAL FACTORS
Family:
• The members of family play different roles such as influencer decider and purchaser in
buying process.
• Buying habits have been shaped by family influences.
Reference group:
• It includes family and friends with whom an individual interacts on a face to face basis.
• Word of mouth communication
• positive opinion towards a product or service based on admiration

Urban Buying Process Rural
High-involvement product,
comfort, status, drive, consumer’s
recognition for need
Need Recognition High involvement product -
productivity drives consumer’s
recognition for need.
First hand information from TV,
Internet, Newspaper Ads/
Consults a fellow owner before
dealer visit
Information search First hand information from a fellow
owner and nearby dealer at district
town.
Educated/aware understands,
analyses technical specifications.
At most looks for test drive
Evaluation of
alternatives
Lower education and awareness.
More importance to fellow owner
and illustration of dealer. Consults
opinion leader like progressive
farmers. Live field demonstration.
Normally buyer makes final
decision. Family influences color
and looks,. Drives new car home
with family.
Purchase decision Collective decision by buyer, adult
son, mechanic and progressive
village farmer.

Urban Buying Process Rural
Higher satisfaction or
dissonance because of
greater risk factor.
Higher risk taking ability,
because of wanting
experimentation. After sales
service no issue
Post-purchase behavior
Higher satisfaction, lower
dissonance. Because risk-
taking is lower and
expectation level is low.
Low risk-taking ability
because life-attached
product, lack of technical
know how, low confidence
on after sales service.

Recently have graduated from Unbranded to Branded.
Brand association mainly with colours, visuals and numbers and do not with name of brand.
Colours – Lal dant manjan, Lal sabun (Lifeboy), Red Battery(Eveready)
Numbers - Godrej No.1 soap, Broke Bond A1 karak chai
Visuals – Ghari detergent, Katchua Chaap mosquito coil
Retailers plays a significant role in Brand promotion.
Have strong bond with consumers.
Low brand awareness ,enables retailers to push any brand of their choice.
PRODUCT BRANDING IN RURAL MARKETING

Major brands and products are facing huge problems with fake products
Fakes Markets Categories :
• Look-alikes : Color scheme on the packaging material closely resembles to popular
brand.
Ex. Lalita Amla for Dabur Amla
• Spell-alikes : Packaging is similar but names with subtly or cleverly misspelt.
Ex. Paracute for parachute, Fair & Lonely for Fair & Lovely
• Duplicates : Exact replicas of original brands. Colour, design, name and packaging are
same. Differs in quality of product.
FAKE BRANDS

GOVERNMENT INITIATIVES
Credit cards (Kisan credit card) to farmers from the public sector banks which helped
them to take short and medium term loans to buy seeds, fertilizers, etc. This enabled
them to produce more thus increasing their income.
Large inflow of investment for rural development programmes from the government.
Schemes like IRDP (Integrated Rural Development Programme) and REP (Rural
Electrification Program me) in the 1970’s gave a boost to the agrarian economy. This
resulted in changes in people’s habits and social life. REP gave impetus to the
development of consumer durable industry.

ATTRACTIVENESS OF RURAL MARKET
1. Large population
• 83.3cr Indians consisting of 16.78 cr households reside in 6,40,867 villages (Census, 2011).
• It constitutes about 68.84% of the Indian population.
2. Growth of market
• The market has been growing at a rate of 3-4% annually adding more than one million new
consumers every year.
3. Increasing Income And Purchasing Power
The agricultural development programs of the government have helped to increase income in the
agricultural sector
4. Accessibility Of Markets
The attraction of a market depends not only on its potential but also on its accessibility. The road
network has facilitated a systemized product distribution system to villages.

5. Consumer Behaviour Changes:
Increased literacy and greater awareness in rural markets create new demands and discriminating
buyers.
6.. Competition In Urban Markets
Intensified competition in urban markets increases costs and reduces market share. The rural
markets are therefore becoming increasingly attractive in relation to urban markets.
7. Various Government Policies
The governments stress on self-sufficiency resulted in various schemes like Operation Flood
(White Revolution), Blue Revolution, Yellow Revolution, etc. resulted in the production of 15
million tons of milk per annum
8. Green Card / Credit Card For Farmers
The government initiated credit cards for farmers through public sector banks.

9. Improved Exports Due To Export Policy
The new Export Policy 2000 paves the way for open market (OGL- Open General License System)
status for agriculture. The World Trade Organizations (WTO) Policy for agro-exports has increased
exports of Indian agricultural produce thereby increasing incomes of the rural population.
10. Better Credit Facilities Through Banks
With co-operative banks taking the lead in the rural areas, every village has access to short,
medium, long-term loans from these banks.

FACTORS CONTRIBUTING TO THE GROWTH OF RURAL MARKET
1. New Employment Opportunities
Government schemes like IRDP (Integrated Rural Development Programme), JRY (Jawahar
Rozgar Yojana) and TRYSEM (Training Rural Youth for Self Employment) have created new
employment opportunities in rural India.
2. Green Revolution
The vision of Dr. Swami Nathan, the father of the green revolution to achieve self-sufficiency in
food grain production in 1995, gave a major breakthrough in food grain production by the use
of scientific methods in agriculture. At present, Rural India generates 299 million tons annually.
3. Favourable Government Policies
Tax exemption in backward areas,sussidy,concession,incentives and heavy investment in rural
develpoment programmes in has bought rapid growth of rural markets.

4. Literacy Growth
Literacy rate is increasing in rural areas, nearly 45% of rural Indians are literate.
This being social and social and cultural changes in buying behaviour of the rural customers.
5. Rising Disposable Income
Green revolution and administered Pricing Mechanism have raised disposable income in rural areas.
6. Attraction of higher Standard of living
Rural people have been motivated to change their lifestyles and have higher standard of living.
7. Media
Mass Media has created increased demand for goods and services in rural areas. Smart marketers are
employing the right mix of conventional and non-conventional media to create increased demand for
products.

PROBLEMS IN RURAL MARKETING
1. Deprived people and deprived markets
The number of people below the poverty line has not decreased in any appreciable manner.
A vast majority of rural people is tradition bound, and they also face problems such as inconsistent
electrical power, scarce infrastructure etc.
2. Lack of communication facilities
Even today, most villages in the country are inaccessible during the monsoons.
Communication infrastructure is also highly underdeveloped.
3.Transport
Many rural areas are not connected by rail transport. Many roads have been poorly surfaced and got
severely damaged during monsoons.

4. Many languages and dialects
The languages and dialects vary from state to state, region to region and probably from district to
district. Since messages have to be delivered in the local language, it is difficult for the marketers to
design promotional strategies for each of these areas.
5. Low per capita Income
Demand in rural markets depends on the agricultural situation, which in turn depends on the
monsoons. Therefore, the demand is not stable or regular
6. Low levels of literacy
The level of literacy is lower compared with urban areas. This again leads to a problem of
communication in these rural areas.
7. Prevalence of spurious brands and seasonal demand
Rural consumers are cautious in buying and their decisions are slow, they generally give a product a
trial and only after complete satisfaction they buy it again.

8. Different way of thinking
The rural customer has a fairly simple thinking and their decisions are still governed by customs and
traditions. It is difficult to make them adopt new practices.
9. Warehousing problem
Warehousing facilities in the form of godowns are not available in rural India. The available godowns
are not properly maintained to keep goods in proper conditions.
1o. Problems in sales force management
The languages and dialects vary from state to state, region to region, and probably from district to
district. Since messages have to be delivered in the local language, it is difficult for sales force to
communicate with the rural consumers.
11. Distribution problem.
Rural markets typically signify complex logistical challenges that directly translate into high distribution
costs. Bad roads, inadequate warehousing and lack of good distributors pose as major problems to the
marketers.

STRATEGIES FOR RURUAL MARKETING

SEGMENTATION
Specific
segment for
your campaign
Homogeneous
groups
Overall rural
population
TOTAL POPULATION
SEGMENT
TARGET
Breaking down a diverse market into homogeneous groups

BASIS TO SEGMENTATION OF RURAL MARKET
GEOGRAPHIC
DEMEGRAPHICS
PSYCHOGRAPHICS
• Region
• Village Size and density
• Climate
• Age
• Gender
• Income
• Education
• Lifestyle – Rural, Urban &
“Rurban”
• Personality
BEHAVIORAL
• Occasions
• Loyalty & usage status / rate

TARGETING THE RURAL MARKET SEGMENT
• Targeting involves evaluating each market segment’s attractiveness and selecting
any one or more segments to enter.
– Evaluation of segments
– Selection of segments
– Coverage of segments
• 1.Step-Evaluation of segments
-Profitability of the segment
-Attractiveness of the segment
-Growth rate of the segment
-Company’s objective
-Limitations of the segment

2. Step: selection of the segment
• Selection of segment can be made by rating the alternative segments on a predetermined
scale in respect of 5 aspects given above.
• The segment may be ranked based on the scores obtained and be considered for selection.
• Those with the high scores will be accepted and the others will be kept aside for future
consideration.
3.Step: coverage of the segment
• Organization has 3 alternative coverage strategies to suit their segmentation approaches.
They are:
– Undifferentiated marketing strategy
– Differentiated marketing strategy
– Concentrated marketing strategy

TARGETING OF
Step 1. Evaluation of segments
• Profitability of the segment
– HUL’s Lifebuoy has targeted mainly the major segment of rural area i.e. the working
segment from the age group of 20 – 50.
– Thus this age group comprises majority of the rural population.
– Hence, this segment is 100% profit Promising.
• Attractiveness of the segment:
– In rural India, health is of paramount importance, because indisposition is very directly
related to loss of income.
– People in rural area are mostly into agricultural activities or its allied activities.
– Hence, they have to play with mud on daily basis.
– If the farmer is well protected then the country is well protected.

• Growth:
– Since 70% of India’s population lives in rural area, this sector is definitely gong to grow.
– Also the age group that Lifebuoy had targeted is large enough to capture the entire market.
– Hence, the growth can be seen in the area.
• Company’s objectives:
– Company’s objective is to make Lifebuoy synonymous to soap in the entire country.
– Its objective is to make Lifebuoy the most trusted soap of India.
– Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene,
and personal care with brands that help people feel good, look good and get more out of life.
• Limitations:
– The major limitation of lifebuoy is that, it has targeted only one segment of the rural market.
– The age group of 0-20 and 50-70 remains untapped.
– The opinion leader i.e. the doctor is also not so appealing to the rural people.
– Hence their opinion leader fails to promote the product

TARGETING OF
Step 2: selection of the segment
• HUL for Lifebuoy has targeted only one major segment of the rural market i.e. the working
class.
Step 3: coverage of the segment
• Concentrated marketing strategy is used by Lifebuoy.
• Lifebuoy is targeted only to 1 segment i.e. the working class.
• Their opinion leader targets to the working class of the rural market.
• Therefore this strategy has provided Lifebuoy a kind of brand loyalty form the working class of
the rural market.

POSITIONING
Positioning is the act of finding place in the minds of the
consumers and locating the brand therein.
Competitive brands of
same product type
All the product in the same product
category
The companies have to plan the positions
that give their products the necessary
advantage in the target markets.
•Identifying the differences of the offer with
the competitors offer
•Selecting the differences that have greater
competitive advantage
•Communicating such advantage effectively
to the target audience.
uniqueness
of the brand

STEP 1
Identifying the differences of the offer with the competitors offer
• The marketing offer may be differentiated along the following lines:
--Product differentiation --Service differentiation --People and image.
STEP 2
Selecting the differences that have greater competitive advantage
• When the company identifies several differences it can evaluate them with the
help of following criteria:
--Attractiveness --Distinctiveness --Primitiveness
--Affordability --Communicable

STEP 3
Communicating such advantage effectively to the target audience
• Once the company has chosen the difference it has to choose an appropriate
marketing strategy.

1.SMALL UNIT AND LOW PRICE
PRODUCTS
large size comes with high price which is not
affordable for rural customer
Making the products available in small and
low price to attract buying
2.NEW PRODUCT DESIGN
New product designs specially meant for rural
customers
By keeping in mind the lifestyle of rural
customers to connect with them
3.STURDY PRODUCTS
Sturdy products in terms of their weight or
appearance
Rural customers prefer strong and durable
products
4. BRAND NAME
Giving catchy and appealing brand name
to attract the customers
P
R
O
D
U
C
T
S
T
R
A
T
E
G
Y

• PRICING STRATEGY FOR RURAL MARKERTING
1.LOW COST PACKAGING
• Can be adopted by both, manufacturer and marketing men
• keeping the price low by small unit packing
2.SIMPLE PACKAGING
• Sophisticated packaging should be avoided
• Keeping simple packaging reduces the cost and hence price
3.REUSABLE PACKAGING
• Packaging that is reusable and can be refilled attracts the attention of rural
buyers
4. APPLICATION OF VALUE ENGINEERING
.Use of cheaper raw material to produce a product without compromising the
quality

• DISTRIBUTION STRATEGY
1.USING OWN
DELIVERY VANS
-To Take product to every
nook and corner of the
market
And helps in sales
promotion
2.ANNUAL MELAS
-Making products
available in melas so the
customers need not to
go to the mandis and
agri markets
3.PAINTINGS
-A picture is worth
thousand words
-It send simple and
clean message
-COKE, PEPSI and
TATA traders advertise
their products through
paintings

•PROMOTION STRATEGY
1. Promoting Products with Indian Models and Actors:
2. Promoting Indian Sports Team:
-Companies may promote Indian sports teams so that they can associate themselves with India.
-With this, they influence Indian mindset. ITC was promoting Indian cricket team for years;
during world cup they launched a campaign "Jeeta hai jitega apna ‘Hindustan India India India’’
3. Talking about a comman Indian: Indians likes to associate with the product.
When they can visualize themselves with the product , they become loyal to it
-Amir khan promoted coke
-As Amir khan projects simplicity and integrity the rural
customer admire him
-They think, if Amir drinks coke it has to be good.

Rural Marketing

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Editor's Notes