Rural Marketing :Rural Marketing By : Jivitesh Kumar Choudhary Gautam Singh Pramod Kanal Saurabh Gupta


Rural Market Environment :Rural Market Environment The Rural Consumer The Rural Demand Other Aspests


The Rural ConsumerA Detailed Profile :The Rural ConsumerA 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 :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. 50,000 In recent years, 70% rural households have started saving/investing their income


Socio-Economic Position :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 :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 market’s


Socio-Economic Position :Socio-Economic Position Buying Behavior Factors that Influence Literacy level Occupation Social & Cultural Factors Exposure to Media Marketer’s 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 :The Rural Demand Some well established products Pressure Cooker Artificial Jewellery Cooking Utensils Medicines Batteries Tobacco Products Scooters, Motorcycles Soaps,Detergents Bicycles Electrical Goods (fan,light) Radio T.V Pesticides, Fertilizers Wrist Watches Tea Mobile Phones Sewing Machines


Recent Trends :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 :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 :Companies already into Rural Market


Tapping the Rural Market :Tapping the Rural Market Segmentation & Targeting Product Management Physical Distribution Channel Management Sales Force Management Marketing Communications


Segmentation & Targeting :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 :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 :Product Strategy Specifically designed products Tractor Everyday’s 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 :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 van’s High cost can be taken care of, if the sales volumes are high which is most likely if the porduct is marketed properly


Questions ???? :Questions ????


Channel management :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 !!! :Thanks !!!