Rural Marketing : Rural Marketing The Rural Market Envt. : The Rural Market Envt. The Rural Consumer:
The Rural Demand
Other Aspects The Rural Consumer: A detailed Profile : The Rural Consumer: A detailed Profile Size of RCG
Rural population about 73% of total population.
Acc to 2001 census – 74 crore population
12 crore households – 70% of total
Location Pattern: A scattered market –
Urban population in 3,200 cities
Rural population in 5,70,000 villages
<1.1% - 5000
>55% - 500
>25% - 200 Slide 4: Socio-economic Position
Low purchasing power/per capita income
Bounded by tradition, culture, religion & community.
60% rural income from agriculture
>50% have income < Rs. 25,000
About 14% have income >50,000
In recent years, 70 % rural households have started saving their income. (service class, non-farmers like shop keepers) Slide 5: Culturally a Diverse & Heterogeneous Market
In terms of – religious, linguistic, social & cultural factors.
State to state variation in extent of development
From study conducted by IMRB (Indian Market Research Bureau) provides development index points for each state on
Health & education
Availability of public transport
Water supply, etc
Average villages have 33 index points
In Kerala – 88 index points
Bihar – 22
UP, MP, Rajasthan – close to 22
Maharashtra, Haryana, Karnataka – 40-50 Slide 6: Literacy level:
Rural India has literacy rate of 28% compared with 55% of the whole country.
Scenes have changed since last few years. Literacy rate has increased from 20% to 28%.
Every year 8 million people get added to rural India's literate population
Adult literacy programmes have been launched
Conservative & tradition bound.
But it has changed to a good extent due to:
Increase in income
Growth in education
Enlarged media reach
Growing interaction with urban area
Marketer's effort to reach rural areas Slide 7: Buying Behaviour: factors that influence
Social & cultural factors
Exposure to media
Exposure to urban lifestyle
The way the product is used.
Involvement of others in the purchase
The buying Behaviour has undergone a major change. There are people in the rural area whose income has increased & they have the potential to buy expensive products. The Rural Demand:Some well established products : The Rural Demand:Some well established products Pressure cooker
Cycles, bikes, scooters
Sewing machines Artificial jewelry
Tobacco & products
Bathing soaps, washing cakes, washing powder
Wristwatches Recent Trends : Recent Trends Steady growth
Welcome change in the composition of Rural Demand.
Several products already well established in the rural market
In many products, rural consumption accounts for a larger share than urban
In many products, rural market has overtaken the urban in growth rate – detergent powders, washing soaps, analgesics.
Position of durables - (bicycle – 53, ceiling fan – 19, radio - 42 ) Slide 10: Who buys the high-priced durables in the rural areas? NCAER (National Council for Applied Economic Research) classified durables into 3 categories-
Low priced durables – watches, radios, irons, fans, etc.
Relatively higher priced durables – b/w TV, sewing machines, mixers 2-in-1 music systems.
High aspiration & high priced – color TVs, refrigerators, motorized two-wheelers.
Factors behind the Growth & Diversification in rural demand –
New income due to agricultural/ rural development
Green revolution since 1970.
New employment, income & purchasing power. Slide 11: The expectation revolution –
The rising expectations have enlarged the desire & awareness.
Strengthened their motivation to work, earn & consume.
Rural demand is more seasonal –
Agriculture dominates the income source.
Purchasing on marriages & festivals (also the harvesting time) Rural Market Becomes Attractive To Corporates : The growing opportunity, one main driver -
Rural demand is growing rapidly
Increase in income/purchasing power has increased in access of products.
Heat of competition in the urban market –
Growing competition in the urban market
Rural market is largely untapped (advantage to early entrants)
Competition in urban area is tough for products whose penetration is high. (E.g. – toothpaste penetrates to 80% in urban & 30% in rural market)
Brand loyal customers in urban. First time users in rural.
Not competing in the rural market will keep them out of about half of country’s market Rural Market Becomes Attractive To Corporates Slide 13: Many cos. Have already taken to the rural market in a big way Tapping the Rural Market : Tapping the Rural Market Segmentation & Targeting
Sales Force Management
Marketing Communications Segmentation and Targeting : Segmentation and Targeting Geographic segmentation
Climate & level of irrigation
Nearness to a feeder town/industrial project
Income – regular income & seasonal income
Buying behaviour segmentation
Sources of data on rural consumers – CMIE (Centre For Monitoring India Economy)
Thompson rural index Product Strategy : Product Strategy Whether the product that is sold in the urban market can be supplied as it is or need any modification.
Economic and income realities should be considered.
Lower priced versions do succeed in many cases but not in all cases. Slide 17: Specifically designed products
Eveready’s Jeevan Saathi Torch
Model Variants - bikes
Colour Variants – Asian Paints
Different products/models, brands, packing, pricing & positioning
Package design & pack size
Logos symbols & mnemonics
Sell value brands, not cheap brands
Preconceived notions have no place Physical distribution : Physical distribution PROBLEMS:
Transportation & warehousing
Cost – service dilemma becomes more acute – transportation & warehousing costs r high
The delivery van – ITC & HUL have their own vans.
High costs can be covered if business is good Channel management : Channel management Problems:
multiple tiers add to the costs
Non-availability of dealers
Poor viability of outlets – manufacturer- additional expenses & shopkeeper- no returns
Inadequate banking and credit facilities – 50 villages & 1 bank branch
The village shop is the key to rural distribution
Improving the viability of the outlets – deal in no. of product lines. Sales force management : Sales force management What a salesman requires to be in rural market
Willingness to be located in rural areas
Cultural congruence – guide in choosing the right product and not forcing to buy everything or anything
Attitude factors – salesman should be patient & should have perseverance.
Knowledge of local language
Ability to handle several product lines
Creativity – create consumption pioneers & opinion leaders
Managing rural sales force – practical training to rural sales force Marketing communications : Marketing communications Selecting the media mix
Syndicated AV vans
Puppet shows, Harikatha
Communication should be uniquely assembled & delivered
Need for creativity – buyers are time consuming
HUL’s rural communication for surf Rural Marketing Is Developmental Marketing : Rural Marketing Is Developmental Marketing