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Introduction to Rural Marketing The first five years of the new millennium will belong neither to the urban markets which have reached saturation and where margins ... – PowerPoint PPT presentation

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Introduction to Rural Marketing
  • The first five years of the new millennium will
    belong neither to the urban markets which have
    reached saturation and where margins are under
    pressure not to the export markets, which suffer
    from inadequate infrastructure back home, and
    uncompetitive prices overseas. It will belong to
    rural marketing.

  • In the India context, the word RURAL is so much
    associated with agriculture and farmers that
    rural marketing tends to be seen as a marketing
    of inputs or outputs related to agriculture.

What is Rural Marketing?
  • Rural marketing is a function which manages
    all those activates involved in assessing,
    stimulating and converting the purchasing power
    into an effective demand for specific products
    and services, and moving them to the people in
    rural area to create satisfaction and a standard
    of living to them and thereby achieves the goals
    of the organization.

Rural v\s Urban
  • RuralCultivators n few non agricultural
  • Urbanmanufacturing,trade,commerce,professions

Size of community
  • Ruralopen farms small community are vly
  • Urbanurbanity size of community are vly

Density of population
  • Ruraldensity of population is lower than urban

  • Ruralsocial mobility less.More migration from
    villages to town.
  • Urbansocial mobility inreases with urbanity.

System of interaction
  • Ruralless numerous contacts per man.Predominance
    of personal relatively durable relations.
  • UrbanGreater complexity,superficiality
    standarized formality in relations.

  • Although the melting of the urban - rural divide
    will take a while, this is not for want of the
    availability of the means but for want of the
    rural consumer's mindset to change which has its
    own logic, which is driven by tradition, custom
    and values that are difficult to shed,

Attractiveness of rural market
  • Rural markets have become the new targets to
    corporate enterprises for two reasons
  • 1. Urban market has become congested with too
    many competitors.
  • 2. The market have reached a near saturation

  • Various factors which have made rule markets
  • Large population
  • 2. Raising prosperity

3. Growth in consumption
4. Life-style changes 5. Life-cycle
advantages 6. Market growth rates higher than
urban 7. Rural marketing is not expensive 8.
Remoteness is no longer a problem
  • Now for some facts and figures. The Indian rural
    market today accounts for only about Rs 8 billion
    (53 per cent - FMCG sector, 59 per cent durables
    sale, 100 per cent agricultural products) of the
    total ad pie of Rs 120 billion, thus claiming 6.6
    per cent of the total share. So clearly there
    seems to be a long way ahead.
  • Time and again marketing practitioners have waxed
    eloquent about the potential of the rural market.
    But when one zeroes in on the companies that
    focus on the rural market, a mere handful names
    come to mind. Hindustan Lever Limited (HuL) is
    top of the mind with their successful rural
    marketing projects like 'Project Shakti' and
    'Operation Bharat'.

  • Clearly the main challenge that one faces while
    dealing with rural marketing is the basic
    understanding of the rural consumer who is very
    different from his urban counterpart. Also
    distribution remains to be the single largest
    problem marketers face today when it comes to
    going rural. "Reaching your product to remote
    locations spread over 600,000 villages and poor
    infrastructure - roads, telecommunication etc and
    lower levels of literacy are a few hinges that
    come in the way of marketers to reach the rural

  • In 1998 HuLs personal products unit initiated
    Project Bharat, the first and largest rural
    home-to-home operation to have ever been prepared
    by any company. The project covered 13 million
    rural households by the end of 1999.
  • During the course of operation, HuL had vans
    visiting villages across the country distributing
    sample packs comprising a low-unit-price pack
    each of shampoo, talcum powder, toothpaste and
    skin cream priced at Rs. 15. This was to create
    awareness of the companys product categories and
    of the affordability of the products.

  • Khaitan fans' ad on a horse cart

  • The greatest challenge for advertisers and
    marketers continues to be in finding the right
    mix that will have a pan-Indian rural appeal.
    Coca Cola, with their Aamir Khan ad campaign
    succeeded in providing just that.

"Yaara da Tashan... ads with Aamir Khan created
universal appeal for Coca Cola
  • "Yaara da Tashan..." ads with Aamir Khan created
    universal appeal for Coca Cola
  • Coca-Cola India tapped the rural market in a big
    way when it introduced bottles priced at Rs 5 and
    backed it with the Aamir Khan ads. The company,
    on its behalf, has also been investing steadily
    to build their infrastructure to meet the growing
    needs of the rural market, which reiterates the
    fact that this multinational has realised the
    potential of the rural market is going strength
    to strength to tap the same.

  • For HLL, a one rupee or a five rupee sachet or
    the Kutti Hamam (the small Hamam) helps in giving
    the consumers a trial opportunity. While it does
    help in generate volume but not in terms of
    values. "Till the time that volume - value
    equation is managed better.
  • Ultimately, the ball lies in the court of rural
    marketers. It's all about how one approaches the
    market, takes up the challenge of selling
    products and concepts through innovative media
    design and more importantly interactivity.

  • Amul is another case in point of aggressive rural
    marketing. Some of the other corporates that are
    slowly making headway in this area are Coca Cola
    India, Colgate, Eveready Batteries, LG
    Electronics, Philips, BSNL, Life Insurance
    Corporation, Cavin Kare, Britannia and Hero Honda
    to name a few.

  • Interestingly, the rural market is growing at a
    far greater speed than its urban counterpart.
    "All the data provided by various agencies like
    NCAER, Francis Kanoi etc shows that rural markets
    are growing faster than urban markets in certain
    product categories at least. The share of FMCG
    products in rural markets is 53 per cent,
    durables boasts of 59 per cent market share.
    Therefore one can claim that rural markets are
    growing faster than urban markets

Satellite dish antennas reach rural India
In 2000, ITC took an initiative to develop direct
contact with farmers who lived in far-flung
villages in Madhya Pradesh. ITC's E-choupal was
the result of this initiative.
  • So the fact remains that the rural market in
    India has great potential, which is just waiting
    to be tapped. Progress has been made in this area
    by some, but there seems to be a long way for
    marketers to go in order to derive and reap
    maximum benefits. Moreover, rural India is not so
    poor as it used to be a decade or so back. Things
    are sure a changing

Typical shop in rural India stocked with sachets,
Thank you