.

il
I

I
,

a>\-

CHAPTER. 2

REVIEW OF LITERATURE AND

RESEARCH METHODOLOGY
REVIEW OF LITERATURE
(lver the years. extensive literature has emerged on Rural Marketing
place the
In the last decadespeciallysince 1991,wave of globalizationtook
that rural
expansion in the literature on the subject has been so tremendous
While rnost
marketinq has evolved into a separate,full fledged field of study

'' 'ion
concepts
of the bookson rual markehngdealswrtn appncar of marketing
isruralmajket,quitefewovertheotherdimensionsofruralmarketinglike
Authors like Philip
r'uralretail, rural economyand role of IT in rural marketing.
I(otlor. RarnaswamyV.S.' and Nama Kumari, RV

Badi and NV

Badi' CGS

KrishnarnacharyuluandLalithaRamkrishnanandSanalKurnar,havedealt
tool'
with the subject essentially as a management and marketing
wnere
The tenn rural rnarketing is expansion of marketing management
of
rLnal ntarket is treated as separatework field for the irnplernentation
rnzrrketingtools to tap the rural nrarket successfully'

(42)

According to Sontakki,C.Nr
A Hindi poet hasrightly said, " BharatMata Gram Vasini", which means
rnother India lives in her villages.Accordingto the 1991 census,India's
populationwas 850 million, of which 75 percentlived in villages.This is the
average.

There are statelike U.P, M.P, Rajasthan,Kerala, Bihar and Orissawhere

the rural population varies fiom 80 to 90 percent. The spread of population
in 4,200 cities and towns is to the extent of 25 percent,and of the remaining
75 percent is in 5,76,000 villages. Of these, 15,00,000villages have a
population ranging between 200 or less, 3,16,800 villages are in the range
of 500 or less, more than 200, 6.300 villages in the range of 5,000 or more,
and the remaining 1,02,900villages in the range of 5,000 or less, but more
than 500. As for the age-wise distribution of the rural population, 65 percent
is rnade up of adults, 29 percentchildren and teenagersand 6 percent of old
persons above the age 60 years. Literacy rate is 30 percent as compared to
the overall 40 percent for all India. Fifty percent of the total national income
is generated in the rural sector. Agriculture and agricultwal wages account
for 60 percent and 1'7 percent respectively,of the rural income' indicating
that the prosperity of rural population depends on progress and prosperity of
amiculture.
Prof. C.K. Prahladz, well known management Guru wrote that
l.

2.

'The

in the Indian,Ist Edition . 1992,Kalyani

Sontakki,C.N. MarketingManagement
Publictions,New Delhi, Page 562.
Dr. C.K. Prahlad (Prof. ln University of Michigan), Marketing Mastermind, Ist
Edition : 2004, ICFAI, Press,Page : 11.

(43)

their customers', The

future lies with those companieswho see the poor as

tenn

'mral' has manY definitions, The census of India defines it as "revenue

populationis
villaeeswith clear surveyedboundaries,where the densityof
llotlnorethan400peoplepersquarekilometerwithat|east.75o/oofthemale

'
;

lltlpulattolt.erlgagedilragricuIturalandalliedactivitiesandwhichdoes
'rural' in a very
have a rnuntcipal corporation or board" Companies define
a village with population
clifTerentway. FMCG companiesconsider a town or

durable
lessthanor equalto 20,000as constifutinga rwal areawhile consumer
companiescountplaceswithpopulationupto50,000asrwalareas.Whatev

thedefinrtron,onepolntthateverycorporateagreesonisthatrurallndia
'l42 mil]ltonis not a market
and a populationof
ivith 128million households
Applied Economic Research
to igl.rore. A study by the National Council for
(NCAER) found that the rural markets in lndia are growing at twice the rate
that tnore and more
of their urban counterparts'and it comes as no wonder
potentialof the
are now fbcusingtheir energiesto tap the huge
eor.npanies
Indian rural lnarket Place
TheNCAERpublishedastudywhereinlndianconsutnerswereclassified
the consumer class into
by the propensity of consumption This study divided

consumers
lne consulllsrs
top. The
the top
to the
five sections,from the bottom of the consumerscale
primarily consurle
at the lower end of the scale (the destituteand aspirants)

top end of the scale(the

essentialcomtnoditiesand basic durables,while the
are those that ilom the
l-righerend of the consumerclass and the very rich)
producers
rnarket for brandedproducts from both national and international

(44)

garments,electronicgoods,cosmeticsand lifestyleproducts.
like autornobiles,
But it is the middle level of thc scale(the climbersand the consumers)
thar fiom the larger chunk of the rnarket and is prirnarily located in the rural
and semi-urbanareasof India.
Rural lndia is hon-reto nearly 41 Yo of the country's rniddle-classand

58o1o
of the total disposableincome.Moreover,NCAER reportedthat the
number of lniddle end higher income'rural householdsequal that of the urban
areas.
.

.t

Raiu M. Rathod' also elaboratedrural marketing in this manner, "The

tem rural marketing which was earlier used as an urnbrella refers to all
corngercial transactionof rural people.It acquireda separatemeaning of gfeat
significance in 1990s and liad evolved fiom agriculture tnarketing".
Today rural tnarl<etingcan be seen as a function which rnanagesall
those activities involved in assessing,stimulating and converting the purchasing

porverinto an effectivedemandfor specificproductsand servicesand moving

them to the people in rural areas to create satisfaction and a standard of living
to thern and there by achieve the goals of the organization.
"PradeepKashyapashoweda comparisonbetween.Developedrural and
develooins rural in this manner.,,
Rathod, Rural Marketing, Edition : 2004, ICFAI. Press,Page ; 3 8

Raju M

4.

PradeepKashyap,Marketing White Book year 2005, page : I I l.

'l
J

(45)
T a b l e2 . 1
'2,
of household in each group owning the product
Tale of two rurals

I
$

Category

Developed rural

Developing rural

xSize (rnillion hh)

43

90

% o f rural population

)z

o?t

Two-wheeler

10

Carljeep

0.8

03

Refiigerator

( olor -fV

t2

Telephone

Toothpaste

4)

27

Toothpowder

36

36

Branded tea/coffee

11

Packagedatta

Toilet/floor cleaners

oil

I J

l)rgss reach

J+

l9

TV reach

57

34

+Punbab, Haryana, Gujrat, Mahrashtra, Karnataka, Kerla

Source lRS 2002/HRG Analysis.

(46)

M. Arif AJi Khan' focused on the dimensions of Rural Marketing in this

rnanr]ers.
"At present,agricultureis contributing40 percent of GDP and showing
a growth of ll percent. The capital industry is experiencinga much higher

groivth-23percentin 1994-95(April end). The shareof the rural sectoris

35 percentin the total investmentof the private sector.Factoriesfor production
of t'ertilizersand pesticides.fann irnplernentsand rnachinery,and rnotorized
trolleys are being located in the rural regions. Developrnentwould have been
faster than at present. if power and telecommunicationfacilities had been
developed.The state and the central govemrnentshave gone all out to attract
global equity to develop infrastructure".
G.M. Pande6expressedhis opinion as new consciousnessabout rural
rnarketing that.
"The broad emergingprofile of rural marketing,indicatesthat in future,
rlrarketingin rural marketsis a challengingtask. In the coming future, in order
to meet the expectations and aspirations of

rural consumers, the business

practitioners, rnarketers,marketing scientists and scholars, will all have to

encounter the realities of such expanding rural markets
Indian rural economyis characterisedby severalfeatltres'viz.' lalge but
)

out to the ruralmillions,"Brandequity",TheEconomic

M. Arfi Ali Khan,Reaching
Mumbai.
timesdate 28.10.92

Home,
G.M. Pande"RuralMarketing",Ist Edition : 1997,NationalPublishing
Delhi.Pase31.

(47)

dispersed; erratic seasonal and yearly variations; poor transport facilities;

inherent resistanceto change; and irrational geographicalvariations owing to
differences in life-style, beliefs, consumptionpattem and purchasingpower.
An understandingand analysisof these factors needs a new approachto the
study of the dynarnics of rural marketing.
Study of mral rrarketing in Ind'ia will have to be approachedas a
t

system.The rnarketingsystelnis tlot s)'Ilonylnous

generalrnarketing
cornpetitive

rvith the functioningof the economy.In view of rapid adoptionof liberalization,

privatization and fiee economy policies adoptedby the Governmentof India,
it will be a rnistake to conceptualize the marketing system or even market
economy as capitalisrn. Instead,the character and capacity of the market system
rnust be conceptualizedin terms of the historical background and drift, the
traditional legal system. and social and political goals and value system of
s()crcly
If the rnarketing practitioners/scholarsdesire to contribute to rural
prosperity, they will have to widen the scope of the study of rural rnarketing
asidethe presentprinciplesof rnarketing,which
and treat it separately-keeping
n-

have an exclusive orientation to urban marketing"

focusedon the differencebetweenrural and urban

T.P. GopalswamvT
features by presenting a comparison table 2.2 as below :
7

T .P Gopalswamy,rural marketing,wheeler PublishingDelhi: 1997, Page. 28.

(48)

TABLE2.2
Difference Between Rural and Urban Features

sl.

Features

Rural

Urban

Dernand Pattem

Seasonal

Uniform

Spread

Widely Spread

Concentrated

Literacy Level

Low

High

No.
)

Inadequate
Sourceof Supply
PhysicalCornnrunication Poor

4.
5.

Adequate
Very good

Facilities
Known
Not known
Known
Not known
Word of mouth Any Media
Mostly oral

6.
7.
8

ProductKnowledgg

:,,.

Product ConcePt

Not knowh

Known

l0

Tirrelinessof SuPPIY

Untimely

Timely

l t

After Sales Services

Inadequate

Adequate

Awarenessof Needs
Source of lnfonnation

Availability
ExpendittrrePattern

l2

Somewhat
Unproductive

Productive

tl

Cuiclance on I Jsage

Needed

Not needed

l4

Per Capita Income

Low

High

l5

Mostly Yes
Product as StatusSYrnbol Mostly No
Rarely Available Easily
Consumer Protectlon

l6

Available
l'7

Choiceof Brands

Low

High

of
On the other hand Prof. S. M. Jhha8pointedout someweaknesses
rural marketingin this rllanner"
8

Prof. S.M. Jhha, "Changing Rural Scene", National Seminar on Rural

Marketing at Pant Nagar, March 18,2005.

{i

(4e)
- -d\

In spite of rural rnarketing boom in India, the Indian Marketing literatwe

has shown several weaknessesbroadly summarized as follows:

I

In tenns of participants, it almost ignores the rnajority of rural

population, the rural poor.

2.

I
' . 4

In tenns of products, it concenkates on tangibles and ignores some

of the basic need satisfuing 'products'
health, education, drinking
.like,
water, housing and other products like transportation, labor, land,
money etc. Even in tangibles,the focus seemsto be exclusively on
econornic goods.

3.

In terms of modalities, it does not say much about the criteria for
developrnentof market centers(excepta few economicstudies),roles
of various parties (including regulating agencies)with regard to a
large anay of transactionsand so on.

In terms of norms, it doesnot say much about the nonns of behavior,

liabilities of various paf,ties, etc., even with regard to conventional
soods.

-*-

5.

In terms of the outcome, the marketing literature, ln general,is

negligent,rnore so, the rural marketing literature.
Prof. Jh-ha found that 'ln the Indian marketing literature a dominant

theme is agricultural marketing, focusing mainly on the marketing of agricultural

produce and that of agricultural inputs. Even in terms of products the focus
iF

4l
(50)

I
is lirrited to grains, cash crops and inputs like fertilizers, pesticides,seeds
and fann rnachinery.Itshows a clear bias in favor of those who use modern,
high cost inputs and produce surplus for urban consumption, constituting may
be, around l0 per cent of the rural population.
However %o of penetration for branded products in rural area rs
*3

increasing as per the report of businesstoday'. "Some companieslike

Hindustan Lever, Nirma, Parle Foods and Marico Industries are making inroads
into the inter-land, usually displacing unbranded offerings and regional local
'10
product
brands. But their ingress remained restricted primarily to the
with the highestpenetrationin the rural market. According to ORGc.:ategories
MARG survey, these products (together with percentagepenetration, and brand

,-J

with highest pentration) were as follows until il few years ago : Toilet Soaps
(88.26% penetration Lifebuoy), Washing Soaps (87 4% penetration-Nirma),
Edible Oils (84 67% penetration-Palmolive, Anrrpam, Mustard Oil), Tea
(79.09% penetration-Nirrna),Biscuits (59.80% penetration-Pale-G),and
Sharnpoos(38 28% penetration-Clinic)"

-*-

9.

lr!

BusinessToday, July 3, 1999, Page I32.

'

(51)
Table2.3
The ORG-MARG-Business Today Rural Market Watch
Category

Penetration

Brand with highest

penetration

Toilet Soaps

88 2604

Lifebuoy

Washing Soaps

87.4 "t%

Ninna

EdibleOils

84.67%

Palmolive, Anupam
Mustard Oil

Tca

79 07o/o

Lipton Taaza

Wlshing Powder I-iqLricl

10 260

Nirrna

Biscuits

59 800/('

Parle-G

Coconut Oil

53.7604

Parachute

Safety-RazorBlades

45.34%

Topaz

Shampoos

38 28yo

Clinic

Ref'erence: BusinessToday - July 3, 1999

Prof. VelayudhanSanal KumarlI0 errphasizedon the rural rnarketingresearch.

Major Techniquesof Market Research

There are several market researchtechniquesavailable. Any standard
textbook would provide arnpleinforrnationabout them. However, solne of them
czur be of irnrnensettse for researchingrural markets. Solne of tlretrr ate
discussedbelow:
10.

SanolKumar(2002),RuralMarketing,Targetingthenonmnsumer,
Velayudhan
Delhi
Response,

4l

(52)
tjr
Panel Research:
Interviewing or gathering data lom a panel of respondent agreeing to
be interviewed at appropriate intervals. These panel members keep a record

of purchases,advertisementexposures,shoppingpattems,etc. that the researchers

rnay be interested in. However, this requires the panel members to be literate,

t t + .

this technique may not be appropriate in rural situations'

Market Survey : Most widely used tehnique to obtain first hand field
data, when the sought infbnnation is not available with corrpaniy's irltemai
reoorclsas well as externalpublishedsources.It is also ttsedto know the latest
infonnation fiom any sample of population.Following are the steps involvec
in a market surveY.

Marketing SurveY
l. Problemdefinition
2. Selectionof the surveYrnethod
development
3. SarnplingQuestionnaire
4. Pilot surveY
*;.

Field Work
l. Selectionand training of investigators
2. Interviewing/collectionof data
3. Supervision/overseeingthe fieldwork

,*'

) l

rl

""
(53)

L\
Processing
l. Processingof data (EDP/.manual)
2 Tabulating
Analysis und interpretution

l. Editing

'-t

2. Interpreting data
3. Statistical analysis and interpretatitrn

Report Making
L Summarizingfindings and recommendations
2. Report writing
Chosh and Krishnaswamyll wrote in their article about the importance
of rural retail with impotance of purchasebehaviour as ahead.
Purchuse Behuvior oJ Consumer :

Purchase Behavior of Consumer is greatly influenced by rural retailer

' *-

'shop-loyalty' (rather
who helps create brand knowledge in rural folk, and enjoys
than 'brand loyalty') of rural consumer. In rural areas of central part of the
oountry,

'Vyavahar' (largely implying 'relationship' in social dealings) is a gteat

1L

Ghosh& Krishnaswamv.
"TheRuralRush".TheweekVol. 15.No. 44, i997.

(54)

a{

'Vyavahar'helpsthosedevelopinglong lastingrelationships'
influencingfactor.
The
It is this 'Vyavahar,that the rural retailer enjoys,builds and strengthens.
must tap this aspectof socialbehaviorfor rural marketing.Gillette
oompanies
lbr example.is alreadytappingit'
Characteristics of Rural Retailers

--t

high
Rural markets are geographically. widespread' involving
entry
distribution costs and low volumes, working as a deterrent for
of Products in rural markets'

2.

part time
Retail premises, are mostly rented, and retailing is often
occuPation.

3.

to those in
Retail Shelf, stock few standard categories compared
urban areas

4.

of ensure that a
Stock tumover is low-posing a challengeof how
the shelf'
Product or brand is on

Behavior of the (Retailet)

l.Creditfacilitiestocustomer:(bytheruralretailer)iscommon,
- *r-

often on essentialitems'
2.

discounts
Pricing: Someretailersoften over charge'not posing on
tocustomors.Thereisalsodeliberateundercuttingofprice.

:G

':'.

'I

(55)

3.

Reasons fbr stocking (product/brand) : Either dernand, or

wholesaler'spush.

4.

Information and influence sources: The wholesalersand retailers

are both information sources, and influence on each other.

5.

Purchase source : Since visits of distributors' agents to interior

village retailers is very few, the rural retailers travel down to feeder
towns for supplies.

Channel credit: Village retailers zrvail credit facilities offered by

distributors in f'eedermarkets.

7.

Channel promotion: Retailersin feedermarketsavail more discount

as comparedto retailers in interior .villages,for they prefer not to
stock more.

8.

Promotion by the retailer: While rural retailershave great influence

on br-ryerin order to promote sale, the retailers are also influenced
by the commissionand credit receivedso as to do such a promotion.

Prof. R.V. BadiI2 describedon the role of rural Advertisins.

"lt is a general assumption of advertising theory thatadvertising helps
to create demand. It rnay be worth asking to what extent advertisingcreates

12.

R. V. Badi, Rural Marketing,First Edition: 2002, HimalyaPublishingHouse,

Delh| Parle 229.

(56)

demand, particularly in our rural society, which is in transition frorn tradition

to rnodernitv: and. to what extent it helps only to accelerate demand after

the social and environmentchangeshave taken place. The basic trends ot

dernand fbr products are detennined prirnarily by prevailing social and
environmental conditions.

for a
tne demand
oemanc ror
lncreasethe
mucn to
t lncrease
itsell serves not so much
Advertising itself
product as to speedup the expansionof demandthat may come from favorable
conditions. and to retard advancesdue to unfavorableconditions. Most nrral
treat thrs as an altnostinsolubleproblern.becnttseother factorsalso
rnarketers
stimulate dernand; for exarnple, price cuts, quality changes and rising real
lnco1Tles'.

Lalitha RarnaKrishnal3alsoadvocatesthe propermode of communication

to lnake effective n]ral marketing.
The battle for the rural consumerrnarkethas been increasingin intensity
over the years. Product promotion has become the biggest challenge,to rulal
rnarketerstoday. Only thosewho can overcomeit will emergesuccessful.Rural
rnarketers have to skillfully communicate with a much larger but scattered
audiencecharacterizedby variationsin language,culture and life styles. Their
poor filessagecomprehensionand low media exposureonly add to the problem
through mass media.
of cor-r.ununication
ll

Eduction,
LalithaRamaKrishan,RuralMarketing,lst Edition2002,Pearson
Delhi, Page240

(57)

L
ll.

To explore the availablemedia at the different location,

To developregion-specificconsuner profiles and to understandthe
characteristics
of targetrnarket,and

II L

To designright communication
and motivationstrategiesto induce
target audienceto buy the product.

Exploring

Media

Promotion media rnay be classifiedbroadly into three categories:Mass

rnedia, local media and personalizedmedia. The various media vehicles are
given below (Table 2.4)
Table2.4
Various Media Vehicles
Mass Media

Local Media

Radio

Haats, Melas, Fairs

Direct Communication

Cinerna

Wall Paintings

Dealers

Press

Hoardings

SalesPersons

TV

Leaflets

Researchers

PersonalizedMedia

Video Vans

Folk Media
Animal Parade
Transit Media

But the consurnption

shareis increasingin rural marketwhich is exhibtedin
t a b l e2 . 5 a s b e l o w:

I
/6R)

Table2.5
Rural Share in Non-Durable Products
Non-Durable Products
Share of Rural
Percentage
AnalgesicTables

45.70

Batteries

56.2Yo

Blues

s2.3yo

CoconutOil

41.6%

Iodized Salt

5l.4yo

Safety Razor Blades

54.1%

Tea

sl3%

Toilet Soaps

4 1 . 90/o

Washing soaps

56.6%

Washing Powder/Liquids

46.4Yo

Brand awarenessis increasingin rural India it is stated by Business

{

-;tL/

Worldraand is shown in table 2.6

14. Business
World, April 1999,Page22.
- :

.,!

(5e)
Table 2.6
Rural High Preferance for Brands

< 20"/"

2l-40"

81-100%o

4l-600

6l--80o/o

Iodised
Salt
Washing
Cakes

Biscuits Toilet Soaps

Washing
Tea

Branded
Necesstty

Non
refined

oil
Popular

Powders

Blues

Coconut

oil

Vanas-

Prernium

-^+:

P4Lr

Bulbs
Hair
Oils
Refined
Premium

oil

Home
lnsecticides

Analgesics
Safefy
Razor
Blades,
Toothpastes,
Shampoos
BatteriesRubs
& Balms Skin
Creams,
Toothpowder
Toothbrushes
Antiseptic
Creams
Antiseptic
Liquids
Chyavanprash
Digestives
Mosquito
Repellant
Shaving
Preparations
Tube lights

But the Growth in Fast Moving consumer Goods allures to colrlpaniesto

plough this virgin rnarket"lj as depicited in Table 2 7

I 5. Marketing White Book, year 2005, Page: 119 & 120'

*l
(60)

Table2.7
Year-on-year growth of largest categories
Category

FMCG (Total)
I

47,800crore

Growth "/" 200312002

t.+

10%

2.7

,7o

0.1

Biscuits

7Yo

11.7

PackagedTea

6%

-10.0

Detersent Cakes/Bars

5Vo

-4.0

Consumer Pack

4%

27.2

Toothpastes

4%

Skin Crearns

30h

2.8

Consumer Pack

3Yo

2.9

Beverages

2%

3.7

Toilet Soaps

Washing

Contribution 2003

Powders/Liquids

-;('Y

Refined Oil

,1

dl

(61)

-'3
Thble2.8
Long term growth of largest categories

Category

Contribution 2003

CAGR Vo.1999-2003

FMCG (total)

47,800crore

4.4

Toilet Soaps

t0%

l.l

'70/o

5.5

Biscuits

7Yo

9.8

PackagedTea

6%

-3.7

5Yo

0.2

ConsumerPack

4Yo

26.s

Toothpastes

4%

0.9

Skin Creams

3Yo

7.7

Consumer Pack

3o/o

6.5

Beverages

2%

6.6

Washing
Powders/Liquids

Detergent
Cakes/Bars
Refined Oil

Vanaspati

.l

(62)
16
Roli Sehgal linked rural marketing with nral tourism also.
Rural India has always been intriguing, both, to the rnarketers and the
tourists. Every now and then see a foreigner with a sun hat and a camera,
rvalking along the dusty roads to see the real India. Similarly, rnarketerstrying
their luck in the vastly populated Indian villages. Experience with Indian
villages has been a mix of opposites.Seventypercentof the Indian population
residesin villages. They form the bulk of the Indian consurners,but only by
head count. It is only in numbers and vote banks that the villages beat their
turbancounterparts.On pararneterssuch as economic growth and spending
capacities,village are just beginning to catch-up. The marketers look at the
capacity and willingnessof consumersto pay, and in this aspectuntil recently,
the villages did not farewell. So, on the one side they provided a huge mass
of 70 crore humans, on the other, they had limited buying potential.
But, things have begun to change. With a good monsoon and state
support, villages have begun to make their presencefelt, as a buyer base. For
volume driven industries,village can be a very attractive segrnent.However,
targeting them is not easy and has many obstacles.

R.C. Arora" is hopeful with the changingscenarioof Rural India.

l6

Roli Sehgalat NatonalSeminaron Rural Marketingat Pant Nagar, 18-19

March,2005.

17

of Agricultura& alliedsectors,S. ChandCo.

R.C. Arora, RuralDevelopment
: 1995

(63)

Changing Scenario
The rising inooure levels, especially agricultural income, further aided
by increasing literacy levels, modern communication, infrastructural systems,
growing rural electrification,the various rural developmentschemesand the
priority and importancegiven to rural developmentin the five yea:' plans, alL
|

,,

point towards a significant growth in the rural market potential As a result

of the growing prosperity and faster economic development.a larger cash
econofily has etnerged in the agricultural sector'
This is basically due to the rural developmentpolicies adopted by the
govemment. The efforts at achieving a distinct shift of investment from the
urban to the rural areas have been achieved by granting of subsidies and seed
rnoney assistanceto fanners.
Further,the large numbersof programmesto promote rural industria-lization
are likely to generatea rnultipliereffect.Credit facilitiesfor the fannershave
been provided fbr at a single-window clearance cell. Besides, agro-based
industries have been set up in the rural areasto create more and more jobs
and to check exodus to the urban areas. Thus, the potential rural market has
been expanding, and is set to grow with faster agricultural and rural
development.This potential is widely dispersedover a large scatteredarea.
Therefore, the rnarketing cost of total potential would be high.

(64)

"Why multinational compantesare finding rural rnarket important for

thern self it is depicted on the website of bonnet"?I8
Most MNCs like Hindustan Lever, Coca-Cola' LG Electronics, and
Phiiips are expandingthenrselvesby foraying into the lndian rural market The
I

vast size of the rural market offers them a huge base to expand'

0pportunity
The Indian rural nrarket has over 128 million householdsand the rural
population is nearly about three times the urban population. It cornprise 4l

% of lndia'srniddleclassand accountsfor nearly58'/oof the total disposable

ir]come.The rural marketcapturesa good 50% shareof the TV sets,bicycles,
cookersetc.It hasalsobeenfoundthatthe marketof FMCG products
Dressure
in the rural area has been growing much faster than the urban rnarket.

The 44 Approach
The rural tnarket,however, is not easyto penetratebecausethe number
of daily wage earnersis large; the villagers depend heavily on the monsoon
for their yield. Rural consurnption is also linked with festivals and special
occasions.Besides all this there are power problems, bad roads, etc

Avaikftility
India has more than 627,000villagesspreadover an areaof 3 2 million
sq kn.r With increased market penetration marketers can trade off the
l8

www.blonet.com.

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distribution cost and can make their brands reach the far flung interiors
For example, HindustanLever has built a strongdistributionnetwork of
rickshaws, bullock carts a.ndboats to reach the rural people.

AfJbrdability
I
;

.Rural consumershave low disposableincomes. Hence, the products

)
i

offered to them should be affordableand to addressthe issue,companieshave

come up with small unit packets.For example,HindustanLever launchedits

50 grn Lifebuoy soap at Rs.2 and Coca-Cola came up with srnall packets

of Sunfill al Rs. 2 for a 25 gm Pack.

Acceptability
LG Electronics" is one company that has been widely acceptedin the
rural areas. The reasott: It developed customized TV for the rurtrl lnasses,
'sampooma', which became a hit in the very first year. Even insurance
cornpanieshave designed products according to needs of the rural rnarket.

Awareness
HindustanLever has its own companyorganizedmedia and relies heavily

on it. Their stockiestorganizepromotionaleventsfor brandpromotion.In the

caseof Godrej,they reachin the interior areaswith the help of radio. This
helps thern reach to the local peoplein their local language.

+t

'

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Another websitefinancial express.comemphasizedon that rural marketing

strategiesneed to be customizedl9.

Rural Marketing Strategiesneed to be customized

The last one decade has brought about drastic changes in the rural
rnarket. It has become a more stnrctured and prioritized location for many
corporate.Earlier, the distribution systemthat existedwas very feeble and there
l

or promotionalcampaignsto reachthe rural areas.

were no innovativestrategles

'!I

MNCs have now realized the potential of the rural markets. Companies
have oonre up with special products like shampoosachets,srnall packs of
biscuits customizedoil, TV, etc., for these markets.
Campaignslike "Project Bharat" by Hindustan Lever saw a 50% rise
'a>:

in the rural rnarket share over a span of five years. The second phase saw
a carnpaignby Colgate Palmolive under the name "Project Jagrati", which was
launohedin 2001. This proiect increasedthe penetrationof its dental cream
in rural areas.
The result of these campaignssaw a number of retail outlets selling
various brands and categoriesin the villages.

- j:5

Location plays an irnportant role in marketing, and therefore the

availability of products at the right place is desirable.

I 9. http://www.financialexpress.com.

(67)

Some other key points of Rural Marketing are :Reach-to make a product available to over 6 lakh villages with poor
roads is a big challengethat the companiesfaco. One has to have a proper
distribution network to reach the f'ar-flungareas.
Pricing .' the price of the products consumers has to be low and
affordable. needs of the rural consumers.
Product uw(reness: right products should reach the right time. Hence,
product awarenessis very important and companiesshould promote their
products in places like fairs, hats etc, where people come in huge numbers.
Hurdles: reaching the rural mass is not easy. Besidesthat, the demand
ftorn the rural consumersis not consistentand their spendingpower also varies
with their agri-yield.The low level of exposwe,poor standardsof living, lack
of inffastructureis some of the rnajor hurdles that the cornpaniesface.
Stn egies: companiesneed to educatetheir target audience and make
them aware of their brands. They should also pick up self-help groups and
rely on the educatedand unemployedyouth for "sustainingtheir distribution
r:hanlels.
-

",.-

Consumerbehavior: the attitude and lifestyle of the rural folk has

They are increasinglybecomemore receptive:They are now getting
charrged.
influencedby "word of mouth" and havestartedlookingat value for money.

f=

(68)

The changingmarket scenariodemandschangein the corporatemarketing

t'

strategiesas well. The sales team had be to be more aggressiveand the

distributionhad to be in place. This not only makes comrnunicationeasier,

oheaperand simpler,but one can also add a regionalflavor to it. Peoplecan

recognize and identifli brands through color and packaging Over the years,
l

changehas occurredaf both ends,and now we seerural consutnersoccupying

a lruge rnarket share in all the sectorsof the market

."According to Avdhesh Kumar Singh"20.

Rural rnarketingis a fashionablesubject today, though it is famore

rrnportantfor a developingeconomylike that of India. Different peoplehave
different definitions of rural marketing. This happensas the subject has been
relatively unattendedby serious academicprofessionalsThe opening up of
of purchasing
the dornesticeconomyto externalcompetitionard the emergence
power in the rural areas,businessand developmentprofessionalcalls for a
better understandingof the concept and processes,of rural rnarketing.
Rural marketing is the process of developing,pricing, prornotrng'
distributing rural specific goods and ssrvices leading to exchangesbetween
r,rrbanand rural markets which satisfies consumer demand and also achieves
organizationalobjectives.The term rural marketing which was earlier used as
an urnbrella tenn to refer to all commercialtransactionsof rural people,

zo

Edition2005,
AwadheshKumarSingh,RuralMarketingin IndianPerspective,
Page2
New Age Publication.

4
Li
]K

(6e)

I
I

acquireda separatemeaningofgreat significance

in r990s Since l9g0s, India,s
industrial sector had gained in strength
and maturity. It,s contribution to
GNp
increasedsubstantially.A new service
sector had emerged signifring
the
rnetarrorphosisof agriculturalsociety
Due to deveropmentprogramnesof
the centrarand stategovermnents,
service organizationsand socialryresponsible
businessgroups like Mafatlal,
Tatas' Birras'Goenkasand others,the
rural areawitnessedan a, round
socioeconor'c progress The economic reforms
of 1gg1-g2lirrther accereratedthe
processby introducingcompetition
in the markets.Steadilythe rural
market
has grown for householdconsumables
and durables.
Following factors have been identified

to be responsiblefor the rural

rnarketboom
Increasein population,and hence
lncrease in detnand. The rural
population
in l97l was43.g0crores,

which increasedto 52.50 crores

in i98 I, and 72 croresin 1994;

2.

A market increase in the rural incomes

due to agrarian prosperity;

Large inflow of investmentfor rural

developmentprograrnrnesliom
governmentand other sources;

4.

Increasedcontactof rural peoplewith

their urban counterpartsdue
to developmentof harsport and
a wide communication network;

{:i

'
(70)
.\w

5.

Increasein literacy and educationallevel among rural folks, . and

the resultant inclination to lead sophisticatedlives;

6.

Inflow of foreign remittances and foreigr made goods into rural.

7.

Changes in the land tenure system causing a structural change . in

the ownership pattern and consequent changes in the buying
behavior.

On the other hand T.P. Gopalswamimade comparisonbetweenrural

vs wban demand.2l
On going through the views of different eminent educationists and

professionals,it was observedthat a lot of work has been done in the field
of rural marketing, but most of work is focused on agri-products based
marketing. As the large level of production in being done by companiesin
)

fast moving consumergoods,thay needa new market for selling their products
and incresing profits. This is the reason why the researcherpick this field
for research study.

/-.\.

21

T.P. Gopalswamy,rural marketing,wheelerPublishingDelhi: 1997, Page: 28

.!

(71)

RBSEARCH HYPOTHESIS
work is basedon the followingHypothesis:Research
Proposed
1.

Main objectiveof all rural marketingstrategiesis to increasesales

volume.

2.

lncreasein salesvolume indicatesthat strategiesadoptedby Co. are

fruittul.

3.

Companyvariespricesof its productstime to time henceincreasein

salesqty (in tones)is an symbolof measuringgrowthin sales.

4.

Dataof salesarecollectedfrom variouswholesaledealersareassumed

true and secondarydatahavebeenusedfor measuringsalesgrowth in
this researchwork.

5.

To know the opinion of customerabout HLL's product primary data

have been collectedand analyzedby using questionnaireof 500
people from different category and areas under random sampling
techniques.

6.

There are various factors which influence tlle customer and their
attitude as well as marketingstrategiesaboutthe market of FMCG in
rural area.

7.

Dealersare being interviewedto collect primary data about their

problemsandsuggestions.

8.

Null Hypothesis: Thereis no differencein salesbeforeandafterthe

using specialrural marketingstrategies.
Alternate Hypothesis : The increasein rural sales is due to
implementingthe new marketingstrategiesin rural belt of Meerut.

(72)

RESEARCHMETHODOLOGY
The following researchmethodology was adopted for the research
purpose.

SELECTION OF AREA
Keeping in view the time and financial limitation of researcher,the
areaof this researchwork is confinedto rural areaof districtMeerutfor the
pulposeof surveywork & analyticalstudy.Besides,the all India dataalso
have been analyzedto understandoverall rural marketing problemsprevail
in India.

SELBCTION OF SAMPLE UNITS :

To collectrelateddataandinformation500customersand5 wholesale
dealersofHLL havebeenselectedasrequiredfor this researchwork.

SELECTIONSOF'CUSTOMERS:
500 Customersfrom differentvillagesfrom differentsocial,income7
sexgroupwereselectedunderrandomsamplingfor gettingprimarydata.

PERIODOF'STUDY:
For analysisof datatime periodfrom year 2001to 2e05wastaken.

COLLECTION OF'DATA :
The present study is basedon both primary & secondarydata. The
primary data arc used to know the opinion of customersand dealers.
whereasn
secondarydataof5 yrs. Salesis usedto analyzethegrowthin sales
andto measuresuccessfulness
of ruralmarketingstrategies.
The maximumpossiblecarewastakenthat prejudicedsuppression
of
the factsmay not occurat the time of personalinterview. To achievethis

(74\

objective, interviews were assuredthat no information, data would be disclosed

to any one except the personsinvolved in this researchstudy. Two questionnaires
were fiamed & pre-testedto collect the necessaryinformation for the customers
& dealers of HLL respectively.The necessaryadjustmentswere rnade in the
light of experience,thus,joined. To make the study more anall4ical,scientific
and to arrive at a definite conclusion, the secondary data were also colleted
fiorn the sales record of dealers,fact books, newspapers,journals etc'

TABULATION, ANALYSIS AND INTERPRETATION OF

DATA AND INFORMATION:
Data collected fiom various sources were tabulated and classified as
per used to make this work systematic & scientific. Different tables were
proposedfor the purposeto concentrateon each and every aspectof the study
After tabulation of the daLa,an analysiswas made using different statistical
found out
tools. So that the factual position of the related aspectsrn'ight be
the reliable conclustonmight be drawn'

STATISTICALTOOLS APPLIED:
At the tirne of analysis the data various statistical and mathematical tools
and
such as percentage,averages,proportion, growth rate, trend etc are used
paired

't'

test is used for rneasuringnull hypothesis and effectiveness of rural

rural
rnarketing strategies, assuming that increase in sales show success of
rnarketing strategiesadopted by Hindustan Lever Limited, in Meerut

(75)

In the end of the study logical conclusionwere drawn and on the basis
of the conclusion, constructivesuggestionhave been made to acceleratethe
sales in nrral areas of Meenrt.