A STUDY ON CHALLENGES AND

OPPORTUNITIES OF RURAL MARKETEING

(THANE DIST)

SUBMITTED TO

UNIVERSITY OF MUMBAI FOR COMPLETION OF

THE DEGREE OF

BACHELOR OF MANAGEMENT STUDIES

UNDER THE FACULTY OF COMMERCE

BY

TEJAS SADANAND SONAWALE

UNDER THE GUIDANCE OF

PROF. HEMANT PATIL

RAMSHETH THAKUR COLLEGE OF COMMERCE

AND SCIENCE,

PLOT NO.1, SECTOR-33, KHARGHAR,

NAVI MUMBAI, 410210

(2018-2019)

0
 A STUDY ON CHALLENGES AND
OPPORTUNITIES OF RURAL MARKETEING

(THANE DIST)

SUBMITTED TO

UNIVERSITY OF MUMBAI FOR COMPLETION OF

THE DEGREE OF

BACHELOR OF MANAGEMENT STUDIES

UNDER THE FACULTY OF COMMERCE

BY

TEJAS SADANAND SONAWALE

UNDER THE GUIDANCE OF

PROF. HEMANT PATIL

RAMSHETH THAKUR COLLEGE OF COMMERCE

AND SCIENCE,

PLOT NO.1, SECTOR-33, KHARGHAR,

NAVI MUMBAI, 410210

(2018-2019)

1
 DECLARATION

I the undersigned Mr. SONAWALE TEJAS SADANAND here by, declare that the
work embodied in this project work title “A STUDY ON CHALLENGES AND
OPPORTUNITIES OF RURAL MARKETEING (THANE DIST) ”, forms my own
contribution to the research work carried out under the guidance of PROF. HEMANT
PATIL is a result of my own research work and has not been previously submitted to
any other university for any other degree to this or any other university.

Whenever reference has been made to previous works of others, it has been clearly
indicated as such and in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

(Name and Signature of the learner)

TEJAS SADANAND SONAWALE

Certified by

(Name and signature of the Guiding Teacher)

PROF. HEMANT PATIL

2
 CERTIFICATE

This is to certify that Mr. TEJAS SADANAND SONAWALE has worked and duly
completed her Project Work for the degree of Bachelor of Management Studies under
the Faculty of Commerce in the subject of and her project is entitled, “A STUDY ON
CHALLENGES AND OPPORTUNITIES OF RURAL MARKETING (THANE
DIST)” under my supervision.

I further certify that the entire work has been done by the learner under my guidance
and that no part of it has been submitted previously for any Degree or Diploma of any
University.

It is her own work and facts reported by her personal findings and investigations.

Name and Signature of Guiding Teacher

PROF. HEMANT PATIL

Seal of the
college

Date of submission:

3
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth
is so enormous.

I would like to acknowledgement the following as being idealistic channel and fresh
dimension in the completion of this project.

I take this opportunity to thank the University of Mumbai forgiving me chance to do

this project.

I would like to thank my Principal, Dr. S.T. Gadade for Providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Prof. Padmapriya Devnathan , for
her moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Prof.
HEMANT PATIL whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially my Parents and Peers who supported
me throughout my project.

4
 INDEX

SR. NO. NAME OF THE CONTENT PG. NO

1 ABSTRACT
6

2 INTRODUCTION
7-15

3 RESEARCH METHODOLOGY 16-25

4 LITERATURE REVIEW
26-53

5 DATA ANALYSIS AND INTERPRETATION

54-60

6 QUSTIONNAIRE
61-66

7 CONCLUSION
67-68

8 BIBLIOGRAPHY
69-70

5
Abstract

The idea of Rural Marketing in Thane (Dist.) Economy has always played a significant
role in the lives of people. The rural market in India brings in greater revenues in the
country, as the rural regions comprise of the maximum consumers in this country.
Thane (Dist) rural market produces almost more than half of the country’s income.
Thane (Dist) Rural Marketing has always been difficult to predict and consist of special
uniqueness. However, many companies were efficacious in entering the rural markets.
They bagged the market with its proper understanding and innovative marketing ideas.
It is very challenging for the companies to overlook the opportunities offered by the
rural markets. As two – third of Thane (Dist) population exists in rural areas, the market
is much unanticipated for the companies to be effective in rural markets. They have to
overcome few challenges such as pricing and distribution. The present paper aims to
know the status of rural market in India, the identification of different rural marketing
strategies, to highlight the opportunities and challenges of rural marketing in India. The
main aim of this study is to observe the potentiality of Thane (Dist) rural markets and
finding out several problems being faced by rural markets.

6
CHAPTER 1:
INTRODUCTION

7
INTRODUCTION:
In a various market like Maharashtra, out of the total of 1, 11, 00,000
populations in Thane (Dist.), the size of rural populations is 2,545,470 which
constituted males and females are 1,300,136 and 1,245,334 respectively.
Populations as census survey of 2011, the urban-rural divide is quite significant.
The demand and living model of Thane (Dist.) rural habitants are different and
varies considerably. The cultural scope is also varying. These factors positively
make an impact on the need and behavior of rural consumers. With its huge size
and common selection of consumers, marketers have been finding it hard to
understand and enter into rural areas, and finding difficulties to understand the
norms of enter into the rural market. Rural Markets separate from the other types
of markets like stock market, commodity markets or Labor economic semi urban
market. The rural market has been defined from different perspectives. According
to survey of Thane (Dist) 2018, “Revenue villages with clear surveyed margins;
where the concentration of population is not more than 420 people per sq. meter,
with at least 85% of the male population occupied in agricultural and related
activities and which does not have a municipal corporation and board.” According
to Insurance Regulatory Development Authority (IRDA) has explained on
different note, “A villages with a population of less than 54,000, with 85% of male
population engaged in agricultural actions’ sector recognized “Rural” as place with
a population less than or equal to 20,000 peoples. FMCG refers to consumer non-
durable goods compulsory for daily or regular use. They move fastly at the sales
answer. Normally consumer spends less time and hard work in buying these goods.
They are relatively high volume and low value products. The FMCG sector
consists mainly of sub-segment viz., personal care, oral care, and households’
products.

 Thane (Dist.) rural market is gigantic in size, about 1.11 million consumers and
it is spread and common over 1602 villages and these villages are not
homogeneous in size.

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 The rural consumers purchasing power and per capita being low, club with
high sense of savings, low literacy rate, follow-on in low standard of living. In
addition to this, the traditions, holy force, cultural values and deep-rooted
rational are the hindering factors for an upwards social mobility. This apart,
the distribution of income is highly skewed, since the landholding pattern,
which is the basic asset, itself is out of true. Thus, rural population presents a
highly various market.

 The purchasing powers of the people in the rural areas mainly depend upon
profitable agricultural surplus and rural-urban trade. Increase in marketable surplus
of foodstuff grains leads to the consumption of manufactured consumer goods. To
larger extent Thane (Dist.) agriculture depends on rainfall and therefore, rainfall
indirectly influences the rural demand for consumer goods.

 The government spending with different schemes /planning on irrigation, flood

control, infrastructure development anti-poverty schemes, and fertilizers‟ subsidy
directly generate income and lead to the consumption of manufactured items and
improved the condition of the rural masses. The buying behavior of rural consumer
is different from urban consumer. The rural consumer is more of an adopter than an
innovator.

9
 PROFILE RURAL CONSUMER:

 Literacy: 20 % of rural Thane (Dist) population is literate and people are getting added
to this list year after year. There are still some villages which are underdeveloped.
Maximum education is primary school or in some cases high school. To this group the
marketing promotional strategy to be adopted is demonstration of product features and
advantages. Print media and posters do not make any impact.

 Income: An average rural consumer has a much lower income than his urban
counterpart. The disposable income has increased in the recent years to considerable
extent. In spite of this, the common traits of rural consumers are low purchasing power,
low standard of living, low per capita income and low economic and social positions.

 Density: Rural population is scattered across 1602 villages. This implies that rural
demand is scattered and urban demand is concentrated.

 Influencers: There are many reference groups in a village. These include teacher,
doctor, panchayat members, health workers, bank manager and co-operative board
workers. These influencers need to be kept in mind when a marketer decides on rural
marketing.

 Occupation: The main occupation is agriculture. The size and ownership of land
determines the basis for differentiation and consumption patterns.

 Culture: Rural consumers are traditional in their outlook. They associate faster with
messages that match their cultural behavior.

 Language: English is not a language of rural Thane (Dist). Hence a marketer should
aim for communication in the local language

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 CLASSIFICATION OF RURAL CONSUMERS:

The rural consumers are classified into the following groups based on their economic
status:

 The Affluent Group: They are cash rich farmers and a very few in number. They
have affordability but 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
group.

 The Middle Class: This is one of the largest segments for manufactured goods and 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 the grants from 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.

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CHANGING PROFILE OF RURAL CONSUMERS:

Rural consumers as studied are dependent on agriculture and were not very
literate about products and services available. This scenario is slowly changing due to
increase in literacy and disposable income.

Not long ago, rural consumers went to a nearby city to buy ‘branded products
and services". Only select household consumed branded goods, be it tea or jeans.
Earlier, big companies flocked to rural markets to establish their brands.

Rural markets today are critical for every marketer - be it for a branded shampoo
or a television. Earlier marketers thought of van campaigns, cinema commercials and a
few wall paintings to entice rural folks under their folds. Today a customer in a rural
area is quite literate about myriad products that are on offer in the market place, thanks
to television. Many companies are foraying into the rural markets and educating them
on newer products and services.

The rural youth today are playing a far more significant role in influencing the purchase
decisions. They travel frequently out in the village and are the drivers of purchase
decisions regarding radios, television (black and white as well as color), automobiles
and other goods. They may not be the end customers but often are the people who
influence the purchase of high value products and they decide on which brands to
choose.

Penetration levels of consumer durables in the rural sector have risen

dramatically in the last decade or so. Even the rural woman is coming out of the closet.
She is exercising her choice in selecting categories - the choice of brands may still be
with the males of the household.

The prerogative of making the final purchase decisions stills rests with the chief
male. In other words, the “chief wage earner” syndrome still applies in the rural
markets.

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INFLUENCING THE RURAL CONSUMERS:

The biggest challenge today is to develop a scalable model of influencing the

rural consumers’ mind over a large period of time and keep it going. This needs to be
achieved in a limited or a reasonable budget. That’s where the marketers who really
understand rural markets and advertising agencies can make a difference and develop
a scalable media/communication model.

The mass media has the drawback that the time gap between the point of
exposure and the time of purchase is long. Hence it is difficult to use it in rural
communication.

The most important element in rural communications is that the marketer has to
integrate 3 things in communication.

1. Exposure of a message

2. Trial or demonstration

3. Final sale.

There is minimal brand loyalty in rural consumers. This is mainly due to a bigger
problem of brand recognition. There are a lot of looks alike in the rural market. The
challenge is to create communication that would help the rural consumer in recognizing
brands, logos, visuals, colors, etc., so that he or she actually buys the actual brand and
not something else.

13
SWOT ANALYSIS:

A situation analysis that examines external factors and maternal conditions of an

organization to identify strength, weakness, opportunities and threats.

A. STRENGTHS:
- Distinctive competence
- Strong financial resources
- Cost of price leader
- Strong brand name
- Innovative skills
- Skilled human resources
- Loyal customers
- Superior technological know how

B. WEAKNESSES:
- No clear direction
- Weak market-share
- Weak distribution network
- Weak market silage
- Poor marketing competency
- Lack of distinct competency
- Absolute plant and facilities
- Poor track record of strategic implementation

C. OPPORTUNITIES:
- Growth in new market
- New product development
- Quality improvement
- Expand product line
- Vertical integration
- Emerging customer needs

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- Economic advantage
- Related product diversification
- Adverse demographic change

D. THREATS:
- Entry of low cost
- Competitors
- Slow market growth
- Substitute products
- Change in technology
- Adverse legislation
- Changing buyer’s needs
- Strong customer pressure

15
CHAPTER 2:
RESEARCH METHODOLOGY

16
Research Methodology

This study is based upon both primary and secondary data. The adoption of the
Descriptive Research Design would be appropriate and effective in the present study
because an attempt was made to know opportunities and challenges are found in rural

market by using secondary Data.

Data Collection:

The primary data gathered through semi structured interview of rural people and
hundred consumers were interviewed/ interacted.

Secondary Data:

Data is collected from various Published & unpublished Journals, Articles available in
various websites, popular Journals, Text Books etc.

The literature review indicated that there is lacking theory and understanding of Thane
(Dist) Rural Marketing within the context of particular phenomena. A general research
strategy needs to be explored by finding out opportunities and challenges faced by the
marketers to enter into the rural market. The information for this purpose of the present
study has been obtain by interviewing the respondent through structured and survey,
keeping in view the time and availability of the respondents, group interview and
interviews at the individual level have also been conducted. The observation methods
have also been used wherever conditions are favorable for the same the reports of
certain government agencies:

1. Survey of Thane (Dist)

2. National council of functional economic research
3. Villages example survey
4. District statistical information
5. Central numerical organization
6. Rural Marketing books/Journals/Magazines
7. Reserve Bank of Thane (Dist) information
8. Planning charge Annual/ Five- Year Plan Reports

17
9. The respondents have been chosen randomly and requested to grant
interviews.

18
CONCEPT, SCOPE & OBJECTIVE

Definition of Rural Market and Rural Marketing:

Thane (Dist) is a land of diversity and about 70% of the Thane (Dist)
population lives in villages. These villages contribute in the economic development of
the nation through the production of food grains, vegetables, fruits, etc. Export of these
agricultural commodities result in the generation of capital and earnings of foreign
exchange.

There are 1602 villages in Thane (Dist). 25% of all villages account for 65% of
the total rural population by simply contacting handful villages – which shows the huge
potential of this market.

Thane (Dist) rural market has a vast size and demand base. Before going into
more aspects on rural marketing, let us understand how rural is defined.

The Census defines urban Thane (Dist) as - "All the places that fall
within the administrative limits of a municipal corporation, municipality, cantonment
board etc. or have a population of at least 5,000 and have at least 75 per cent male
working population in outside the primary sector and have a population density of at
least 400 per square kilometer. Rural Thane (Dist), on the other hand, comprises all
places that are not urban!"

The government of Thane (Dist) only defines a non-urban market. An urban

market is the one which has a population density of 400 people per sq/Km. 7% of its
population has to be involved in non-agricultural activities and there is a municipal
body. If we go by statistics, roughly around 70% of the Thane (Dist.) n population lives
in the rural areas. That’s almost 12% of the world population.
To expand the market by tapping the countryside, more and more MNCs are
foraying into Thane (Dist)'s rural markets. Among those that have made some headway

19
are Hindustan Lever, Coca-Cola, LG Electronics, Britannia, Standard Life, Philips,
Colgate Palmolive and the foreign-invested telecom companies.

20
OBJECTIVES:

THE AIMS:

 To study the present scenario of rural market in Thane (Dist.).

 To identify the major opportunities available in the rural market in Thane (Dist.).
 To study the major challenges faced by marketer in Thane (Dist) rural market.
 To find out the problems associated with rural market.
 To highlight the Challenges and Opportunities of Rural Marketing in
 To study the problems of rural marketing in Thane (Dist)
 To offer suggestions to overcome the problems

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RURAL MARKETING:

Rural marketing involves the process of developing, pricing, promoting, distributing

rural specific product and a service leading to exchange between rural and urban market
which satisfies consumer demand and also achieves organizational objectives.

It is a two-way marketing process wherein the transactions can be:

1. Urban to Rural: It involves the selling of products and services by urban

marketers in rural areas. These include: Pesticides, FMCG Products, Consumer
durables, etc.

2. Rural to Urban: Here, a rural producer (involved in agriculture) sells his produce
in urban market. This may not be direct. There generally are middlemen, agencies,
government co-operatives, etc. who sell fruits, vegetables, grains, pulses and others.

3. Rural to rural: These include selling of agricultural tools, cattle, carts and others
to another village in its proximity.

22
SCOPE:

1. Large population:
As per the latest 2011 Census conducted by Government of Thane (Dist), around 9%)
people reside in rural areas and it is scattered over a wide range of geographic area.
That is 12% of the world population which is not yet fully utilized. The rate of increase
in rural population is also greater than that of urban population. The rural population is
scattered in over 6 lakh’s villages. Contrast this with rural population numbers of China,
a comparable market for Thane (Dist), one can find that the rural population decreased
by a huge number of people in the same time period of 2001 to 2011. Thereby Thane
(Dist) stands No. position in terms of rural population in the world. Rural market in
Thane (Dist) thus holds a big promise for the marketers.

2. Higher purchasing capacity:

Purchasing power of the rural people is on rise. Marketers have realized the potential
of rural markets, and thus are expanding their operations in rural Thane (Dist). In
recent years, rural markets have acquired significance in countries like China and
Thane (Dist), as the overall growth of the economy has resulted into substantial
increase in purchasing power of rural communities.

3. Market growth:

As per the survey made by NCAER Research the growth rate of FMCG durables market
is higher in rural areas. The rural market share is more than 50% for products like body
talcum powder, toilet soaps cooking oil, hair oil etc. Demand for traditional products
such as bicycles, mopeds and agricultural inputs; branded products such as toothpaste,
tea, soaps and consumer durables such as refrigerators, TV and washing machines has
also grown over the years. The rural market is growing steadily over the years.

4. Development of infrastructure:

There is development of infrastructure facilities such as construction of roads and

transportation, communication network, rural electrification and public service projects
in rural Thane (Dist), which has increased the scope of rural marketing

23
5. Rising Rural Prosperity:

Average income level has improved due to modern farming practices, contract farming,
industrialization, migration to urban areas and remittance of money by family members
settled abroad. There has been an overall increase in economic activities because during
the planned rural development heavy outlay of resources on irrigation, fertilizers,
agricultural equipment's and agro processing industry has been made. Saving habits in
rural people also has increased. This too contributes rising rural prosperity.

6. Market size and Potential:

Rural market is largely unexploited by marketers. It is impacted by HUL that out of

6, 00,000 plus villages, only 1, 00,000 have been tapped so far. The size of India’s rural
market is stated about 12.2 percent of the world's consumers live in. Rural Thane
(Dist.). In Thane (Dist), rural housel holds form about 72 percent of the total so
households and this constitutes a huge market by any standard.

7. Growth in consumption:

Consumption patterns in these rural areas are gradually changing to increasingly

resemble the consumption patterns of urban areas. Some of Thane ( Dist)'s largest
consumer companies serve one-third of their consumers from rural Thane ( Dist), sit
Owing to a favourable changing consumption trend as well as the potential size of to s
the market, rural Thane ( Dist) provides a large and attractive investment opportunity
for private companies.

8. Change In Life Style And Demands: Life style of rural consumer changed
considerably. There has been increase in demand for durables and non-durables like
table fans, radios, mopeds, soaps, etc. by rural consumer. This provides a ready market
for the producers. Demand pattern of rural customer is fast changing due to increasing
in income and credit facilities offered by banks like kisan credit card'. Rural market is
expanding day after day thus providing a wider scope for marketers.

24
9. Life cycle advantage: The products which have attained the maturity stage in urban
market, is in growth stage in rural market. E.g. popular soaps, skin care m, talcum
powder, etc.

25
CHAPTER3:

REVIEW OF LITERATURE

26
REVIEW OF LITERATURE:

Marketing can be defined as the process of identifying, anticipating and knowing

customer needs, and organizing all the resources of the company to satisfy them.
Satisfying the customer‟s need is primary condition of marketing and essential for
existence of any organization. In order to achieve marketing goals, knowledge of
consumer behavior is must. The consumer‟s behavior comprises the acts, processes and
social relationships exhibited by individuals, groups and organizations in searching,
obtainment, use of, and consequent experience with products and services.

A wide array of problems hinders marketers in approaching rural areas with confidence.
The lack of fair-weather roads, widely dispersed villages, low density of population,
lack of bank and credit facilities, multiple tiers, higher costs and administrative
problems, and lack of retailers are the problems in rural distribution. Intelligent way of
approaching rural areas is required. The emerging distribution approaches include:
Cooperative societies, petrol bunks, agricultural input dealers, NGOs, etc. Latest
approaches include the direct to home selling methods: network marketing and internet
marketing.

27
 FEATURES OF RURAL MARKETS THANE (DIST):

 Large, Diverse and Scattered Market: Rural market in Thane (Dist) is large, and
scattered into a number of regions. There may be a smaller number of shops available
to market products.

 Major Income of Rural consumers is from Agriculture: Rural Prosperity is tied with
agriculture prosperity. In the event of a crop failure, the income of the rural masses is
directly affected.

 Standard of Living and rising disposable income of the rural customers: It is

known that majority of the rural population lives below poverty line and has low
literacy rate, low per capital income, societal backwardness, low savings, etc. But the
new tax structure, good monsoon, government regulation on pricing has created
disposable incomes. Today the rural customer spends money to get value and is aware
of the happening around him.

 Rising literacy levels: It is documented that approximately 45% of rural Thane

(Dist)ns are literate. Hence awareness has increases and the farmers are well-informed
about the world around them. They are also educating themselves on the new
technology around them and aspiring for a better lifestyle.

 Diverse Socioeconomic background: Due to dispersion of geographical areas and

uneven land fertility, rural people have disparate socioeconomic background, which
ultimately affects the rural market.

 Infrastructure Facilities: The infrastructure facilities like cemented roads,

warehouses, communication system, and financial facilities are inadequate in rural
areas. Hence physical distribution is a challenge to marketers who have found
innovative ways to market their products.

 Traditional Outlook; A Villages develop slowly and have traditional outlook. Change is a
continuous process but most rural people accept change gradually. This is gradually changing
due to literacy especially in the youth who have begun to change the outlook in the villages.

28
 ROADBLOCKS OF RURAL MARKETS:

There are several roadblocks that make it difficult to progress in the rural
market. Marketers encounter a number of problems like dealing with physical
distribution, logistics, proper and effective deployment of sales force and effective
marketing communication when they enter rural markets. The major problems are listed
below.

1. Standard of living: The number of people below the poverty line is more in rural
markets. Thus, the market is also underdeveloped and marketing strategies have to be
different from those used in urban marketing.
2. Low literacy levels: The low literacy levels in rural areas leads to a problem of
communication. Print media has less utility compared to the other media of
communication.
3. Low per capita income: Agriculture is the main source of income and hence spending
capacity depends upon the agriculture produce. Demand may not be stable or regular.
4. Transportation and warehousing: Transportation is one of the biggest challenges in
rural markets. As far as road transportation is concerned, about 50% of Thane (Dist)
villages are connected by roads. However, the rest of the rural markets do not even have
a proper road linkage which makes physical distribution a tough task.
5. Ineffective distribution channels: The distribution chain is not very well organized
and requires a large number of intermediaries, which in turn increases the cost and
creates administrative problems. Due to lack of proper infrastructure, manufacturers are
reluctant to open outlets in these areas. They are mainly dependent on dealers, who are
not easily available for rural areas. This is a challenge to the marketers.
6. Many languages and diversity in culture: Factors like cultural congruence, different
behavior and language of the respective areas make it difficult to handle the customers.
Traits among the sales force are required to match the various requirements of these
specific areas.
7. Low and consumers: behavior in these areas is traditional, which may be a problem
for effective communication.
8. Spurious brands: Cost is an important factor that determines purchasing decision in

29
 rural areas. A lot of spurious brands or look-alikes are available, providing a low-cost
option to the rural customer. Many a time the rural customer may not be aware of the
difference due to illiteracy.
9. Seasonal demand: Demand may be seasonal due to dependency on agricultural
income. Harvest season might see an increase in disposable income and hence more
purchasing power.
10. Dispersed markets: Rural population is highly dispersed and requires a lot of
marketing efforts in terms of distribution and communication.

30
CHALLENGES IN RURAL MARKETS:

Rural marketing has already arrived in the world of business and is one of the single
largest segments of activity. Rural markets are most heterogeneous in nature. Unlike
their urban counterparts, where the demand of goods and services are highly
concentrated in nature, rural markets tend to be spread out across the country. It's the
rural segment of market that contributes more profit than its urban counterpart.
Consequently, though many rural markets look good on paper, in reality they are quite
expensive to serve. Hence it is very difficult for the marketers to provide service to each
and every rural mar

1) Heterogeneity rural consumers: The vast rural popular with heterogeneous

markets spread across in different states poses great difficulty for the marketers. Not
only this, the population density is greatly varied in rural regions. Therefore, a densely
populated country provides ample opportunity for marketing a variety of latest goods
and services on one hand whereas on the other, it poses a great challenge as to what are
the kinds of goods and services to be served. On the top of it, the heterogeneity of the
population creates problem of segmentation. So, it becomes very difficult for marketer
to serve the same product with similar price and promotion combination to different
people.

2) Difficulty in distribution: Even though, there is a large chunk of consumers living

in these remote areas waiting to get served but still most of the times, the efforts to serve
them in a proper manner proves futile. An effective distribution system requires village-
level shopkeeper, Mandal/ Taluka- level wholesaler or preferred dealer, distributor or
stockiest at district level and company-owned depot or consignment distribution at state
level. The presence of too many tiers in the distribution system increases the cost of
distribution.

3) Inadequate infrastructure facilities: (road, rail, etc.) Transportation is essential

for movement of products from urban production centres to remote villages. Hence, it
becomes a vital point for consideration in formulating strategies for rural marketing.
The infrastructure is so poor that many a times, even access to remote areas possess a

31
great challenge. Almost half of the total villages in Thane (Dist), for example, are not
connected by road at all.

4) Low literacy Level: One can easily ascertain the fact that most of the people living
the government of Thane (Dist) of building roads is well appreciated but then the task
is quiet. Most of these villages are connected only by kuccha roads. And these roads
create a huge problem during monsoon season. Not only this, many rural areas are not
connected by rail transport. So, serving the rural consumers located in these regions
proves to be formidable task for the marketers.

Rural parts of Thane (Dist) do not have proper access to education, so the literacy
level in these regions is very low. There are not enough opportunities for education in
rural areas. The literacy level is as low (36%) when compared to all- Thane (Dist)
average of 52%. Again, this is also one of the important areas to be pondered upon by
the marketers. To create awareness among the people of rural regions regarding the
development of new products by the marketers is quite a big problem. Not only this,
the villagers are unaware of the MNC ‘s and the brands they are selling. On the top of
it, these marketers also have to consider the different languages spoken by the people
living in different parts

5) Seasonal Demand of products: Demand for goods in rural markets depends upon
agricultural situation, as agriculture is the main source of income in most of the rural
areas. Agriculture to a large extent depends upon monsoon and, therefore, the demand
or buying capacity is not stable or regular. This deters the companies from having one
single strategy for rural markets year-round.

6) Inadequate Media Coverage: The reach of formal media is low in rural households.
Media have lots of problem in rural areas. Television is a good source to communicate
the message to rural people. But due to non-availability of power as well as television
sets, majority of rural population cannot get the benefits of various media. So there is a
possibility that the rural customer remains ignorant of the new product being launched
in the market. Moreover, the places where the electricity is yet to reach, adds to the
discomfort of the marketers. Therefore, we can say that the reach of media is very
limited in rural areas.

7) Packaging and Pricing: The problem of pricing and packaging for rural customers
has to be taken into consideration. As we are well aware of the fact that there exists

32
very large difference in income levels between the rural customers and their urban
counterparts, so the marketers have to look for a possible price reduction in majority of
the products.

8) Language Barrier: As the rural market is heterogeneous, so is the culture of these

customers. The languages spoken by them are different. Hence it becomes very difficult
for the marketers to advertise their products in one universally spoken language. If these
marketers go for advertising their products in the regional language, it adds to the cost
of product, which may prove detrimental for rural marketing.

9) Transportation Problems: Transportation is essential for movement of products

from urban production centres to remote villages. In rural India transportation facilities
are quite poor. Nearly 80 percentages of villages in the country are not connected by
well-constructed roads. Many parts of India have kuccha roads. Due to poor
transportation facilities it is not possible for a marketer to access the rural market.

10) Cultural Factors: Culture is a system of shared values, beliefs and perceptions that
influence the behaviour of consumers. There are different groups based on religion,
caste, occupation, income, age, education and politics and each group exerts influence
on the behaviour of people in villages.

11) Buying Decisions: Rural consumers are cautious in buying products and their
decisions are slow and delayed. They like to give a trial and only after being personally
satisfied, do they buy the product. Moreover, the rural people possess a traditional and
conservative approach in buying new products. Life in rural areas is still governed by
customs and traditions and people do not easily adapt new practices. For example, even
rich and educated class of farmers does not wear jeans or branded shoes.

12) Skilled local talent is hard to find in rural regions: companies also find that their
trained, seasoned staff members are very reluctant to relocate to rural areas. This proves
to be one of the major challenges. Moreover, hiring local staff does not prove to be
futile as they are not having relevant qualification and experience. If at all they are
hired, the company has to spend a lot for giving them proper training. In

13) Warehousing: In the rural areas, there are no facilities for public as well as private
warehousing, unlike in urban areas. Therefore, marketers face a huge problem of
storage of their goods. Lack of proper distribution channel adds to their woes.

33
purchasing power and lack of bank finance – As the income of rural customer is very
less as compare to their counterparts in the urban areas, there arise great difficulty in
purchasing expensive products like Television, Bikes, Refrigerator, DVD Players, etc
for the rural customers. Adding to their grievances, the banks do not support them by
providing them.

14) Sale of fake and spurious products: It is a big challenge for the marketer.
Generally, in rural market, imitation of popular products is available in large number
and at low prices like- Magic instead of Maggi. The retailer pushes imitation products
(which are priced less and offer better earnings to the retailer) to the illiterate and less
aware rural consumer. Actually, with the increase in IT penetration in rural market, the
awareness levels of brands is quite high, but the original brands of many product
categories are not available at a large number of rural retail outlets. So, all this poses a
great challenge in front of the rural marketer to deal with the situation.

15)Banking and credit problems: The rural consumers are not so financially strong
that they can buy products of high value in cash and also they possess cash only after
harvesting of crops but need products during the whole year. So, they require credit
facilities from the marketer and this credit is mostly risky. Also, the retailers in the rural
areas are not financially strong so they require banking and credit facilities from the
manufacturers. So, this poses challenge for the rural marketer who wants to tap the rural
market.

34
OPPORTUNITIES IN RURAL MARKETS:

Whilst on one hand, there are many challenges in rural marketing, but certainly there
also exists infinite opportunities. The rural market is fascinating a challenging at the
same time. The marketers have to find out new ways of dealing with the rural
customers. As already mentioned, the urban markets are fully saturated, so the easiest
and the simplest option available with the marketer is to look towards the rural
prospects. These rural people are eagerly waiting to be served. Here are some ideas of
the points which the marketers could utilize for marketing their products in rural areas.

1) Huge untapped Potential – As more than 70% of the total Thane (Dist) ‘s
population dwells in rural areas, the huge population itself speaks of its potential. The
rural market offers a great chance for different branded goods as well as services for
large number of customers. Penetration levels for many products are low in rural areas.
The market has been growing at 3-4% per annum adding more than one million new
consumers every year.

2) Impact of globalization - Globalization had a great impact on target groups like

farmers, youth and women. Farmers, today 'keep in touch' with the latest information
and maximize both ends. On youth its impact is on knowledge and information and
while on women it still depends on the socio-economic aspect. The marketers who
understand the rural consumer and fine tune their strategy is sure to reap benefits.

3) Effectiveness of communication - An important tool to reach out to the rural

audience is through effective communication. The rural audience has matured enough
to understand the communication developed for the urban markets, especially with
reference to FMCG products. Television has been a major effective communication
system.

4) Rising rural prosperity and purchasing power - The agricultural development

programs of the government have helped to increase income in the agricultural sector.
These in turn have created greater purchasing power in rural markets. Moreover, today
rural incomes generate not only from agricultural section but also from other sections.
There is a sizeable salaried class in rural areas. Rural demand in FMCG products,

35
consumer durables, automobile and retail are growing at a faster pace than anticipated
due to rise in its consumption patterns.

5) Change in rural consumer behaviour – With the economic development of rural

areas, disposable income of rural people has gone up. Moreover, with the presence of
internet and direct-to-home television connectivity in rural areas, these people have
started gaining knowledge about the different brands that are available in urban
markets. They are slowly realizing the importance of established brands and have
started purchasing these brands. Rural people are now purchasing branded soaps,
toothpowder, paste, tobacco products, radio, TV, bicycles, motorcycles, cooking
utensils, wrist watch, razor blades, detergents and so on.

6) Improvement in infrastructure and rural connectivity - The governments too

have realized the importance of huge untapped potential and they are now on the path
of making huge investments in rural infrastructure. In Thane (Dist), the eleventh five-
year plan government has specific focus on the inclusive growth of the country.

7) I.T. penetration in rural Thane (Dist) - Today's rural children and youth grow up
in an environment where they have 'information access' to education opportunities,
exam results, career counselling, job opportunities, government schemes and services,
health and legal services, worldwide news and information, land records, mandi prices,
weather forecasts, bank loans, livelihood options. If television had changed the
language of brand communication in rural Thane (Dist), affordable internet
connectivity through various types of communication hubs had a great impact on the
minds of the rural youth.

8) Favourable government policies – As a part of the process of planned economic

development, the government has been making concerted efforts towards rural
development. The massive investment in the rural Thane (Dist) has generated new
employment, new income and new purchasing power. In the recent years, as a part of
new farming policies, high support prices are offered for agricultural products. Various
measures like tax exemption in rural areas, subsidy, concessions, incentives,
assistances, literacy drive in rural areas has bought in rapid development of rural
markets.

36
9) 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. The credit facilities extended by public sector banks through rural financing
schemes like Kisaan Credit Cards help the farmers to buy seeds, fertilizers and
consumer durable goods on instalments. The introduction of the micro finance proved
to be of great help to the people living in hinterlands.

10) Intense Competition in urban markets - Intensified competition in urban markets

is leading to increase in costs and thereby reducing market share. The rural markets are
therefore becoming increasingly attractive in comparison to urban markets. The
automobile and FMCG market bring this out clearly. Hero Honda motorcycles, Parle,
Britannia, Brooke Bond, Maruti Cars, HLL products or Wipro products find ready
acceptance in rural markets as compared to urban markets where there is a proliferation
of brands.

11) Increase in population: There has been increase in the rural population over years.
This increase in population enhances the potential market for the marketers and tempts
them to make more innovative products so as to tap this increasing population and make
more money.

12) Competition in urban areas: The heat of competition in the urban market actually
serves as the strong driver behind the growing interest of corporate in the rural market.
Rural market acts as a boon to those who cannot keep up with the urban competition.
This market provides opportunities to the urban marketer.

37
STRATEGIES FOR RURAL MARKETING

The past practices of treating rural markets as support to the urban market are not
correct, since rural markets have their own independent existence, and if cultivated well
could turn into a generator of profit for the marketers. But the rural markets can be
exploited by realizing them, rather than treating them as convenient extensions of the
urban market.

A. Marketing Strategy:

Marketers need to understand the psychology of the rural consumers and then act
accordingly. Rural marketing involves more extensive personal selling efforts
compared to urban marketing. Firms should refrain from designing goods for the urban
markets and subsequently pushing them in the rural areas. To effectively utilize the
rural market, a brand must associate it with the same things the rural folks do. This can
be done by utilizing the various rural media to reach them in their own language and in
large numbers so that the brand can be associated with the varied rituals, celebrations,
festivals etc.

B. Distribution Strategy:

One of the ways could be using company delivery van which can serve two purposes -
it can take the products to the customers in every nook and corner of the market, and it
also enables the firm to establish direct contact with them, and thereby facilitate sales
promotion. Annual fests organized are quite popular and provide a very good platform
for distribution because people visit them to make several purchases. According to the
Indian Market Research Bureau, around 8000 such fests are held in rural India every
year. Rural markets have the practice of fixing specific days in a week as Market Days
called “Haats” when exchange of goods and services are carried out. This is another
potential low-cost distribution channel available to the marketers. Also, every region
consisting of several villages is generally served by one satellite town termed as
“Mandis” where people prefer to go to buy their durable commodities. If marketing
managers use these venues, they will easily be able to cover a large section of the rural
population.

38
C. Promotional Strategy:
Marketers must be very careful while choosing the mediums to be used for
communication. Only 16% of the rural population has access to a vernacular
newspaper. So, the audio visuals must be planned to convey a right message to the rural
people. The rich, traditional media forms like folk dances, puppet shows, etc., with
which the rural consumers are familiar and comfortable, can be used for high impact
product campaigns. Radio is also very popular source of information and
Entertainment, adds on radio can also be a helpful tool for marketers.

39
RURAL MARKETING ENVIRONMENT:

An environment is that which surrounds an organization. It is sum total of external

factors and made up of tangible and intangible factors, both controllable and
uncontrollable. Rural marketing is basically focused marketing activity of an
organization. The environment includes threats and opportunities in the rural market.
The Rural marketing environment is complex and is changing continuously. The
marketing organization should foresee and adopt strategies to change in environment.
Rural marketing environment changes will be in the area of:

a) Social changes

b) Economic changes

c) Ethical changes

d) Political changes

e) Physical changes

f) Technological changes

1.SOCIAL CHANGES: - The social factor consists of three sub-factors,

1) Sociological factor: -

Consumer society or the community is an important consideration while devising rural

marketing strategy. The rural consumer life style is largely influenced by the social
setup. The sociological changes influence rural customer habits, taste, and lifestyles.

2) Anthropological factors: -

The cultures, subcultures and living patterns influence advertising, sales promotion,
selling and packing strategies of the marketing organizations. The rural consumers
living in east Thane (Dist) have different taste whereas those living in western Thane
(Dist) have totally different.

3) Psychological factors: -

40
Consumer behavior, attitudes, personality and mental make ups are unique. The study
of rural consumer behavior is vital to evolve marketing mix.

2.ECONOMIC FACTORS: -

1) Competition: -

A good and healthy competition brings in good and overall improvement in economic
activities. It also brings good quality, good quantity and price. Considering rural
marketing, there exist less or minimal competition. The presence of local brands in the
rural markets has great impact on competition.

2) Consumers: -

Rural lifestyles and behavioral trends are increasingly coming to resemble urban
patterns, in both form and variety. Like urban consumers, the rural middle class is
buying more fairness creams, whereas many of the rural poor are keen to invest in a
mobile phone connection. The consumer

today is quite knowledgeable. The rural folks are even choosy than their urban counter
parts because they are ready to spend only when they are assured of getting value for
their money. Therefore, their progress and well-being should be the aim of any
economic activity.

3) Price: -

Pricing is a delicate issue where it should be market friendly, not too high or too little.
The marketer has to keep in mind to get descent returns on investment and effects of
producers and marketers. But pricing becomes more important when the target segment
is rural population. Even the marketers have to introduce smaller packs for their
products to these rural population owing to their low purchasing power.

3.ETHICAL FORCES: -

Business minus ethical values brings degeneration. In the long run it creates several
problems. Sub- standardization, exploitation and falsification are main ethical values in
such organization. The marketers have to take proper care while designing their
products for rural segments as the rural people are largely uneducated and are quite
sensitive. A slight unethical practice may result in huge boycott of their products.

41
4.POLITICAL FORCES: -

The government policy towards trade and commerce, internal taxation and preferential
treatments, have great influence on the rural marketing strategies. The marketing
environment has to meet the political frame work in which a government is made to
work. Thanks to rural supportive initiatives by Thane (Dist) government, more and
more companies are making their presence felt in these rural areas.

5. PHYSICAL FORCES: -

The infrastructure availability for movement and storage of goods play an important
role in the physical distribution of goods and reaching the rural consumers. Efficient
and cheaper logistics helps the market in a big way. But there is dearth of infrastructure
facilities with respect to rural areas of Thane (Dist). The marketer has to bear the brunt
of this dearth and still have to promote their products in those areas so as to increase
their sales. This in turn is possible only when the remote places become easily
accessible.

6.TECHNOLOGICAL FORCES: -

The fast-changing science and technology gives a cutting edge to the marketing of
products. The changes warrant changes in marketing inputs and strategies. Faster and
efficient communication and transport systems have speeded up marketer. The capital
is made to work faster and harder.

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SOLUTIONS TO PROBLEMS OF RURAL MARKETS:
To solve the problems of rural markets in Thane (Dist) the following suggestions
can be used by marketers.

Problem of rural Marketing:

1. Underdeveloped Societies and Populace: Majority of Thane (Dist)n rural societies

are still underdeveloped they follow old customs, traditions and beliefs. The modern
science and technology have made a less impact on their lives, the people in the rural
areas are rigid and not ready to adopt the change in any spears. This is a major reason
why scientific innovations are not entering the rural segments and they are not getting
the expected outcomes.

2. Inadequate Infrastructure Facilities: In our countries rural areas have poor

infrastructure facilities in the areas of ware housing, transportation, roads, market yards,
etc., due to which the products produced in the rural areas are not getting their right
price and recognition. Poor infrastructure facilities have created a great imbalance in
meeting the demand and supply factors

3. Poor Communication Facilities: Rural Thane (Dist) have poor communication

facilities. Only telephone and telegram services have been utilized and reached so far,
the rural areas. Print media and visual media reaches only 20% of rural Thane (Dist)s
the modern communication services like fax, in ternate and allied services are much far
away from majority of rural Thane (Dist). mobile phone and smart phones have yet to
reach rural masses.

4. Underdeveloped Banking Facilities: Banking facilities and services in the rural

areas are not up to the mark they are not meeting the requirement of rural masses.
Further, only public sector banks are extending their banking services in the rural areas,
because of this rural merchant are not getting adequate loans, mortgage, insurance and
other services form banking sector.

5. Uneven Distribution of Villages: Thane (Dist) is a vast country approximately

ranking form 2214 Km from North to South and 1933 Km from East to West. Rural
market consists of 1602 villages as per 2011 censes, some villages are large and some
of them are small and remote. Further, each village will have different culture,

43
agricultural pattern followed by different climatic and geographical conditions.

5. Uneven Distribution of Villages: The per capita income of a rural resident is low as
a whole the spending and purchasing capacity is also low. This is the case with majority
of the people in rural Thane (Dist), as a result, the marketing activity will come down
leading to downfall of the business and marketing activities in this area.

7. Imbalance between Production and Demand: One of the major challenges in for
marketing in rural area is imbalance between production and demand. The rural
producers are not able to provide customized services to the customers. At the same
time, due to low production the rural products are also priced higher in comparison to
their corporate counter parts.

8. Poor Planning and Market Research: The concept of planning was almost absent
in the rural markets, due to lack of marketing information facilities. Rural producers
fail to produce to the goods as per the demand because of the above reason. Further,
they will not search for markets, customers and consumers for their products and
services.

9. Week Customer Relationship Management Practices: the concept of customer

relationship management (CRM) is not maintaining in the rural marketing and
businesses majority of the business were done without any maintenance of record. The
computers and internet were rarely used to record the transaction and for maintaining
the data. There is no physical evidence of the customers who purchased product and
use services.

10. Increased Logistics and Transportation Cost: Thane (Dist) rural markets are
spared unevenly they are far away from semi urban and metropolitan cities. Buying the
goods from the rural markets and transporting it to urban markets will incurs much cost
than its very production it to urban markets will incurs much cost than its very
production.

44
 THE 4PS OF RURAL MARKETING:

Most of the companies treat rural market as a dumping ground for the lower end
products designed for an urban audience. But this scenario is slowly changing and
importance is given to the need of the rural consumer. Hence it is important to
understand the 4Ps of rural marketing with respect to a rural consumer.

1. Product:
A product is the heart of rural marketing. It is a need satisfying entity to a rural
consumer. NCAER has classified consumer goods into 3 categories. These categories
cover most of the products from Rs. 100 to Rs. 20000 and above.

Category I Category II Category III

Pressure Cookers 2-in-1 (mono) C TVs (S)
Pressure Pans 2-in-1 (stereo) C TVs (R)
Mono Cassette Recorders B and W TV (S) VCRs/ VCPs
Wrist watches (mechanical) B and W TV (R) Scooters
Wrist watches (quartz) Instant Geyser Mopeds

Radio/Transistors Storage Geysers Motor Cycles

Electric irons Sewing Machines Refrigerators
Ceiling Fans Vacuum Cleaners Washing Machines
Table Fans Mixer/grinders
Bicycles

The hierarchy depends on the needs of the rural consumers. Most of the products under
category 1 are of immediate use to the family. Category 2 products reduce the strain of
the households and also act as a source of entertainment. Category 3 is a combination

45
of means to supplement income.

Rural branding aims at creating and disseminating the brand name so that it is
easily understood and recognized by the rural consumers.

In rural markets, brands are almost non-existent. They identify FMCG by three things:
1. Color,

2. Visuals of animals and birds and

3. Numbers.

So, a 555, 777, hara goli, pila Hathi, all Sabon, shaped dantmanjan are the kind of
terms with which they identify brands.

Hence it is very important for us to understand that a lot needs to be done in

terms of communications, media, marketing and branding. There are a number of cases
which suggest that to sell brands in the rural market, it is necessary to simultaneously
educate the consumers. If you have to create brand communication, marketing efforts
must be supported by education.

The following have to be kept in mind while the marketer makes a decision on the
product.
1. The product for the rural markets has to be simple, easy to use and provide after
sales service or maintenance.
2. The product has to be packed for low price and convenient usage.

3. The pack has to be easily understood by the rural consumer. The information on
the pack is preferred in local language communicating the functional benefit of
the product

2. Pricing:

A rural customer is price sensitive and shops for value. This is mainly because of
his lower income levels than his urban counterparts. Hence the marketer has to find
ways of making the product affordable to the rural consumer.

46
 Banks offer loans for tractors, pump sets, television sets and so on to make the product
affordable to a rural consumer.
Smaller unit packs are preferred in the case of FMCG products to offer at lower
prices. The product packaging and presentation offers scope for keeping the price low.
Reusable packs or refills are also preferred and are seen as value addition.

3. Placement or Distribution:
Distribution of products is one of the biggest challenges of rural marketing. There
are CWC (Central Warehousing Corporation) and SWCS (State Warehousing
Corporations) set up in rural areas to store and distribute products. A three-tier rural
warehousing setup exists:

 CWC/SWCs

 Co-operatives

 Rural Godowns

CWC and SWCs reach up to the district levels. The co-operatives are at the mandi
level. The Rural Godowns are at the village level wherein they are owned by panchayat
heads. All these tiers provide warehousing facilities only to their own members. Hence
it is a big problem for a company to store its goods in rural areas.

There are some problems of rural distribution:

 Transportation has not been fully developed.

 Lack of proper channels of communication like telephone, postal services, and so on

pose a lot of problem to marketer to service the retailer as it is difficult to the retailers
to place order for goods.
 Storage of goods in rural areas is also a problem for the marketers.

 Multiple tiers push up the costs and channel management is a major problem for
marketers due to lot of middlemen in the process.
 Availability of suitable dealers

 Poor viability of rural outlets

47
 Rural outlets need banking support for remittances to principals, get fast replenishment
of stocks, receive supplies through bank and facilitate credit. This gets handicapped due
to inadequate bank facilities.
 There are a lot of private shops in the rural sector retailer in the rural market.

There are different kinds of retailers.

 Shops within the village

 Shops located on the main road and not exactly within the village

 Kasha market or the tahsil market.

The clientele for these markets also varies. For the shops within the village, the
stocking pattern is very much dependent on the kind of investment the retailer can make
in a one-time purchase.

Margins are very important to a rural retailer. The pushing by the retailers depends
on margins and the pushing by the wholesalers depends on retailers. The gap is very
wide because the local manufacturers do not undertake investments either in terms of
advertising or anything. Hence, they are very fast imitators. For rural retailers, it’s the
question of simple economics – Am I getting more money if I invest much less on these
brands? He decides based on this question. More the margin better choice to stock and
sell.

The rural retailer stocks few brands in each category. This may have important
implications for a company and its managers because whoever reaches the market first
gets the share of the market. The rural retailer may keep some amount of area or space
for a certain product category and he won’t keep more than one or two brands. So unless
the marketer reaches there first and re- stocks at frequent intervals, he will not be able
to sell more.

The other important development has been that a greater number of companies are
offering smaller packs. The retailer today has far more shelf space than he had earlier.
Shampoos are available in sachets. He can simply string the shampoo sachets and hang
it.

48
4. Promotion:

Communication to rural consumer is through organized media. More number of

rural consumer (~70%) listen to radio and many go to cinema.
Rural communication can be through Conventional media or through a non-
conventional media. The most common conventional media include: Print, Cinema,
Television and Print. The Non-conventional media include: Theatre, Posters, Haats and
Melas.

The conventional media have excellent reach, less expensive and create a better
impact. But at the same time, it is not customized to each village and also offers
unnecessary coverage at times.

Low literacy rates, culture, traditions, rural reach, attitudes and behavior are the
other problems in rural communication.

An effective promotion should plan for a proper mix of media. This is very
important to create a mind share in the rural consumers. Hence, talking to the customer
in a language known to him, advertising the functional benefits and demonstrating the
product go a long way in capturing the rural market.

The Thane (Dist)n 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.

Hindustan Lever is the first company that comes to mind while thinking of rural
marketing. 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 Thane
(Dist), Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance
Corporation, Cavin Kare, Britannia and Hero Honda to name a few.

49
 Until some years ago, the rural market was being given a step-motherly
treatment by many companies and advertising to rural consumers was usually a hit and
miss affair. More often than not, the agenda being to take a short-cut route by pushing
urban communication to the rural market by merely transliterating the ad copy. Hence
advertising that is rooted in urban sensitivities didn't touch the hearts and minds of the
rural consumer. This is definitely changing now but is still a slow process. The greatest
challenge for advertisers and marketers is to find the right mix that will have a pan-
Thane (Dist) rural appeal. Coca Cola, with their Amir Khan Ad campaign succeeded in
providing just that.

Corporates are still apprehensive to "Go Rural." Since, the rural consumers are scattered
and it is difficult to predict the demand in the rural market. A few agencies that are
trying to create awareness about the rural market and its importance are Anurag
Madison, Sam park Marketing and Advertising Solutions Pvt Ltd, MART, Rural
Relations, O&M Outreach, Linter land and RC&M, to name a few. Also, the first four
agencies mentioned above have come together to form The Rural Network. The
paramount objective of the Network is to get clients who are looking for a national
strategy in rural marketing and help them in executing it across different regions.

50
 4A’S OF RURAL MARKETING:

The rural market may be attracting marketers but it is not without its problems:
Low per capita disposable incomes that is half the urban disposable income; large
number of daily wage earners, acute dependence on the vagaries of the monsoon;
seasonal consumption linked to harvests and festivals and special occasions; poor
roads; power problems; and inaccessibility to conventional advertising media.

However, the rural consumer is not unlike his urban counterpart in many ways.
The more marketers are meeting the consequent challenges of availability,
affordability, acceptability and awareness in rural market.

 Availability:

The first challenge in rural marketing is to ensure availability of the product or

service. Thane (Dist)'s 7, 00,000 villages are spread over 3.2 million sq. Km; 700
million Thane (Dist)ns may live in rural areas, finding them is not easy. They are highly
dispersed.
Given the poor infrastructure, it is a greater challenge to regularly reach
products to the far-flung villages. Marketer should plan accordingly and strive to reach
these markets in a regular basis. Marketers must trade off the distribution cost with
incremental market penetration.
Thane (Dist)'s largest MNC, Hindustan Lever, a subsidiary of Unilever, has
built a strong distribution system which helps its brands reach the interiors of the rural
market. To service remote village, stockists use auto rickshaws, bullock- carts and even
boats in the backwaters of Kerala.
Coca-Cola, which considers rural Thane (Dist) as a future growth driver, has
evolved a hub and spoke distribution model to reach the villages. To ensure full loads,
the company depot supplies, twice a week, large distributors which who act as hubs.
These distributors appoint and supply, once a week, smaller distributors in adjoining
areas.
LG Electronics has set up 45 area offices and 59 rural/remote area offices to
cater to these potential markets.

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 Affordability:

The second major challenge is to ensure affordability of the product or service.

With low disposable incomes, products need to be affordable to the rural consumer,
most of who are on daily wages. A solution to this has been introduction of unit packs
by some companies. This ensures greater affordability.
Most of the shampoos are available in smaller packs. Fair and lovely was
launched in a smaller pack. Colgate toothpaste launched its smaller packs to cater to
the traveling segment and the rural consumers.
Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in
50- gm packs.

Hindustan Lever has launched a variant of its largest selling soap brand, Lifebuoy.

Coca-Cola has addressed the affordability issue by introducing the smaller

bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now
come from the rural markets. A series of advertisement for this was rune showing
people from diverse backgrounds featuring Aamir Khan.

 Acceptability:

The next challenge is to gain acceptability for the product or service. Therefore, there
is a need to offer products that suit the rural market.
LG Electronics have reaped rich dividends by doing so. In 1998, it developed a
customized TV for the rural market named Sam Poorna. It was a runway hit selling
100,000 sets in the very first year.
Coca-Cola provided low-cost ice boxes in the rural areas due to the lack of
electricity and refrigerators. It also provided a tin box for new outlets and thermoses
box for seasonal outlets.

The insurance companies that have tailor-made products for the rural market
have also performed well. HDFC Standard LIFE topped private insurers by selling
policies worth Rs 3.5 crore in total premia. The company tied up with non-

52
 governmental organizations and offered reasonably-priced policies in the nature of
group insurance covers.

 AWARENESS:

A large part of rural Thane (Dist) is inaccessible to conventional advertising

media. Only 41 per cent rural households have access to TV.
Building awareness is another challenge in rural marketing. A common factor between
the rural and the urban consumer is the interest for movies and music. Family is the key
unit of identity for both the urban and rural consumer.

However, the rural consumer expressions differ from his urban counterpart. For
a rural consumer, outing is confined to local fairs and festivals and TV viewing is
confined to the state-owned Door darshan. Consumption of branded products is treated
as a special treat or indulgence.

Hindustan Lever has its own company-organized media. These are promotional
events organized by stockists. Godrej Consumer Products, which is trying to push its
soap brands into the interior areas, uses radio to reach the local people in their language.

Coca-Cola uses a combination of TV, cinema and radio to reach the rural
households. It has also used banners, posters and tapped all the local forms of
entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising
stressed its `magical' price point of Rs 5 per bottle in all media. LG Electronics uses
vans and road shows to reach rural customers. The company uses local language
advertising. Philips Thane (Dist) uses wall writing and radio advertising to drive its
growth in rural areas.

Also, in Thane (Dist), the retailers are highly fragmented, highly dispersed. At the same
time, each of these regions serves a large population. The media penetration in rural
areas is only about 57%.

It has been seen that, two out of five Thane (Dist)ns are unreached by any media

TV, Press, Radio and Cinema put together. Haats, mandis and melas are opportunities.

53
CHAPTER 4:

DATA ANALYSIS,
INTERPRETATIN AND
PRESENTATION

54
DATA ANALYSIS AND INTERPRETATION

Thane District Rural Part, with population of about 1.11 lakh is Maharashtra's the 7th
most rural populous district, located in the state Maharashtra in India. Total
geographical area of Thane district rural part is 8460 Km and it is the 16th biggest rural
district by area in the state. Population density of the district is 301 persons per Km.
There are 14 sub districts in the district, among them Dahanu Rural is the most
populous sub district with rural population of about 3.4 lakh and Thane Rural the least
populous sub district with rural population of about 16 thousand.

1.Working population’s rural markets Thane has 46% (about 11.7 lakh) population
engaged in either main or marginal works. 56% male and 35% female population are
working population. 46% of total male population are main (full time) workers and 10%
are marginal (part time) workers. For women 23% of total female population are main
and 12% are marginal workers.

Percentage of working population – Thane

55
2. What influenced you to buy a particular brand?

f) Family/Friends/ g) Any Other

Relatives (Please Specify) _
5% e) Dealer 2%
8% a) Advertisement
d) I Word of Mouth 39%
23%

b) Attractive
Packaging
c) Shop Display
8%
15%
a) Advertisement b) Attractive Packaging
c) Shop Display d) I Word of Mouth
e) Dealer f) Family/Friends/Relatives
g) Any Other (Please Specify) _

3 .What are the different launch promotional schemes company Lunch on their
products ?

TITLE
70
60
50
Axis Title

40
30
20
10
0
c) Prices on the d)
a) Money back b) Prizes on the
specific number of BumperBumper
offer bottle cap.
bottle caps. prize.
Series1 60 20 10 10

56
4 . What is the occupational pattern of rural Population ?

Rural Population (%)

1%
2% Agriculture

1% Agriculture wage
4%3%
9% Business and craft
Non-Agriculture Wager
53% 50% Salaries
30% Current Transfer
Others
Total

5. What are the challenges in promotion facing product in rural area?

Challenges in promotion facing producte

a ) Communication b ) Type of promotion
c ) Ganaral awareness among rural public d ) Rigid attitude among rural public

c ) Ganaral
awareness among
rural public
b ) Type of 10%
promotion
30%
d ) Rigid attitude
Other
among rural public
10%
10%
a)
Communication
50%

57
6. What Type of opportunities is in rural market?

opportunities for rural market

0.6

0.5

0.4

0.3

0.2

0.1

0
a) Less b) Unexpected c) Product life d) Rural market
competition market cycle are big

Series1

7. Which marketing strategy or scheme dramatically affects the sale of product?

MARKETING STRATEGY

Low Price/Cos

b) Good Advertising

a) Availability

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

a) Availability b) Good Advertising Low Price/Cos

Series1 0.2 0.1 0.7

58
8. Do you make purchase decision on the basis of brand ?

40

35

30

25

20

15

10

0
discount Brand Series1Language
Series2 Series3
Content Tagline

9. What kind of promotion attracts you?

Chart Title
35

30

25

20

15
Series3
10
Series2
5
Series1
0

59
10. If a particular brand is not available with the retailer what will you do?

Brand is not available

0.6
0.5
0.4
0.3
Series1
0.2
Series1
0.1
0
a) Drop the idea of b) Go to another retail c) Try another
buying products outlet (competitor's) brand

60
CHAPTER 5:

QUESTIONNAIRE
QUESTIONNAIRE:

Q.1 May I know your name please?

Q.2 How old are you?

Q.3 What is your monthly income?

Q.4 What influenced you to buy a particular brand?

a) Advertisement
b) Attractive Packaging
c) Shop Display
d) Word of Mouth
e) Dealer
f) Family/Friends/Relatives
g) Any Other (Please Specify) _

Q.5 Do promotional schemes affect your choice?

1 Yes.

2 NO.
Q. 6 Which one of the following policies affects your selection?

a) Discount Policy
b) Promotion Policy

Q.7 What are the different launch promotional schemes company Lunch on their products

a) Money back offer

b) Prizes on the bottle cap.
c) Prices on the specific number of bottle caps.
d) BumperBumper prize.

Q.8 If a particular brand is not available with the retailer what will you do ?

a) Drop the idea of buying products

b) Go to another retail outlet
c) Try another (competitor's) brand

Q 9. Do you find any price difference in between rural and urban area's product?

a) Yes

b) No
c) QUESTIONNAIRE FOR RURAL DEALER:

Q.1 Why your choice rural market?

a) uncovered market
b) for growth and experience

Q.2 Which is the most effective strategy for the promotion of the product?

a) Wall Paintings
b) Customer contact
c) I Van Campaigns
d) Event Management

Q .3 Do you use some extra strategies for the product promotion?

a) Yes
b) No

Q.4 What Is Changing Pattern of Rural Demand?

a) Market for consumer goods.

b) Market for agricultural inputs and machinery.
c) Market for services.
d) Market for construction materials for farms and village level industries.
e) Transportation equipments.
Q.5 What are the challenges in promotion facing product in rural area?

a) Communication
b) Type of promotion
c) General awareness among rural public
d) Rigid attitude among rural public

Q.6 What Type of opportunities is in rural market?

a) Less competition
b) Unexpected market
c) Product life cycle
d) Rural market is big

Q.7 Which marketing strategy or scheme dramatically affects the sale of products?

a) Availability
b) Good Advertising
c) Low Price/Cost

Q .8 Rank the following offers in order of your preference that attracts you the most to sell
aparticular brand?

a) Brand that offer discounts

b) Brand that offer good promotional schemes
c) Brand that offer stock on credit basis
d) Brand that offer good marketing support
CHAPTER 6:
CONCLUSIONS
CONCLUSIONS:

Thane (Dist) Rural Market play a key role as it provides great opportunities to the
corporation to make longer their reach to near seventy percent of population. Rural market also
profits the rural economy by providing infrastructure services, uplifting the set and quality of life
of the people reside in rural area. Though the rural market has become a choice destination for
every marketer but it’s important to realize that it has lot of challenges and risk, so corporations
should tax the obstruction as carefully as possible.
A thorough understanding of rural markets and systematic move towards are necessary to
enter rural market. In order to develop marketing power, the rural consumers buying behavior.
Rural market is the market of the new millennium. The rural market is where the markets of the
future are likely to be. Urban markets are becoming more and more feasible for many products. In
some cases, they are even soaked. Opportunities and challenges go hand in hand.
Rural market provides various opportunities like- huge market, increase in literacy rate,
improvement in infrastructure, etc. down with opportunities, it poses some challenges like-
scattered market, serial demand, lack of right skill, etc. which need to be cope up. Marketers will
include expressive the rural customers before they can make inroads into the rural Marketing.
CHAPTER 7:
BIBLIOGRAPHY
BIBLIOGRAPHY:

“HLL Aims for Rural Market”, www.blonnet.com, May 10, 2000.

Opportunities and Challenges for Rural Marketing in India.
WWW. Rural Marketing Thane District IOSR Journal.
Rural Marketing is real Marketing Thane (Dist) book.
“Rural sales drive growth”, Business Standard, April 12, 2004.
Advertising in Rural Thane (Dist.): Language, Marketing Communication, and Consumerism