Introduction

In our country over 70% of the total population live in villages. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies form 80 to 90 per cent. Agriculture and agriculture related activities contribute to about 75% of the income in rural areas. The general impression is that the rural markets have potential only for agricultural inputs like seeds, fertilizers and pesticides, cattle feed and agricultural machinery. More than 50% of the national income is generated in rural India and there are opportunities to market modern goods and services in rural areas and also market agricultural products in urban areas. Infact it has been estimated that the rural markets are growing at fives times the rate of urban markets. About 70% of bicycles, mechanical watches and radios and about 60% of batteries, sewing machine and table fans are sold in rural India. At the same time the sales of colour television, washing machines, refrigerators, shampoos, face cream, mosquito repellent and tooth paste are very low and there is tremendous potential for such products in rural markets While rural markets offer big attractions to the marketers, it is not easy to enter the market and take a sizeable share of the market within a short period. This is due to low literacy, low income, seasonal demand and problems with regards to transportation, communication and distribution channel. Further there are different groups based on religion, caste, education, income and age. There is a need to understand the rural markets in terms of buyer behaviour, attitudes, beliefs and aspirations of people.

Significance
In recent years, rural markets have acquired significance in countries like China and India, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities. On account of the green revolution in India, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has taken shape. Sometimes, rural marketing is confused with agricultural marketing the later denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers

Present position

Rural markets, as part of any economy, have untapped potential. There are several difficulties confronting the effort to fully explore rural markets. The concept of rural markets in India, as also in several other countries, like China, is still in evolving shape, and the sector poses a variety of challenges, including understanding the dynamics of the rural markets and strategies to supply and satisfy the rural consumers.

Strategies
Dynamics of rural markets differ from other market types, and similarly rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial consumer. This, along with several other related issues, have been subject matter of intense discussions and debate in countries like India and China and focus of even international symposia organized in these countries. Rural markets and rural marketing involve a number of strategies, which include:

Client and location specific promotion Joint or cooperative promotion Bundling of inputs Management of demand Developmental marketing Unique selling proposition (USP) Extension services Business ethics Partnership for sustainability

Client and Location specific promotion involves a strategy designed to be suitable to the location and the client. Joint or co-operative promotion strategy involves participation between the marketing agencies and the client.

Supply Chain through Distributing agents in rural markets

'Bundling of inputs' denote a marketing strategy, in which several related items are sold to the target client, including arrangements of credit, after-sale service, and so on. Management of demand involve continuous market research of buyers needs and problems at various levels so that continuous improvements and innovations can be undertaken for a sustainable market performance. Developmental marketing refer to taking up marketing programmes keeping the development objective in mind and using various managerial and other inputs of marketing to achieve these objectives. Media, both traditional as well as the modern media, is used as a marketing strategy.

Media Modes of Marketing

Unique Selling Propositions (USP) involves presenting a theme with the product to attract the client to buy that particular product. For examples, some of famous Indian Farm equipment manufactures has coined catchy themes, which they display along with the products, to attract the target client that is the farmers. English version of some of such themes would read like: The heartbeats of rural India With new technique for a life time of company For the sake of progress and prosperity

Generation N:XT

Extension Services denote, in short, a system of attending to the missing links and providing the required know-how. Ethics in Business form, as usual, an important plank for rural markets and rural marketing. Partnership for sustainability involves laying and building a foundation for continuous and long lasting relationship.

Characteristics of rural markets

Large number of consumers: According to the 1991 census, the rural population constitutes about 65% of the total population in our country. While the population went from 85 crores (1991) to 109 crores (2006), the rural-urban proportion have remained more or less the same as in 1991. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies from 60 to 70 percent. Therefore a large population gives an opportunity for marketing a variety of goods and services. However income and purchasing power play a major role in determining the demand in rural areas. Occupation pattern: Agriculture and related activities continue to be the main occupation for majority of the rural population. Land is the major source of income for about 77% of the population. Others are engaged in business (10%), non-agriculture labour (9%), salary earners (2%) and not gainfully employed (2%). It is evident that rural prosperity depends upon growth and development of agriculture. Literacy level: It has been estimated that the rural literacy level is 36% compared to 62% in urban areas. Literacy is one of the important factors in developing awareness and knowledge about technological changes. As many as 16 major languages are spoken adding to the complexities in rural communication. Low standard of living: Low income, low purchasing power, overall social and economic backwardness lead to low standard of living. In general a rural consumer spends less on non-food items.

Media reach: The media reach in rural household is low. Statistics indicates that the reach of Print media is 10%, followed by TV 31%, Radio 32% and Cinema 36%. Therefore the marketer has to consider rural specific promotion media and methods to reach the villagers. Communication facilities: About 20% of the six lakh villages are without telephone facility even today. This includes Rajasthan (17600 villages), MP (14200 villages), Maharashtra (12000 villages), Gujarat (7000 villages), and AP, Assam, Orissa about 6000 villages each. (Source: The Indian Express dated 30.3.2003). Transportation facilities: About 50% of the markets are not connected by road. Most of the roads are kachha and become unusable during rainy season. Many farmers use bullock cart for transporting their produce from village to the market. This means of transport is time consuming.

Rural electrification: The main objective is to provide electricity for agricultural operations and for small industries in rural areas. About 5 lakh villages (77%) have electric supply and this has increased the demand for electric supply and this has increased the demand for electric motors, pumps and agricultural machinery.

Rural electrification Medical facilities: Medical facilities are quite inadequate and the villagers have to travel long distances for getting medical treatment.

Distance: Village nearer to towns has elements of the urban life. Interior villages are more traditional.

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Promotion strategies

Through the rural markets offer big attractions to the marketers, one of the most important questions frequently asked is How do we reach the large rural population through different media and methods? Formal media It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor advertisement. Reach of formal media is low in rural households (Print:18%, TV:27%, Cinema:30%, and Radio:37%) and therefore the marketer has to consider the following points: Newspapers and magazines: English newspapers and magazines have negligible circulation in rural areas. However local language newspapers and magazines are becoming popular among educated facilities in rural areas. Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North,

Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas. Television: It has made a great impact and large audience has been exposed to this medium. HLL has been using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the products advertised via television. Regional TV channels have become very popular especially in Southern states.

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Examples of television : SUN TV is very popular even in rural areas in Tamil Nadu and Asianet is a preferred regional channel in Kerala. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rural customer. Radio: Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies using radio communication programme. There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The advertisement has to be released during this time to get maximum coverage in rural areas. Another advantage is that the radio commercial can be prepared at short notice to meet the changing needs of the rural folk. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops. Cinema: About 65% of the earnings from cinema are from rural markets. Film viewing habits is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatres do roaring business during festivals by having four shows per day. The monthly charge for showing an ad film is within Rs.500. Local distributor or dealer who has good contacts with cinema houses in villages can easily monitor this activity. Examples: Films on products like Vicks, Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides can also be screened in village theatres. Outdoor advertisements: This form of media, which includes signboards, wall painting, hoarding, tree boards, bus boards, dealer boards, product display boards etc, is cost effective in rural areas.

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Symbols, pictures and colours should be used in POPs meant for rural markets so that they can easily identify the products. Generally rural people prefer bright colours and the marketer should utilize such cues.

Point of purchase: Display of hangings, festoons and product packs in the shops will catch the attention of prospective buyers. However a clutter of such POP materials of competing companies will not have the desired effect and is to be avoided. Direct mail advertising: It is a way of passing on information relating to goods or services for sale, directly to potential customers through the medium of post. It is a medium employed by the advertiser to bring in a personal touch. In cities lot of junk mail is received by all of us and very often such mails are thrown into the dustbin whereas a villager get very few letters and he is receptive to such mailers. Wall paintings: It is an effective and economical medium for communication in rural areas, since it stays there for a long time depending upon the weather conditions. The cost of painting one square foot area is just Rs.10. Retailers welcome painting of their shops so that the shop will look better. Walls of farm houses, shops and schools are ideal places for painting and the company need not

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have to pay any rent for the same. The walls have to be painted at least one or two feet from ground level. It is better to take permission of the owner. Very often the owner takes responsibility for taking care of the wall painting. Painting to be avoided during election time and rainy season. The matter should be in the form of pictures, slogans for catching the attention of people. Companies marketing TV, fans, branded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in rural areas.

Tree boards: These are painted boards of about two square feet in dimension having the picture or name or slogan of the product painted on it. The cost of such a painted board is about Rs.80. These boards are fixed to the trees on both sides of the village road at a height of about 10 feet from ground level. These boards attract the attention of slow moving vehicles like cycles, bullock carts and tractors and people walking on the road. Considering the poor condition of roads, even the buses move at slow speed through village road. Fertilizer and pesticide companies in rural areas extensively use tree boards. These are low priced promotion items and can be used by consumer goods companies too.

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Informal/Internal specific media

These media with effective reach and personalized communication will help in realizing the promotional objectives. Companies to suit the specific requirements of rural communication are using a variety of such media effectively and some of the more important media and methods are given below. Farm-to-Farm/House-to-House visit: Rural people prefer face-to-face communication and farm visits facilitate two-way communication. The advantage is that the sales person can understand the needs and wants of the rural customer by directly discussing with him and answer his queries on products and services. Potential customers in the village are identified and the companys/distributors representative makes farm-to-farm visits and highlight the benefits of the products. The person carries with him literature in local language and also samples of products. The person does not sell the product but only promotes the use of the product. Very often the local dealer also joins the representative in making farm-to-farm visits. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders. Example: This approach has been found to be very effective for agricultural machinery, animal health products and agricultural inputs. Many LIC agents and companies dealing with high value consumer durables have tried this method with success in rich rural areas. Group meeting: Group meetings of rural customers as well as prospects are an important part of interpersonal media. The company is able to pass on the message regarding benefits of the products to a large number of customers through such meetings. Group meeting of key customers are conducted by banks, agricultural inputs and machinery companies in rural areas.

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The bankers visit an identified village, get the village people in a common place and explain the various schemes to the villagers. Such meetings could be organized in prosperous villages for promoting consumer durables and two wheelers also. Example: MRF Tyres conduct tractor owners meet in villages to discuss repairs and maintenance of tractors.

Opinion leaders: Villagers place more emphasis on the experience of others who have used a

product/brand to make purchase decision. Opinion leader is a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. Such opinion leaders could be big landlords, bank official, panchayath-president, teachers, extension workers etc. Examples: a) Mahindra Tractors use bankers as opinion leaders for their product. b) Asian Paints promoted its Utsav brand of paint by painting the village Sarpanchs house a few months prior to the launch if the branch to demonstrate that the paint does not peel off. The Melas: Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs and may be held only for a day or may extend over a week. Many companies have come out with creative ideas for participating in such melas. Examples: a) Britannia promotes Tiger Brand Biscuits through melas. b) The mahakumbh at Allahabad is the biggest mela in India. HLL has put up 14 stalls in the mela grounds for promoting Lifebuoy. Handcarts have been deployed for increasing access.

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Melas The Haats: Traditionally on certain days of week, both the sellers and buyers meet in the village to buy and sell goods and services. These are the haats that are being held regularly in all rural areas. The sellers arrive in the morning in the haat and remain till late in the evening. Next day they move to another haat. The reason being that in villages the wages are paid on weekly basis and haat is conducted on the day when the villages get their wages. For the marketer, the haat can be an ideal platform for advertising and selling of goods. By participating in haats and melas, the company can not only promote and sell the products but also understand the shared values, beliefs and perceptions of rural customers that influence his buying behaviour. Folk dances: These are well-appreciated form of entertainment available to the village people. The folk dance Kuravan Kurathi is popular in Tamil Nadu. The troupe consists of dancers, drummers and musicians and they move in a well-decorated van from one village to another village singing and dancing. In a day the troupe covers about 8-10 villages. As soon as the van reaches a village, film songs are played to attract the attention of the villages. This is followed by folk dances. Mike announcement is made about the companys products and leaflets are distributed. After the dance programme, queries, if any, about the products are answered by the sales person.

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Folk dance programme costs about Rs.5000 per day and therefore these programmes are conducted during the peak season in selected villages. Examples: Fertilizer and pesticide companies organize folk dance programmes during peak season in selected markets. Thumps Up has sponsored Lavnis, the folk dance programme of Maharashtra and over 30 programmes have been arranged in selected rural markets.

Folk dance

Audio Visual Publicity Vans (AVP Vans): AV unit is one of the effective tools for rural communication. The van is a mobile

promotion station having facilities for screening films slides and mike publicity. The sales person makes a brief talk about situation in the village, the products and the benefits. The ad film is screened along with some popular film shots and this continues for about 30 minutes. At the end of the film show, he distributes handbills and answers queries of the customers. The whole operation takes about 1-2 hours depending upon the products under promotion, number of participants in the meeting and time taken for question and answers. The vans move to the next village for the second show. The cost of running a fully equipped AVP unit is about Rs.4000 per day and AVP van operation has to be considered as an investment for business development in rural areas. Example: Companies such as HLL, Colgate, and Phillips have made effective use of AVP vans for popularizing their products in rural areas.

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Product display contests: Package is an integral part of the product. Its main purpose is to protect the product

during transit, to preserve the quality and to avoid any loss in quality and quantity. The main purpose of this contest is to remind the customer to buy the product as soon as he enters the shop. Another objective is to influence the dealer to stock the product and support the company in increasing the sales. The display contest has to be announced well in advance and promotional materials to be distributed to all the selected dealers in a geographical area. Prizes for best displays are announced to motivate the dealers; the contest lasts for about a month. A wellplanned product display contest not only increases the involvement of dealers in the companys products but also increases the sales during the contest period. This is used for promoting consumer goods such as shampoos, soaps and toothpaste. Field demonstration: This is based on the extension principle seeing is believing and is one of the most effective methods to show the superiority of the companys products to the customers. A progressive farmer who is an opinion leader is selected and the demonstration is conducted in his field in the presence of a group of farmers in the village. The farmers observe the results in the field and the local dealer calls on them in their farms and persuades them to buy the particular brand of pesticide or fertilizer. Examples: a) Spraying a particular brand of an insecticide against insect pests and showing the farmer how effectively the insects are controlled. b) Demonstrating the use of tractor/implements for different agricultural operations. c) Hawkins pressure cooker has demonstration representatives who carry out demos in rural households. The representative receives 1% commission for every customer who approaches the dealer via demonstrations. e) Similarly effectiveness of detergents, pressure cookers, vaccum cleaners and mosquito coils could be promoted by demonstrations in selected markets.

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Field days: These are extension of field demonstrations. One of the main objectives of following

modern agricultural practices is to increase the yield. The company organizes demonstrations in a piece of land belonging to progressive farmers. All the fertilizers, pesticides, nutrients etc. are applied after making field observations. Just before harvest, all the important farmers are invited to see demonstration plot and see for themselves how the yields are better in the plot compared to other fields. Field demonstrations/field days consume lot of time and efforts and therefore have to be planned well. Information centers: They provide latest information on cultivation of crops, fertilizer application, weed, management and control of pests and diseases. Experienced agricultural graduates who make frequent visits to the field and advice farmers on modern agricultural practices manage the centers. They also provide information on farm implements, seeds, fertilizers, pesticides, diesel engines, sprayers and tractors etc. Many consumer goods companies have opened show rooms in prosperous rural areas. Example: Hero Honda has opened extension counters with show room facilities in major rural markets. Life-style marketing: Each rural market segment has certain special features i.e. they share common life-style traits. They include village sports, religious events, prominent personalities and role models. Examples: Textile mills maintaining community gardens, Mineral water companies supplying clean drinking water during summer festivals in villages and Consumer goods companies sponsoring Kabaddi.

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THE BOTTOM OF THE PYRAMID

INTRODUCTION : Everyday you hear on the radio and see it on the television, the pitiful approach for generating funds for the needy. However, how long can one maneuver their ways and coax the rest of the population to fork out measly part of their income? What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable winwin scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable. Basically either stimulate the enterprising spirits in them or produce products that would cater to their need at affordable prices. The phrase bottom of the pyramid was used by U.S. president Franklin D. Roosevelt in his April 7, 1932 radio address, The Forgotten Man, in which he said These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power...that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid.

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The Bottom Of The Pyramid

Population of 4 Billion people lies in the bottom of the pyramid. Although, there are some organizations that have always been in the picture to assist this tier of the population, for example financial institutions, construction companies. How have they been successful? The strength of these innovative approaches, as you will come to appreciate, is that they tend to create opportunities for the poor by offering them choices and encouraging self-esteem.

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Distribution Channel Strategies

The channel members consist of wholesalers and retailers who are middlemen in distribution and they perform all marketing functions. These middlemen facilitate the process of exchange of goods; create time, place and possession utilities. Therefore channels are useful to producers as well as consumers. Even if a company has a product that meets the requirements of rural consumers, it will succeed only if it is made available at the right place as and when required by the consumer. Direct sales to consumers: Examples: In many states, the government has encouraged farmers to sell vegetables directly to urban consumers by setting up Framers market. Farmers, in this case, put up stalls in the market place and directly sell fresh vegetables to the consumers, eliminating middlemen in the market. Manufacturer-wholesaler-retailer-consumer: The manufacturer appoints wholesalers in key rural markets and these wholesalers cater to the needs of retailers in villages. Example: Sale of pesticides used in agriculture. Manufacturer-retailer-ultimate consumer: Examples: 1) Companies like Hero Honda have direct retailers in semi-urban markets. 2) Mahindra Tractors have appointed distributors in all prosperous rural areas and these distributors deal directly with farmers for sales and services of tractors. 3) Philips has direct distributors in areas with low demand and poor accessibilities. The distributors extend credit facilities; they follow a journey cycle and have delivery vans to service remote markets.

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 Manufacturer-C &F agent-wholesaler (stockiest)- retailer-consumer: Fast moving consumer goods such as biscuits, soaps, and tooth paste are distributed through two/three intermediaries. Example: HLL, Nestle, Marico have appointed stockiest to service the village merchants and the merchants are met at fortnightly/monthly intervals through van operations. Project Shakti: HLL has come out with a new distribution model with main objective to develop incomecreating capabilities of underprivileged rural women by providing a sustainable enterprise opportunity and to improve rural living standards through health and hygiene awareness. Typically a women from the Self Health Group is selected as a Shakti entrepreneur and receives stocks of Lifebuoy, Wheel, Pepsodent, Annapurna salt, Clinic Plus, Ponds, LUX, Nihar, 3 Roses tea etc. at her doorstep from the HLL rural distributor. She sells directly to consumers as well as to small merchants in the village. Each Shakti entrepreneur services 6-10 villages in the population range of 1000-2000 people. With training and hand holding by the company for the first three months, she begins her door-to-door journey selling the products. Normally the entrepreneur has a turnover of Rs. 10000 to Rs.25000 per month and earns a profit of Rs.800 to Rs.2000 a month. The project was started in Nalgonda District in AP and at present there are about 1000 women entrepreneurs in AP, Karnataka, Gujarat and MP. The plan is to have over 11000 Shakti entrepreneurs covering one-lakh villages. The most powerful aspect of this model is that it creates a win-win partnership between HLL and the Women entrepreneur. Development of retailers in rural markets: One of the important challenges faced by the marketer is the development of a chain of retailers in rural markets. The problems are non-availability of retailers and poor viability of

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retail outlets due to low business volumes. The marketer could consider some of the existing retail outlets in rural areas. Co-operative societies: There are about 3 lakh cooperative societies operating in rural areas. Many of these societies distribute consumer goods and low value consumer durables.

Public distribution system: Essential commodities such as sugar, kerosene, edible oils are made available to

the consumers at reasonable prices through fair price shops. Such shops are run by state civil supplies department, co-operatives or by private parties. Marketers could explore the possibility of selling goods through PDS. Agricultural input dealers: There are about two lakh dealers selling fertilizers. Many of these dealers deal in consumer goods also. The marketers could approach these dealers and find out the possibility of selling consumer products in rural areas. Feeder markets or mandis: The rural consumer visit nearby towns for selling agricultural produce and buying consumer durables. Stockiest could be appointed in such feeder towns to service the village shops in interior places.

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Physical Distribution Strategies

Considering the constraints in physical distribution of stocks in rural areas, many companies have come out with innovative solutions. Satellite distribution: In this system, the company appoints stockiest in important towns. These stockiest are responsible for placing orders with the company, receiving the stocks, sorting of stocks and supply the goods in small lots to the retailers and merchants situated is rural areas and in and around the towns. The stockiest is given 15-20 days credit by the company. Over a period of time along with increase in business, some of the good retailers will be elevated as stockiest. Therefore, many retailers hover around a particular stockiest. The advantage of this system is it enables the organization to penetrate interior markets. Example: Companies like HLL, Nestle, and Marico have appointed stockiest to service he village merchants and the merchants are met at fortnightly/monthly intervals through van operations. Syndicate distribution: There are cases wherein companies do not have resources for running exclusive vans for delivery of goods to the rural market. In this case, the firms selling non-competitive consumer goods come together and operate delivery van to service the rural retailers Haats: Traditionally on certain days of week, both the sellers and buyers meet in the village to buy and sell goods and services. These are the haats that are being held regularly in all rural areas. By participating in haats and melas, the company can not only promote and sell the products but also understand the shared values, beliefs and perceptions of rural customers that influence his buying behaviour.

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 The Melas: Melas are of different types i.e. commodity fairs, cattle fairs and religious fairs and may be held only for a day or may extend over a week. Many companies have come out with creative ideas for participating in such melas. Example: Kisan Mela in Ludhiana is an annual feature and companies like Maruti have been able to book orders for cars by participating in this Mela. Physical distribution of stocks: Through delivery vans: The van may be owned by the company or by wholesalers. The delivery van takes the product to the retail shops in villages. The distributors salesperson travels in the van and he delivers the stocks to the retailer and collects the money too. Example: Bharat Petroleum has introduced Rural Marketing Vehicle (RMV) way back in 1999 in Punjab. The vehicle moves from village to village and fills LPG cylinders on the spot to rural customers. Through Hired vans: In this case, the wholesaler uses a hired vehicle to cover the retailers in villages. Normally, the cost of operation of the hired vehicle is shared between the wholesaler and the company. Example: Balsara distributors use hired vehicles to reach the rural retailers. Through Bullock cart or camels: It is used for covering remote villages with no motorable road.

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Conclusion

The cost of going global is very high, and it is difficult to gauge markets in other countries.it is better to target the rural market as it is growing by the day.today rural markets are as critical as urban markets.

Urban markets are getting saturated. The rural markets provide better opportunities. In village vast competition exists. Different companies come with different flavors. So people have ample choice. A huge untapped market. With only around 100000 of the 638667 villages tapped so far there are huge potential and market areas. So we get high percentage of total market though profit margin is less. Rising disposable incomes. Now a days villagers also spend on luxuarary & comfort products. As high disposable income more the advantage for the marketer to market the needs of the consumer Impact of media. Media also plays an important role in promotion of goods. The growing reach of the electronic media has created a huge change in the lifestyle of rural consumer.

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Problems relating to rural marketing

The rural market offers a vast untapped potential; it should also be recognized that it is not that easy to operate in rural market because of several problems. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems. The problems are. Underdeveloped people and underdeveloped markets : The agricultural technology has tried to develop the people and market in rural areas. Unfortunately, the impact of the technology is not felt uniformly through out the country. Some districts in Punjab, Haryana or Western Uttar pradesh where rural consumer is somewhat comparable to his urban counterpart, there are large areas and groups of people who have remained beyond the technological breakthrough. In addition, the farmers with small agricultural land holdings have also been unable to take advantage of the new technology. Lack of proper physical communication facilities : Nearly 50 percent of the villages in the country do not have all weather roads. Physical communication to these villages is highly expensive. Even today, most villages in eastern part of the country are inaccessible during monsoon season. Inadequate Media coverage for rural communication : A large number of rural families in own radios and television sets there were also community radio and T.V sets. These have been used to diffuse agricultural technology to rural areas. However the coverage relating to marketing is inadequate

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Many language and Dialects : The number of languages and dialects vary from state to state region to region This type of distribution of population warrants appropriate strategies to decide the extent of coverage of rural market. Market organization & staff : The size of the market organization and staff is very important, to manage market system effective control. However the existing organizational setup particularly at district and block level needs to be strengthened in order make the services on various ascepts available to the farmers timely and also easily accessible to them. Other factors influencing marketing : Natural calamities and Market conditions (demand, supply and price). Pests and diseases, Drought or too much rains, Primitive methods of cultivation, lack of proper storage facilities which exposes grain to rain and rats, Grading, Transport, Market Intelligence (up to date market prices to villagers), Long chain of middlemen (Large no. of intermediaries between cultivator and consumer, wholesalers and retailers, Fundamental practices (Market Dealers and Commission Agents get good part of sale of receipts). Major Losers : Small and marginal formers, 75% villagers are illiterates or semiliterate, they facing difficulties like proper paper procedures for getting loans and insurance. The farmers facing high interest rates for their credits (Local money lending system). Most of the credit needed for agricultural inputs like seeds, pesticides, and fertilizers.

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The Major weakness and challenges : Traditional mind not to react new ideas. Agricultural income mostly invested in gold ornaments and weddings. Low rural literature. Not persuading new thinking and improved product. More than 50 years of independence have passed but the citizen of rural India still dreams for the promises on rural development to get fulfilled. India has more than 600 thousand villages, housing two-third of its people, earning one-fourth of the national income. There are about 47,000 rural Haats in India which exceeds the total number of retail chain stores in the US (35,000), the rural share in both FMCG and durable categories has grown beyond 50% from 25% in eighties... the facts on rural market bloom have filled the news. On the contrary, the development marked within this sector makes a shocking insight - whilst the average growth rate of urban India is about 20%, the rural countryside drags at a mere 2-3% per year. Villages are desperate for appropriate services at affordable cost from education to market access, from telecom to healthcare, from financial intermediation to entertainment. But the non-availability of such services linked to the lack of perceived opportunities in rural areas by the investors creates a dead end for progress.

Peeking deeper, the common village man seems to sacrifice a considerable chunk of his routine for administrative officials. Traveling hundreds of kilometers, he doesn't fail to donate his valuable time, money and painful efforts towards a redressal, however the below-par working standards within a hauling bureaucratic system only leave him expecting for more, and perhaps much better. Frustrated and helpless, there is no option but to move to nearby town. Every year lacs of such migrants flood cities for better living standards- which could be as low as just two meals per day! And as a consequence, the erosion of valuable resources from cities as well as villages increases at an alarming pace.

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RURAL INDIA GETTING RICHER

Anugraha Madison has widely been credited with introducing the concept of rural marketing in India. The company was one of the first marketing firms to realise the potential of rural India and decided to focus on rural marketing. R V Rajan, chief managing director, Anugraha Madison, shares his views with Shobha Warrier on how rural India has changed over the last two decades. When marketing agencies concentrated only on urban India, why did you decide to focus on the rural market? My foray into the rural market was not deliberate. It so happened that when I came to Chennai from Mumbai in 1974, I found that most of the clients belonged to the agriculture and fertiliser sectors. So I had to deal with farmers. When Sam Balsara of Madison came down to Chennai looking for an associate, we decided to have a joint venture and position ourselves as rural specialists mainly because of my experience in the field. Although I have been involved with rural communication and marketing for the last two and a half decades, the positioning of Anugraha took off only after the joint venture. Anugraha Madison is now the rural division of Madison Communications. 32

In the last two and a half decades, how much has rural India changed in its aspirations, attitude and consumption? Rural India has changed tremendously. The data published by the National Council of Applied Economic Research shows that in the last ten years, the income of rural India has grown several-fold. There is a definite shift from middle to upper middle class and from lower to middle class segments. Is the shift due to the growth in Indian agriculture? For the last 10 consecutive years, we have had good monsoons. So, agriculture is prospering. Of course, there have been setbacks in the last couple of years. Another interesting aspect is, today rural India is not 100 per cent dependent on an agrarian economy. Unlike in the past where the ratio between those who involved in agriculture and in other business was 75-25, today the estimated ratio is 50:50, if not 60:40. So today, 50-60 per cent of the rural population is involved in other businesses. A lot of people belonging to the second generation are getting white-collar jobs in nearby towns. So, there is a growing middle class with a monthly income in rural India and it is a drastic change from the past where their income was totally dependent on the monsoon, cropping season, etc. This has resulted in a definite growth in the prosperity level in rural India. Of course, there are still a lot of poor people, especially the agricultural labourers. But there is a growing middle class with regular income and the rural rich are becoming richer. Is the urban-rural divide in India thinning now? The urban-rural divide is still there, but the divide between urban and rural India is thinning among the top segment of rural India. The rural rich are almost like urban India. Rural India is like a pyramid. The top of the pyramid is occupied by the rich farmers and businessmen. They may constitute around 5 per cent of the population.

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The next level belongs to those with a regular income and the base of the pyramid is occupied by the vast majority of the people who are daily wage labourers. So we cannot say that the urban-rural divide has melted. It is still there. But there is hope with the growing emphasis on education. How would you categorise different parts of rural India? In India, we have the developed rural India and undeveloped rural India. Punjab, Haryana, Tamil Nadu, Andhra Pradesh, Kerala and parts of Maharashtra come under the developed rural India but the rest of the states are undeveloped where power, infrastructure, etc are big problems. The prosperity of Kerala has come from the NRI income and not from agriculture. Today, there is hardly any village in Kerala. Tamil Nadu is prosperous as power and good roads are available. All the villages with proper infrastructure have developed. In such villages, people also have better access to towns and cities. What are the major reasons for the change in the lifestyle of the developed rural India? Television has done wonders to rural India. Today, especially in the south, the penetration of satellite television is very high, which is around 50 per cent unlike 25-30 per cent in the rest of the country. \ These people may not be literate in the true sense but they know what is happening around the world because of television. They know how the rest of the country live. Do you television is driving the aspirations of rural India? Definitely, the rural youth today is an important trigger in changing the profile of rural India. About 40 per cent of the graduates coming out of Indian universities today are from mofussil areas. And, they are all doing very well.

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Their aspirations are similar to the urban youth, and it gets reflected in their eagerness to earn more and live better. So, if there is a problem in agriculture, they do something else. They ensure that they have steady flow of income. It has been reported that by 2009-10, the number of urban households is projected to grow by 4 per cent, while rural households are expected to grow by 11 per cent. Does this mean developmental initiatives are reaching rural India? The total expenditure of urban India is almost equal to what has been spent by rural India. But what is being spent by urban India is being done by only a small percentage of the population. About 25 per cent of the urban India is spending as much as 75 per cent of what rural India is spending. This shows the potential exists in rural India. There is a huge market waiting to be tapped in rural India. So the corporate world cannot ignore rural India? Yes, they cannot afford to ignore rural India. Unfortunately, they are only talking about it, they are not investing enough to get the maximum mileage out of it. For them, rural India is an unknown entity even today, and it calls for a lot of investment. Initially, the ratio between investment and returns will not be the same as you see in urban India. For urban India, one television spot is enough but it's not so in rural India. You have to slog it out there. But eventually, you will get the returns. In today's corporate world, all the managers, especially those working in the MNCs depend on their quarterly results. They only look at what gives them immediate success. Freebies have no meaning in rural India. You have to give value for money for the brand you are selling. How long can the corporate world ignore rural India? You will not be able to survive without rural India in future. One company that conquered the rural market 50 years ago and has consistently ruled is Hindustan Lever.

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About 50-55 per cent of their sales come from the rural market. Even today, they are constantly innovating and improvising. And Hindustan Lever is marketing directly in the rural markets. The success of Cavin Kare has become a very notable case study. It is a company that began in a small way. It started the Chic shampoo sachet for 50 paise when shampoo was available at Re 1, and it revolutionised the market. The sachet pack itself was a novel way of attracting the rural market. Now, it has conquered the rural market all over India. They are giving a run for Hindustan Lever's investments, as they have understood the local market very well and communicate in their language. Now, Maruti is also seriously looking at rural India. According to a report, between June 2002 and December 2003, rural per capita consumption expenditure grew by 11.5 per cent while the urban expenditure grew by 9.6 per cent. What are your comments on this? Yes, there is a tremendous potential for consumer durables like television sets, refrigerators, air-conditioners and household appliances in rural India. After the basic needs of food, cloth and shelter, they are looking at how to live better. Television is the most sought after consumer item in rural India followed by two wheelers. Gradually, they are moving to small cars like Maruti and that's what Maruti is trying to exploit.

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RURAL MARKETING-CHALLENGES AND OPPORTUNITIES

The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc. The success of a brand in the Indian rural market is as unpredictable as rain. It has always been difficult to gauge the rural market. Many brands, which should have been successful, have failed miserably. More often than not, people attribute rural market success to luck. Therefore, marketers need to understand the social dynamics and attitude variations within each village though nationally it follows a consistent pattern. While the rural market certainly offers a big attraction to marketers, it would be naive to think that any company can easily enter the market and walk away with sizable share. Actually the market bristles with variety of problems. The main problems in rural marketing are: Physical Distribution Channel Management Promotion and Marketing Communication The problems of physical distribution and channel management adversely affect the service as well as the cost aspect. The existent market structure consists of primary rural market and retail sales outlet. The structure involves stock points in feeder towns to service these retail outlets at the village levels. But it becomes difficult maintaining the required service level in the delivery of the product at retail level.

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One of the way could be using company delivery vans 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. However, only the bigwigs can adopt this channel. The companies with relatively fewer resources can go in for syndicated distribution where a tie-up between non-competitive marketers can be established to facilitate distribution. As a general rule, rural marketing involves more intensive personal selling efforts compared to urban marketing. Marketers need to understand the psyche of the rural consumers and then act accordingly. To effectively tap the rural market a brand must associate itself with the same things the rural folks do. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriad rituals, celebrations, festivals, melas and other activities where they assemble. One very fine example can be quoted of Escorts where they focussed on deeper penetration .In September-98 they established rural marketing sales. They did not rely on T.V or press advertisements rather concentrated on focussed approach depending on geographical and market parameters like fares, melas etc. Looking at the kuchha roads of village they positioned their mobike as tough vehicle. Their advertisements showed Dharmendra riding Escort with the punchline Jandar Sawari, Shandar Sawari. Thus, they achieved whopping sales of 95000 vehicles annually. One more example, which can be quoted in this regard, is of HLL. A year back HLL started Operation Bharat to tap the rural markets. Under this operation it passed out lowpriced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to twenty million households. Thus looking at the challenges and the opportunities which rural markets offer to the marketers it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage.

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Case Study
CASE STUDY 1 : ITC E-CHOUPAL

ITC e-Choupal, the single-largest IT-based intervention by a corporate in rural India, has already received several national and international accolades as a unique transformation model for rural India. ITC e-Choupal empowers over 3.5 million farmers by enabling them to readily access crop-specific, customized and comprehensive information in their native village habitat and language. Vernacular websites relating to each agricultural crop that ITC deals in, created by the company, provide ready and real-time information to even marginal farmers on the prevailing Indian and international prices and price trends for their crop, expert knowledge on best farming practices, and micro-level weather forecast. This significantly improves the farmer's decision-making ability, thereby helping him better align his agricultural produce to market demand, secure better quality, productivity and improved price discovery. The e-Choupal model and movement helps aggregate demand by creating a virtual producers' co-operative, thus facilitating access to higher quality farm inputs at lower costs for the farmer. ITC e-Choupal also creates a two-way direct marketing channel for rural India, eliminating wasteful intermediation and multiple handling, thus significantly reducing transaction costs and improving logistical efficiency. 39

Milestones: Commencement of initiative: 2000 States covered: 9 Villages covered: 36,000 e-Choupal installations: 6400 Empowered e-farmers: 3.5 million Agenda for the next decade: States to be covered: 15 Villages to be covered: 100000 e-Choupal to be installed: 20,000 Farmers to be e-empowered: 10 million Recent awards: The Stockholm Challenge 2006. This award is for using information technology for the economic development of rural communities. Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations category for business organizations. BREAKING DOWN BARRIERS TO COMMUNICATION: In the above example ITC worked hard to create interface in farmers native language, Hindi. It also provided software that made it possible to type Hindi characters using a standard an English keyboard the reason for this is that combining vowels and consonants to create Hindi letters is a very cumbersome affair on the keyboard. The newly found advantages are the building blocks of the market economy: transparency of the information, universal access, dialogue among various thematic communities that form autonomously and a discussion of the risk and benefits of various courses of action these four building blocks are dialogues, access, risk benefits and transparency these are the same building blocks that are leading to more consumer activism in developed markets.

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CASE STUDY 2 : HLL PROJECT SHAKTI & I-SHAKTI

Shakti is HLL's rural initiative, which targets small villages with population of less than 2000 people or less. It seeks to empower underprivileged rural women by providing incomegenerating opportunities, health and hygiene education through the Shakti Vani programme, and creating access to relevant information through the i-Shakti community portal. In general, rural women in India are underprivileged and need a sustainable source of income. NGOs, governmental bodies and other institutions have been working to improve the status of rural women. Shakti is a pioneering effort in creating livelihoods for rural women, organized in Self-Help Groups (SHGs), and improving living standards in rural India. Shakti provides critically needed additional income to these women and their families, by equipping and training them to become an extended arm of the company's operation. Started in 2001, Shakti has already been extended to about 80,000 villages in 15 states Andhra Pradesh, Karnataka, Tamilnadu, Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Uttar Pradesh, Rajasthan, Punjab, Haryana, West Bengal, Orissa, and Bihar & Jharkhand. The respective state governments and several NGOs are actively involved in the initiative. Shakti already has about 25,000 women entrepreneurs in its fold. A typical Shakti entrepreneur earns a sustainable income of about Rs.700-Rs.1000 per month, which is double their average household income. Shakti is thus creating opportunities for rural women to live in improved conditions and with dignity, while improving the overall standard of living in their families. In addition, it

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involves health and hygiene programmes, which help to improve the standard of living of the rural community. Shakti's ambit already covers about 15 million rural populations. Plans are also being drawn up to bring in partners involved in agriculture, health, insurance and education to catalyze overall rural development.

HLL's vision for Shakti is to scale it up across the country, covering 100,000 villages and touching the lives of 100 million rural consumers by 2007. Shakti Vani is a social communication programme. Women, trained in health and hygiene issues, address village communities through meetings at schools, village baithaks, SHG meetings and other social foray. In 2004, Shakti Vani has covered 10,000 villages in Madhya Pradesh, Chattisgarh and Karnataka. The vision is to cover 80,000 villages in 2007. I-Shakti, the Internet-based rural information service, has been launched in Andhra Pradesh, in association with the Andhra Pradesh Government's Rajiv Internet Village Programme. The service is now available in Nalgonda, Vishakapatnam, West Godavari and East Godavari districts. I-Shakti has been developed to provide information and services to meet rural needs in medical health and hygiene, agriculture, animal husbandry, education, vocational training and employment and women's empowerment. The vision is to have 3,500 kiosks across the state by 2007.

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WOMEN ARE CRITICAL FOR DEVELOPMENT: A well understood but articulated reality of development is the role of women. Women are central to the entire development process they are also at the van guard of social transformation. For eg: Gameem Banks success is based on leading only to women. The entrepreneurs who were able to use the microfinance made available were women the grameen phone ladies are the entrepreneurs. INNOVATION: HLL-ANNAPURNA SALT

More than 70 million Indian children suffer from iodine deficiency disorder (IDD), which can lead to mental retardation. A total of 200 million are at risk. IDD in many parts of Africa is equally daunting. The primary source of iodine for most of Indians is salt. 75 % of the Indian rural markets are ruled by unbranded salt which has lack of iodine. HLL saw this as an opportunity and came up with Annapurna salt (iodine-rich salt) which solved the problems of iodine deficiency. HLL incurred huge cost on educational campaigns to educate people about its product and its advantages. The result is, Annapurna is one of the largest selling salt in the BOP markets. Unilever is also leveraging this innovation from HLL to other countries such as Ghana, Ivory Costa & Kenya where IDD is a problem.

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CASE STUDY 3 : HLL- Health & Hygiene Education LIFEBUOY SWASTHYA CHETANA

It has been developed around the insight that people mistakenly believe "visible clean is safe clean". The programme establishes the existence of "invisible germs" and the associated risk of infection. In India this is important, because diarrhoea, caused by invisible germs, is the second largest cause of death among children below the age of 5. The project will help reduce incidence of such diseases, by raising awareness of preventive hygienic practices. The campaign has been divided into various phases. In the initial phase, a Health Development Facilitator (HDF) and an assistant initiates contact and interacts with students and influencers of the community, like village community representatives, medical practitioners, school teachers etc. A number of tools like a pictorial story in a flip chart format, a "Glo-germ demonstration", and a quiz with attractive prizes to reinforce the message are used. The "Glo-Germ demonstration" is a unique tool to make unseen germs visible and emphasize the need to adopt hygienic practices. The first interaction with students is then replicated with the rest of the community. Subsequently, follow-up visits and communication are undertaken at periodic intervals which reinforce the message and learnings. Started in 2002, the programme has as of now covered about 15000 villages in 8 states Uttar Pradesh, Bihar, Jharkhand, West Bengal, Orissa, Madhya Pradesh, Chattisgarh and

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Maharashtra; it has already touched about 70 million people, imparting hygiene education to over 25 million children. The vision of this on-going project is to make a billion Indians feel safe and secure by focusing on their health and hygiene needs.

CASE STUDY 4 : NIRMA

Nirma Limited markets its products through its fully owned subsidiary Nirma Consumer Care Limited (NCCL), which was incepted in 1985. NCCL in turn resells these products in the market under the umbrella brands NIRMA and NIMA along with extensions. Nirma was started by Mr.karshanbhai Patel. It started selling Nirma powder at Rs. 3.50 per kg. At that time lowest detergent cost Rs. 13, so Nirma had advantage over its competitors because of its low cost and quality product. Nirma started by selling 15-20 packets a day and now it is selling around 18000 tonnes of detergent a year. Because of this HLL lost its market share and to compete with Nirma it launched Wheel. So a small brand Nirma had shattered HLL. The distribution strength of Nirma : 350 sales force 400 distributors Over 1 million retailers

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All NIRMA and NIMA range of products have a retail reach of over two million retail outlets and more than 300 million loyal consumers spread all over the country. The Company has been successful in establishing an extremely good urban as well as rural presence. The Distribution channel is geared up to enhance trade relations, build up the retailer base by providing various benefits and incentives, organize and implement different activities to generate sales and manage numerous other programmes, schemes and activities concentrated towards business development. It is currently enjoying 35% market share. CONCLUSION: These were some of the companies that helped in social and economical transformation in BOP markets. These companies innovated their products/services and catered successfully to BOP markets, providing them with income generating opportunities and solving their problems, thereby earning huge profits.

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Bibliography
Rural Marketing by M.Ahmed CIA website of world facts boo The Fortune at The Bottom of the Pyramid - Myth or Reality - C.K.PRAHALAD Web sites : www.hll.com www.itc.com www.nirma.co.in www.Google.com www.Wikipedia.com

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