Rural Marketing Project Ver2

Exploring the growing Indian Rural Market
Project Report On Exploring the growing Indian Rural Market
Submitted by
Abhijeet H. Raul
MMM Semester V
Roll No. 77
Under the Guidance of Professor Shailesh Kale
In partial fulfillment of Masters in Marketing Management Course University of Mumbai (2009-2012)
S. P. Mandali's Prin. L. N. Welingkar Institute of Management Development & Research Matunga, Mumbai - 400 019.
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Certificate from Guide

This is to certify that the project entitled " Exploring the growing Indian Rural Market" is successfully done by Mr. Abhijeet Raul during the Third year of his/her course MMM (2009 2012) in partial fulfillment of the Masters Degree in Marketing Management under the University of Mumbai through the Prin. L. N. Welingkar Institute of Management Development & Research, Mumbai 400 019. This project represents the work done by Mr. Abhijeet Raul. This project in general is done under my guidance.
Date: ______________
Signature of the Project Guide
Name of the Project Guide Address :
Professor Shailesh Kale S. P. Mandali's Prin. L. N. Welingkar Institute of Management Development & Research, Matunga, Mumbai - 400 019.
Mobile No. Email ID
+91 98197 45659 : shaileshkkms@gmail.com
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SYNOPSIS
NAME OF THE STUDENT PROGRAM AND YEAR ROLL NUMBER AREA OF SPECIALISATION NAME OF THE GUIDE TITLE OF THE PROJECT Rural Market. PROJECT DETAILS (A) OBJECTIVE OF STUDY : The main objective of the study is to analyse and present the marketing of consumer products in rural areas. : : : Abhijeet H. Raul MMM 09-12 77 : : : Marketing Prof. Shailesh Kale Exploring the growing Indian
(B) RESEARCH METHODOLOGY Magazines
Primary - Questionnaire Survey
Secondary- Internet / News Papers /
EXPECTED RESULTS OF THE STUDY : To know the importance of rural marketing and to understand how it different from urban and also to understand various steps involved in sales and marketing of products and services in rural areas.
Guide's Signature
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Student's Signature
Acknowledgements
This project has been a great learning experience for me and I would like to thank Professor Shailesh Kale, my project guide for his guidance and support in this project. This project has given me the chance to analyze the marketing of consumer products (FMCG) in rural areas. I would like to express my gratitude to all my professors for sharing their knowledge and helping me develop the skills that would be required for managing people and resources. I also thank each and everyone, who shared their valuable information, for me to have better understanding of the system, subject and concepts which contributed immensely in the completion of this project. Last but not the least with due respect I would like to thank my family for providing me guidance whenever required.
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Index
Contents Executive Summery Research Methodology Introduction Rural India Powering Economic Growth Profile of Rural Market What Makes Rural Markets Attractive Need for Rural Marketing Challenges in Rural Marketing Rural Consumer Behavior Rural Market Segmentation Strategies to capture Rural India Product Strategies Pricing Strategies Promotion Strategies Distribution Strategies PAGE NUMBER 6 8 10 18 21 24 30 32 33 36 38 42 43 44 45 50 53 63 63
Rural marketing initiatives Findings and Analysis Suggestions and Recommendations Bibliography
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EXECUTIVE SUMMARY
Indias way is not Europes. India is not Calcutta and Bombay. India lives in her seven hundred thousand villages.....................Mahatma Gandhi, 1926 Marketing in developing countries like India have often been borrowed from the western world. Concepts like Brand identity, Customer relationship management, 4 Ps of the marketing mix, Consumer behavior process; Segmentation, targeting and positioning etc. have often been lifted straight from the marketing intelligentsia abroad and adopted in Indian conditions, often with minimal success. Reason lies not in the fault of such concepts, but their integration with the Indian ethos and culture. The rural India offers a tremendous market potential. Nearly two-thirds of all middle-income households in the country are in rural India and represents half of Indias buying potential. Despite, the strong potential the rural markets are by and large less exploited. Consider the market, out of five lakhs villages in India only one lakh have been tapped so far. According to us if the rural market has to be adequately tapped, there has to be a change in the way marketing concepts learnt in Bschools with adequate adoption according to scenarios prevalent in rural India. The paper thereby present the modified version of Philip Kotlers famous marketing mix consisting of 4Ps. The focus is on its modification and subsequent customization to Indian rural markets perspective. The 4Ps have to be modified to include 1P i.e. Packaging and 1R i.e. Retailer as special focus areas. Further to ensure the sustainability of the marketing mix two Es i.e. Education and Empowerment have to be at the core as they help in generating widespread participation from the rural clientele by enhancing their standard of living. The Products in the rural market should essentially operate at the basic and expected level of product classification. They should essentially meet the basic needs of the consumer and should be a no-frill product, as the consumer would not be valuing much any further addition to the product concept. Companies also face a daunting task in communicating about their products to the
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consumer due to lack of literacy and failure of traditional media to penetrate in the rural households. Hence, the advertising mix has to be more towards nonconventional yet effective medium like Puppetry, Folk Theater Song, Wall Painting, Demonstration, Posters, Agricultural Games, NGOs network, etc. Thus overall either the product or communication or preferably both need to be customized to target the rural customer. In terms of physical distribution due to lack of infrastructure the costs are very exorbitant to reach the rural customer. Thus, mediums like rural marketing vehicles and melas and haats provide better opportunities to meet customer needs. Also the existing distribution would need a transformation to achieve the required penetration levels as success of Project Streamline of HLL has shown. Since, the value for money concept is more important rural customers, there has to be an approach of treating customer as budget seeking consumer. Here, fitting the consumer needs into an affordable price point is pursued first and then other features of product are fitted in. Similarly, packaging has to meet customer needs of better brand recall and introducing favorable price points. At the same time the importance of retailer has to be recognized where he is one of the most major influencer is customers decision making process. He acts as the friend and guide in this process and hence, needs to be managed effectively through promotion programmes and incentives to promote the brand of a company. In order to bridge the gap between Philip Kotler and countryside Indian what is needed the appreciation of unique features of rural India and thus, responding to them by making adequate improvements in the application of the marketing concepts learnt in the class. For achieving the desired results of capturing the rural customer a comprehensive approach to the traditional marketing concepts has to be taken. This marketing mix has to be responsive to customers needs and fit into his life as a tool of self-enhancement. To be successful the concept of marketing has to be taken in conjunction with its economic, psychological and social implications.
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RESEARCH METHODOLOGY OBJECTIVES OF THE STUDY:

Any task without sound objectives is like Tree without roots. Similarly in case of any research study undertaken, initially the objectives of the same are determined and accordingly the further steps are taken on. A research study may have many objectives but all these objectives revolve around one major objective which is the focus of the study. In this study, the focus is on the emergence of rural markets as the most happening market on which every marketer has an eye. And so this study will be based on studying the emergence of rural market in various contexts. The main objective of the study is to analyse and present the marketing of consumer products in rural areas. The following objectives have been set forth. They are to: 1) 2) 3) 4) 5) 6) Present a rural marketing perspective. Present a profile of Indian Rural market. Study and analyse the consumer behavior in rural areas. Examine the product and brand penetration in rural markets. Analyze marketing of consumer product in rural markets. Present marketing strategy frame for marketing consumer products in rural areas.
SCOPE OF THE STUDY:

The study is restricted to selected Villages of Karnataka. Further, product and brand penetration is examined. As regards marketing of consumer products in rural areas, the study analyzes products from FMCG category (a bathing soap, detergents, tea, coffee, shampoo).
Data collection
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Sample unit: 1. Working people (including men &women), basically farmers. 2. College students 3. Senior citizen
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Sample size: 1. Working people: 55% 2. College students: 29% 3. Senior citizens : 16%
Sampling region:
1. I have selected Karnataka as the area of study.
The population status of these areas can be shown in a tabulated manner, which is given as follows:
Area Population: State Karnataka Dist Haveri Hirabendigiri Byad Shiggaon Harihar 4256 3256 8200 4278
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INTRODUCTION
India lives in her villages. As described by Adi Godrej, Chairman, Godrej Group The rural consumer is discerning and the rural market is vibrant. At the current of growth, it will soon outstrip the urban market. The rural market is no longer sleeping but we are. Before gamboling into issues like where the Indian rural market stands and the opportunities for corporates to explore there... let's look at the definition of urban and rural India. The Census defined urban India 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 India, on the other hand, comprises all places that are not urban!"
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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 8 to 9 percent. 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 color 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. Now for some facts and figures The Indian rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. Hindustan Lever Limited (HLL) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin of HLL's strategy has been to focus on penetrating the market down the line and focusing on price point. Furthermore, activating the brand in the rural market through activities, which are in line with the brand itself, is what sums up HLL's agenda as far as the rural market is concerned informs MindShare Fulcrum general manager R Gowthaman. Amul is another case in point of aggressive rural marketing. Some of the other corporates that are slowly making headway in this area are Coca Cola India, Colgate,
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Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.
Khaitan fans' ad on a horse cart
Wheel's painting
wall
We can safely say that 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. While, this is definitely changing, the process is slow. The greatest challenge for advertisers and marketers continues to be in finding the right mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad campaign succeeded in providing just that.
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Life buo y's wal l pai nti ng in rur al Indi a
Corporates are still apprehensive to "Go Rural." A few agencies that are trying to create awareness about the rural market and its importance are Anugrah Madison, Sampark Marketing and Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M Outreach, Linterland 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.
Interestingly, the rural market is growing at a far greater speed than its urban counterpart. "All the data provided by various agencies like NCAER, Francis Kanoi etc shows that rural markets are growing faster than urban markets in certain product categories at least. The share of FMCG products in rural markets is 53 per cent, durables boasts of 59 per cent market share. Therefore one can claim that rural markets are growing faster than urban markets," says Sampark Marketing and Advertising Solutions Pvt Ltd managing director R A Patankar.
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Coca-Cola India tapped the rural market in a big way when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The company, on its behalf, has also been investing steadily to build their infrastructure to meet the growing needs of the rural market, which reiterates the fact that this multinational has realised the potential of the rural market is going strength to strength to tap the same.
Clearly the main challenge that one faces while dealing with rural marketing is the basic understanding of the rural consumer who is very different from his urban counterpart. Also distribution remains to be the single largest problem marketers face today when it comes to going rural. "Reaching your product to remote locations spread over 600,000 villages and poor infrastructure - roads, telecommunication etc and lower levels of literacy are a few hinges that come in the way of marketers to reach the rural market," says MART managing director Pradeep Kashyap. Citing other challenges in rural marketing, Patankar says, "Campaigns have to be tailor made for each product category and each of the regions where the campaign is to be executed. Therefore a thorough knowledge of the nuances of language, dialects and familiarity with prevailing customs in the regions that you want to work for is essential. The other challenge is the reach and the available means of reaching out to these markets, hence the video van is one of the very effective means of reaching out physically to the rural consumers." The fact of the matter remains that when compared to the Indian urban society, which is turning into a consumerism society; the rural consumer will always remain driven by his needs first and will therefore be cost conscious and thrifty in his spending habits. "Decision-making is still
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"Yaara da Tashan..." McCann Erickson's ads with Aamir Khan created universal appeal for Coca Cola
conscious and deliberated among the rural community. But nevertheless, the future no doubt lies in the rural markets, since the size of the rural market is growing at a good pace. There was a time when market predictions were made on the basis of the state of the monsoon but this trend has changed over the years; there is a large non farming sector, which generates almost 40 per cent of the rural wealth. Hence the growth in the rural markets will be sustained to a large extent by this class in addition to the farmer who will always be the mainstay of the rural economy," affirms Patankar. "Although the melting of the urban - rural divide will take a while, this is not for want of the availability of the means but for want of the rural consumer's mindset to change; which has its own logic, which is driven by tradition, custom and values that are difficult to shed," he points out.
Satellite dish antennas reach rural India
Fulcrum's Gowthaman says, "The biggest impending factor or deterrent on rural monies going up is that there is a general sense of trying to benchmark cost per contact (CPC). The television CPC is going to anyways be cheaper to rural CPC and unless and until the volume - value equation turns the other way round, you will not be able to spend disproportionate monies in the rural market." For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in giving the consumers a trial opportunity. While it does help in generate volume but not in terms of values. "Till the time that volume - value equation is managed better, the CPC is preventing
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anybody to look at rural at a large scale activation programme," reiterates Gowthaman. Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactivity. Anugrah Madison's chairman and managing director RV Rajan sums up, "There is better scope for language writers who understands the rural and regional pulse better. I also see great scope for regional specialists in the areas of rural marketing - specialists like Event Managers, Wall painters, folk artists, audio visual production houses. In fact all those people who have specialised knowledge of a region are bound to do well, thanks to the demands of the rural marketers." So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by some, but there seems to be a long way for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so back. Things are sure a changing!
1.1
Defining Rural India:

Organisati on NSSO ( Census) Definition Limitations
Population density < 400 / Rural not defined Sq Km 75 percent of the male working population is engaged in agriculture No Municipal corporation / board Towns upto 15,000 Town characteristics not population are considered defined rural
Planning Commission
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NABARD
All locations with a Village & town population upto 10, 000 characteristics not defined considered rural Location with population It does not include 10,000 upto 10,000 to 1, 00,000 as + population villages in semi urban. rural definition On the contrary, the definition includes 5,000 10,000 population towns in rural.
Reserve Bank India
of
LG Electronics
All places other than the 7 Only clarifies what are the metros cities
Sahara
Commercial establishments Population characteristics located in areas servicing unknown less than 1000 population
Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S (2007)
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Defining Rural Marketing:
According to Prof. Ramkishen Y, Director, RAMKI CONSULTS, Mumbai & Professor at k.j.somaiya institute of management studies and research Rural marketing is the process of developing, pricing, promoting, distributing rural-specific goods and services, leading to exchanges between urban and rural markets, which satisfies consumer demand and also achieves organizational objectives. Let us understand this definition and its implications: -Rural marketing involves a two way marketing process. Every want is backed by an ability and willingness to buy. These are known as demands. Marketers are now trying to satisfy the
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rural demands by customizing the products and manufacturing the products as per the demand.
National Commission on Agriculture
NGOs
Corporate Rural Marketing Definition
Decisions to produce saleable farm commodities involving all the aspects of the market system or structure, both functional and institutional, based on technical & economic considerations and includes the pre & post harvest operations.
Marketing products produced in rural areas to urban areas Marketing products produced in rural areas in rural markets
Function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organisational goals.
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Meaning: 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. URBAN RURAL
RURAL
URBAN
RURAL
RURAL
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It is a two-way marketing process wherein the transactions can be:

1. Urban to Rural: A major part of rural marketing falls into this
category. 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: Transactions in this category basically fall under
agricultural marketing where a rural producer seeks to sell his produce in an urban market. An agent or a middleman plays a crucial role in the marketing process. The following are some of the important items sold from the rural to urban areas: seeds, fruits and vegetables, milk and related products, forest produce, spices, etc.
3. Rural to Rural: This includes the activities that take place between
two villages in close proximity to each other. The transactions relate to the areas of expertise the particular village has. These include selling of agricultural tools, cattle, carts and others to another village in its proximity. 1.2 Sr. No 1 Phases in Rural Marketing: Time Frame Key Events & Trends Phase One (Pre 1960s) Marketing rural products in rural and urban areas Agricultural inputs in rural areas Agricultural marketing Farming methods were primitive and mechanisation was low Markets unorganized Green Revolution Companies like Mahindra and Mahindra, Sri Ram Fertilisers and IFFCO emerge Rural products were also marketed through agencies like KVIC Demand for consumables and durables rise Companies find growth in urban markets stagnating or falling
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Phase Two (1960s to 1990s)
Phase Three (1990s Present)
to
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1.2
Thoughts of famous personalities:
The future lies with those companies who see the poor as their customers CK Prahalad to Indian CEO's, Jan 2000 Theres going to be extremely high rural consumption growth. Now, the question is how does India and its policy makers leverage this rural consumption to get broader growth aver all by Anand Mahindra Vice chairman M&M. People in rural India now aspire to buy all the good things their urban counterparts have enjoyed by Sunil Bharti Mittal, chairman of Bharti Group. To get rich, sell to the poor. Pradeep Kashyap,founder and MD MART "What I learnt at management school was of no use in these areas. It's the field experience that counts" Prof. Trivedi
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No . 1 2 3 4 5 6
Rural Vs Urban Marketing:

Aspects Philosophy Market Demand Competition Literacy Income Needs Urban Marketing concept High Organized Sector High High High level & Social Rural Development marketing Low Unorganized Sector Low Low Low level & Relationship
Adoption Product a) Awareness
Faster High
Slow Low
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b)Concept
Known
Unknown
c)Quality
Good
Moderate
Price a)Sensitive
Yes
Very much
b)level desired
Medium-high
Medium-low
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Transportation Advertising
Good Print, audio outdoors. etc visual,
Average TV, Radio, print media in many languages
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Personal selling
Door-to door, frequently
Occasionally
02:Rural India powering economic growth

Some facts and Figures: Living Pattern: 620 million of the population still lives in more than half a million Indian villages. Over 60 per cent of Indians will still live in villages by 2025.
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Sou rce: MART
Size of the rural markets (fig in Crore) FMCG Rs.65,000 Agri-Inputs Durables Automobiles (2 & 4 Wheelers) Clothes, footwear etc. Construction material Total
Source : CII Report (2008)
Rs.45,000 Rs. 5,000 Rs.8,000 Rs.35,000 Rs.15,000 Rs.173,000
In 2000-01, LIC sold 55 % of its policies in rural India. Hindustan Unilever (HUL) is one of Indias largest FMCG companies. About 30 percent of its revenues come from rural
sales.
Hero Honda, the worlds largest manufacturer of two-wheelers, generates over 40 percent of sales from rural areas. Based in Korea, LG is the worlds leading manufacturer of consumer electronics. India, the companys largest market in the Asia Pacific region, generated 35 percent of the companys India revenues from rural sales. Of two million BSNL mobile connections, 50% in small towns/villages
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Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT) 41 million Kisan Credit Cards issued (against 22 million creditplus-debit cards in urban) with cumulative credit of Rs 977 billion resulting in tremendous liquidity. Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns on Rediff online shopping site 42 million rural HHs availing banking services in comparison to 27 million urban HHs. Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in urban The Indian food industry, now valued at $181 billion, is estimated to grow to $258 billion by 2015, according to a report by consulting firm Ernst & Young and Industry body Ficci. The government has directed regional rural banks (RRBs) to collectively open a whopping 1,600 branches this fiscal, 60% more than commercial banks opened in rural areas in FY11.The move aims at accelerating banking penetration in rural and semiurban centres.(ET-17,Oct,2011) MYA, short for Moksha Yug Access ,is building a network of collection centers for fresh milk across southern Karnataka, has raised Rs 12 crore in two previous rounds, apart from debt funding of over Rs 3 crore to kick-start a supply chain, will raise a total of Rs 25 crore in the upcoming round from a global pool of wealthy individuals, including Vinod Khosla, one of the worlds most successful venture capitalists. Aggregate Rural consumption (In Rs. 1985 1995 2005 (Estimate ) 449 609 968 Compound Annual Growth Rate 3.9% 000 Crores) 2015 (Projected) 1670
2025 (Projected) 2648
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Compound Annual Growth Rate 5.1%

Source: The Marketing White Book (2007-08) Business world Dec2007
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National Highway Projects (In km) projected as on Sep 21,2011.
Source: DNA Money-11 Oct, 2011.
FMCG Rural market share as percent of all India market
Source: National Council for Applied Economic Research (NCAER)
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AutomobileShare of rural market as a percent of all India market
Sou rce: Edelweiss Research
Total teledensity(ownership per hundred population)
September 2009
Source: Telecom Regulatory Authority of India (TRAI) *data for the period April 2009 to
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03: Profile of Rural markets

It is said that mother India lives in her villages. There are about six lakh villages and over 70% of population lives in these villages. From a food deficit nation in the mid 60s, our country became self-sufficient in food production in 1971 and we are now exporting agricultural produce to other countries. Further there are has been shift from an agriculture economy to manufacturing and service economy and this development has resulted in increase in job opportunities, income and demand for goods and services in rural markets. How rural consumers are different from urban: Criteria Occupations Rural World Urban World
People engaged in People engaged in agriculture and related manufacturing, trade activities. ,commerce and other non-agriculture activity . Direct nature. Lower. relationship to Greater isolation from nature and man-made environment . Greater.
Environment
Density of Population Heterogeneity/Homog eneity Mobility
Homogeneous in racial and More heterogeneous. psychological traits. Migration from Rural-Urban. Migration from one country to another in rare case. Impersonal casual relations, superficial, standardized formality of relations.
System of Interaction
Fewer contact with outside world. Simplicity in relations. Speaks through the heart.
Characteristics & Dynamics of Indian Rural Markets
Geographical Diversity: The rural market of India is a geographically scattered market. While the urban population of
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India is concentrated in 3200 cities and towns, the rural population is scattered across 5,93,145 villages. And of them, only 18758 villages, or less than 3.50 per cent have a population of more than 5000 each. Distribution of Villages in India (2001) Population Less than 200 200 499 500 990 1000 1999 2000 4999 5000 and above Total No. of Villages 92541 127054 144817 129662 80313 18758 593145 % of Villages 15.60 21.40 24.40 21.90 13.50 3.20 100.00 Total % of Population 1.20 5.90 14.50 25.90 37.50 15.00 100.00
Source: Census of India 2001.
Socio-economic positioning: By and large ,rural consumers continue to be marked by low purchasing power /low per capita income. Similarly, they continue to be tradition bound community, with religion, culture and tradition strongly influencing their consumption habits. A sizeable segment of rural consumers defy this description. Nearly 60% of rural income comes from agriculture. More than half the household are in the income category of less than Rs 25000 per annum, but about 14% of the households have an annual income that exceeds Rs 50,000 per annum. Cultural Diversity and Heterogeneous market: The diversity is manifest in a more intense manner among the rural segments. It can be said that heterogeneity is the no. 1 hall mark of the rural markets 5,70,000 villages, half dozen religion,33 languages, 1,650 dialects and diverse sub-cultures characterize the market. Variable development: There is also a good amount of difference between different states in extend of development. A recent study conducted by IMRB provides development index points for each states, after collecting village level data on various parameters,
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such as availability of health and education facilities and availability of public transport, electricity, TV transmission, banks, post offices, water supply and so on. According to the study, while the average village in India has 33 development index points, villages in Kerala has an average of 88 points while those in Bihar had just 22;M.P,Rajasthan and UP were close to Bihar; and state like Maharashtra, Karnataka ,Haryana had points ranging between 40 and 50. Literacy Level: It has been estimated that rural India has literacy rate of 28 percent for the whole country. The rate is certainly on the low side. However, such statistics do not reveal the whole picture. The adult literacy programmes launched in the rural areas are bound to enhance the rural literacy rate in the year to come. In absolute numbers, already there are more literate people in rural India (16.5) in urban India (16 crore). Literacy Levels (%) Years Gender 1 2 Male Female 1971 Rur 34 13 24 Urb 61 42 52 1981 Rur 41 18 30 Urb 66 48 57 1991 Rur 58 31 45 Urb 81 64 73 2001 Rur 71 47 59 Urb 87 73 80
Total
Source: Census of India 2001.
Lifestyle: By and large, the rural consumers are marked by a conservative and tradition bound lifestyle. But, what is striking today about this matter is not basic conservative characteristic, but the fact that the life style is undergoing is significant change.
Rural Demand: A) Consumer Goods 1) Consumer Goods : A) FMCG-Foods: Tea, coffee, edible oil etc... B) FMCG-Non-Foods: Soap, oil, shampoo etc...
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C) Consumer durable: TV, sewing machine etc 2) Agriculture Inputs: Seeds, fertilizer, pesticide etc. 3) Agriculture Output: Grains, pulses, vegetables, fruits etc. 4) Others : Construction Materials, Transport equipments A) Services: Insurance, Banking, Health etc. FMCG Category and Product: Category
Household Care
Product
Fabric wash (laundry soaps and synthetic detergents); household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish) Health beverages; soft drinks; staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; soft drinks; processed fruits, vegetables; dairy products; bottled water; branded flour; branded rice; branded sugar; juices etc. Oral care, hair care, skin care, personal wash (soaps); cosmetics and toiletries; deodorants; perfumes; feminine hygiene; paper products.
Food and Beverages
Personal Care
04:What makes Rural Market Attractive

1) Large Population: The Rural Indian population is large and its
growth rate is also high. Over 70% Indias one billion plus population lives in around 6, 27,000 villages in rural areas. This simply shows the great potentiality rural India has to bring the much needed volumes and help the FMCG companies to bank upon the volume driven growth. Distribution of households and income (in %) Area Households Population Rural Urban All-India
Source: NCAER
72.6 27.4 100
74.6 25.4 100
2) Rural Prosperity: India is now seeing a dramatic shift towards
prosperity in rural households. As per the National Council for Applied Economic Research (NCAER) study, there are as many
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middle income and above households in the rural areas as there are in the urban areas. There are almost twice as many lower middle income households in rural areas as in the urban areas. Distribution of people income-wise Income 2001 -02 2006 -07 Groups Total Rural No. % Total Rural No. % High Middle Low Total 1.48 69.18 32.29 102.95 .41 4.83 29.52 74.76 27.7 64.8 91.42 72.6 2.96 90.25 20.41 114.52 .07 59.85 95.8 80.96 23.6 66.3 95.7 70.7
Source: NCAER According to NCAER projections, by 2006-07, the lowest income class will shrink by more than 60%. The higher incomes classes are likely to double by 2006-07.This apparently is the result of development work, which happened under the five years plans and other special programmes such as land reforms, rural electrification rural communication and rural credit facilities etc. According to Mr. D.Shivakumar, business Head(Hair), personal products division, HUL , the money available to spend on FMCG products by urban India is Rs. 49,500 crores as against is Rs. 63,500 crores in rural India. Manufacturing ,trade and construction are playing a big role in rural India. Rural Households in India
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Source: Market skyline of India Indicus Analytics
The 61st round of National Sample Survey (NSS) report 2004-05 on consumer expenditure in rural and urban areas reveals that the average monthly per capita consumption expenditure (average MPCE) in rural areas to be Rs 559, a bit more than half of urban India. The emerging pattern of rural consumption is now showing a near balance between the amount spent of food items and non-food
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items. While food items account for 55 per cent of the total consumption expenditure, non food items like fuel & light, clothing & footwear, education, medical, miscellaneous consumers goods, conveyance, other consumer services and durable goods accounted for 10,5,3,7,6,4,4 and 3 per cent respectively. 3) Size of Rural Markets: Many companies are actively promoting their product in rural areas and have achieved a higher percentage of sales in rural markets as shown below: Company wise sales Company Rural Sales (In %) HUL Colgate Hero Honda LG Cavin Kare Godrej Kinetic Cadbury Glaxo Marico Ranbaxy Cipla 50 50 40 40 35 30 30 25 25 25 17 18
Source: Economics Times -2004 (ET Intelligence Group Reports).
4) Development in Market: The purchasing power in rural India is on
steady rise and it has resulted in the growth of rural market. The market has been growing at 3-4% per annum adding more than one million new consumers every year and now accounts for close to 50% of volume consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than urban markets. In product categories like toilet soaps, talcum powder, cooking oil, vanaspati ghee, tea, cigarettes and hair oil, the share of rural market is more than 50%.
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Rural people Own Cars Colour Television Refrigerators Washing Machines
In % 29 27 24 10
Above figure points to the untapped potential in the rural areas.
5) Favorable Government Policies: The government has taken the
initiative for economic development of rural areas and through Five Year Plans have invested heavily in development of agriculture ,animal husbandry, irrigation, electricity, dairy and khadi and village industries and infrastructure facilities. In the 9th plan, total plan expenditure was Rs. 8,60,000 crores and out of this about 21% of the plan expenditure was allocated to agriculture and rural development as per table below 9th Five Year Plan Allocation Sr No 1 2 3 4 5 6 7 Sector Energy Sector Social Services Agriculture and Rural Development Transport Development Communication Industry and Minerals Science and Technology Total Government Spending in Rural: 1. Pradhan Mantri Gram Sadak Yojana (PMGSY):This is a scheme launched and fully sponsored by the Central Government of India. The main objective of the scheme is to connect all the % of total expenditure 25.90 21.30 20.50 13.90 5.50 7.60 5.30 100.00 plan
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habitations with more than 500 individuals residing there, in the rural areas by the means of weatherproof paved roads. 2. Swarnjayanti Gram Swarozgar Yojana (SGSY):This was implemented as a total package with all the characteristics of self employment such as proper training, development of infrastructure, planning of activities, financial aid, credit from banks, organizing self help groups, and subsidies. 3. Sampoorna Gramin Rozgar Yojana (SGRY):This scheme aims at increasing the food protection by the means of wage employment in the rural areas which are affected by the calamities after the appraisal of the state government and the appraisal is accepted by the Ministry of Agriculture. 4. Indira Awaas Yojana (Rural Housing):This scheme puts emphasis on providing housing benefits all over the rural areas in the country.
Source: Ministry of Rural Development @ http://rural.nic.in/
1) IT in Rural India: Today there are over 15 million villagers in India
who are aware of the Internet and over 300,000 villagers have used it! Ten years back, history was created with Public Call office phone booths , opening in every corner of the country. Over the next two years, WorldTel is expected to provide 1000 centres in Tamil Nadu with 2 to 20 terminals in each centre. If successful ,this experiments can be replicated easily to all 27 states leading to over a half million Internet users through this experiment alone !The existing 600,000 public cal offices in India will soon be transformed into public teleinfo-centres offering a variety of multimedia information services. If television could change the language of brand communication in rural India, affordable Web connectivity through various types of communication hubs will surely impact the currency of information exchange. As the electronic ethos and IT culture moves into rural India , the possibilities of change are becoming visible.
2) Role of FMCG Companies: It becomes amply clear that rural India
has to be the hot target in future for FMCG companies as it presents a plethora of opportunities, all waiting to be harnessed. Many of the FMCG companies are already busy formulating their rural marketing strategy to tap potential before competition catches up.
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3) Development in Agriculture: Agriculture contributes to about
20% of GDP of our country but over 70% of the rural population is depending on agriculture for their livelihood. The agriculture sector plays a major role in the Indian economy as it provides food grains to urban population and also supplies raw materials like cotton, sugarcane and labour force to industrial sector. Agriculture prosperity generates considerable demand for consumer goods in rural areas. The following initiatives have lead to growth and development of agriculture.
4)
Rising Aspiration of Rural: The rise in income coupled with increased awareness and the need for possessing modern goods have influenced the rural marketing environment in our country. Income Trends of Various Rural Market Groups Income Group (per 1985-86 (%) 20002006-07 Annum) 01(%) (%)* Projections High (Rs.1,00,000 + ) Upper Middle (Rs.70,000 100,000) Middle (Rs.50,000 70,000) Lower Middle (Rs.25,000 -50,000) Lower (Rs.25000) Total .30 .70 4.00 21.40 73.60 100.00 3.80 4.70 13.00 41.10 37.40 100.00 5.60 5.80 22.40 44.60 21.60 100.00
Source: NCAER 2000 (Indian Market demographic report)

5) Rural Tourism : Includes a range of activities, services and
amenities provided by rural people to tourists. Many urban people would opt for rural tourism since it provides an opportunity to go back to roots (villages) and be away from pressure of urban life.
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Rural tourism generates employment opportunities and increase in income for villages. SAVE farm house in Gholvad -District Thane , Saguna Bag in Nerul District Alibag are some examples of Rural tourism in Maharashtra.
6) Growth in Rural Income: The average income level has improved
due to modern farming along with supporting activity poultry, dairy. Rapid industrialization and growth in service sector migration of rural people into urban and remittance of their money. 7) Remittances from abroad: Many households in rural India have one of their family members abroad, mostly in Gulf countries. People working there send their savings to their families in India, which is an additional source of income.
05:Need for Rural Marketing

Presently, companies operating in India are left with only two options, i.e. either to go Global or to go Rural. The cost of going global is very high and also its tough to penetrate markets in other countries. Rural India is emerging as a large market for a number of goods and services. So, its better to target the rural market. Marketers find a similarity between the criticality of rural as well as urban markets. Some reasons for the same are listed below 1. Rural markets are growing faster than urban markets: Apart from agricultural inputs, there is growing market for consumer goods in rural areas. Rural market are growing at a faster rate than urban markets and were over Rs 1,000,00 crores in 2000.According to NCARE, the rural consumers represent more than 50% of Indias consuming classes and form the target group for consumer goods and services. 2. Saturation of urban markets: There is cutthroat competition in urban markets. Due to the wide variety of choices of products, it becomes difficult for existing companies to maintain their market share. Compared to urban markets, the rural markets provide better opportunities.
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3. A huge untapped market: With a rural population of more than 700 million, it has a huge potential and market areas as only around 1-lakh villages are tapped out of the 6-lakh odd villages. 4. Rising disposable incomes: Good monsoons during the past 10 years have raised farmers incomes. Non-farm sectors now account for almost 50% of the total rural incomes. It is a market that corporatists cannot afford to ignore. Another reason for the rising disposable incomes of the villages is that Agricultural income is nontaxable. 5. Impact of the media: The growing reach of the electronic media has created a huge change in the lifestyles of rural consumers because of TV programmes like soaps and other serials. Rural people are spending more on lifestyle products these days. Modi, Revlon, for instance sells more lipsticks in the rural market than in urban areas. Last year rural sales were Rs.25 crores; only Rs.12 crores came from the urban market. 6. Life cycle advantage: Many products reach a maturity/decline stage in urban areas while in the rural areas they are still in the growth phase. Stages in product Life-Cycle Product Urban Market Growth Rate (%) 2 11 6 Rural Marke t Growt h Rate (%) 40 60 60
Popular Soap Maturity Premium Soap Washing Powders Late Growth Late Growth
Growth Early Growth Early Growth
Source : ORG data base.
7. Large domestic market: India is one of the largest emerging markets, with a population of over one billion. India is one of the
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largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million. Rural and urban potential: Rural and urban profile Urban Population 2001-02 (mn household) Population 2009-10 (mn household) % Distribution (2001-02) Market (Towns/Villages) Universe of Outlets (mn)
Source: Statistical Outline of India (2001-02), NCAER
Rural 135 153 72 627,000 3.3
53 69 28 3,768 1
Around 70 per cent of the total households in India (188 million) resides in the rural areas. The total numbers of rural households are expected to rise from 135 million in 2001-02 to 153 million in 200910. This presents the largest potential market in the world. The annual size of the rural FMCG market was estimated at around US$ 10.5 billion in 2001-02. With growing incomes at both the rural and the urban level, the market potential is expected to expand further.
06:Challenges in Rural Marketing

Challenges to rural marketing can be surmised under the so called 4A theory:
1. AVAILABILITY of the product: The first challenge is to ensure
availability of the product or service. Indias 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000.Marketer must trade off the distribution cost with incremental market penetration.
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2. AFFORDABILITY of product: The second challenge is to ensure
affordability of the product or service. With low disposable incomes, products need to be affordable to rural consumer, most of who are on daily wages. One way to address the affordability problem by introducing small unit packs. Lower prices/smaller packaging has been the most common strategies adopted by FMCG companies to penetrate rural markets.HUL initiated Operation Bharat to tap rural market by rolling out low priced sample packets of its toothpaste, fairness cream, shampoo, cream and other products. Similarly LPG companies have introduced small sized cylinders ensuring that price remains in the affordable range for its rural consumers.
3. ACCEPTABILITY
of product: The third challenge is to gain acceptability for the product or service. Social norm, traditions, castes and social customs have greater influence on the acceptability quotient.
4. AWARNESS of product: Means of transportation, communication,
media penetration and literacy levels are just some of the factors that come into play here. Companies may have to rely on direct promotion and area specific marketing campaigns to get better results on their product awareness. Since rural areas have limited venues for entertainment, conducting an event in rural areas can bring a good response. some of the interesting events that can be conducted Road shows, Meals, Street Theatre ,film shows and so on.
07:Rural Consumer Behavior

Some Myths: 1. Myth-1: Rural Market Is a Homogeneous Mass
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Reality: Its a heterogeneous population. Various Tiers are present depending on the incomes like Big Landlords; Traders, small farmers; Marginal farmers: Labors, artisans. State wise variations in rural demographics are present viz. Literacy (Kerala 90%, Bihar 44%) and Population below poverty line (Orissa 48%, Punjab 6%). 2. Myth-2: Disposable Income Is Low Reality: Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for rural sector is 27.4 million as compared to the figure of 29.5 million for urban sector. Rural incomes CAGR was 10.95% compared to 10.74% in urban between 1970-71 and 1993-94. 3. Myth-3: Individuals Decide About Purchases Reality: Decision making process is collective. Purchase processinfluencer, decider, buyer, one who pays can all be different. So marketers must address brand message at several levels. Rural youth brings brand knowledge to Households (HH).
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 middleclass. The farmers of Bihar and Orissa fall under this category.
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Understanding consumer needs, desires, likes, dislikes and preferences and offering products and services that will give satisfaction to consumers is primary role of Market Research Factors effecting rural consumer behavior: 1 Environment Factors: a. Economic: Favorable monsoons, diversification of agriculture, development of villages industries, village crafts, and remittance from migrated people have led to increase in rural income. The rise in income coupled with increased awareness and need for possessing modern goods have influenced the rural market environment in our country. b. Political: The government has taken the initiative for economic development of rural areas and have invested heavily in agriculture, irrigation, electricity, dairy and other infrastructure like roads, hospitals, these initiatives have certainly led to rural prosperity and opportunities for the marketers. c. Technology: The rapid expansion of telecommunication facilities through STD and PCO, landline, mobile telephone service have provided opportunity to rural people to keep in touch with urban markets. d. Legal: The government has come out with many legislative measures to protect interest of rural consumers.1)Money lenders act 2)Regulated markets 3)Essential commodities act 4)Agriculture input act etc.. 2 Cultural Factors : e. Culture and Sub culture: Culture is a system of shared beliefs, perceptions and customs that influence the behavior of consumers. Consumer behavior influenced by culture like 1)Traditional life 2)Traditional occupation 3)Traditional belief like family values f. Social Class: Consumer behavior is determined by the social class to which they belong and it is determined by the combination of factors like education, occupation, income and assets. 3 Social Factors : g. Reference Group: Includes family and friends with whom an individual interacts with a face to face basis and sports man, film stars etc. with whom the individual does not have face to face interaction, word of mouth is the process by which the message are passed within the
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group from one members to another member and these consumer develop positive or negative opinions towards product and services. h. Family: Family is a group of persons related by blood, marriage or adoption who reside together and members of family play different roles such as influencer, decider and purchaser in the buying process.
Personal Factors: i. Age and Life cycle: Life cycle of a person begins with child birth, move to infancy, adolescence, teenage, adult, middle age, old and then ends with death. Under each stage buying behavior is different. j. Occupation: Large population depends upon agriculture for living but agriculture income is seasonal and therefore demand is high during post harvest period. k. Economic Circumstances: Refer to the spendable income, assets and savings and attitude towards spending and savings. Rural income is seasonal compare to an urban consumer who receives regular income. Regarding saving habits traditionally rural people prefer to invest in jewellery and fixed deposits in banks and post offices. l. Life Style: Studies shows as to how people spend their time and money an day-to-day activities. The life style dimensions are activities, interest and opinion and demographic features such as age, gender, education, occupation and income. Very often consumer buy product to enhance their life style. m. Personality and Self-concept: Personality is the unique combination of different combination of different individual characteristics. We find that many individuals are similar in terms of one or more characteristics, but they are not alike in all characteristics. Personality is the combination of factors such as sociability, self confidence and dominance. Personality influences consumer behaviors in many ways. Psychological: n. Motivation: When a buyer purchases a product and service he has reason for the same. Motive is a strong feeling, urge, desire or emotion that makes the buyer to
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take decision to buy. Each person is motivated by his needs and satisfaction of one need results in the creation of another need. Motives are of two types e.g. product, motives and patronage motives. o. Perception: All consumers are not alike. They see the world in their own special ways. For instance, all the members of the family have viewed a particular product advertisement in the television. The members may interpret the same advertisement in quite different way. This is because needs, wants, values, attitudes and personal experience vary from person to person. Similarly, consumers perception means what he thinks about the product, producer or the brand. p. Learning: Is the process of acquiring knowledge about products. Product benefits, method of usage, maintenance and also disposal of the products. Considering low literacy, low awareness and low reach of mass media in the interior areas, the marketers have to educate the consumer through rural specific promotion media and methods. q. Belief and attitude: In general, an attitude is a state of mind or feeling. Attitude indicates our feeling about a product, service, brand, shop and whether we are positively or negatively disposed towards the object or class of objects. Shopping Habits:
1. Village market : Panshops in small villages: Match box, Cigarette, beedi,
supari, tobacco, soap, biscuits ,candies. Grocery shops in large village: Foods grains, edible oil, kerosene, minor electrical items, over the counter medicines etc. 1. Shandies/hats/weekly markets: Agriculture implements, cloth, herbal medicines, local sweets, toys, jaggery, baboo baskets, grain, vegetables , fruits. 2. Mandi towns / taluka / district head quarters: Agriculture inputs, watches, cycles, readymade garments, cement, books ,electrical items, vessels, jewellery, sewing machines
08:Rural Market segmentation

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Rural market consists of individuals and groups of people and their needs, resources, preferences and buying habits differ. The rural market is heterogeneous as seen below.
Landlord/rich farmers start using Air-conditioner, DTH services, cars but on other hand agriculture labourers and small farmers are struggling to meet both ends meets. Thus all consumers do not share the same purchasing power. Literacy is an important factor in developing awareness and knowledge about technology changes and there are wide variations in literacy level among states. For example rural literacy is very high in Kerala compared to Bihar, Orissa, CG and Jharkhand. There are variations in population size and density of population in villages. There are about two lakh villages having population of less than 500 each and there are practically no shop in such villages. There are different groups based on religion, caste, occupation, income, age ,education and politics and each group exerts influence on the behavior people in the villages.
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Market segmentation has three components 1) Market: People or organization with needs or wants and ability and willingness to pay. 2) Market Segment: A group of people or organization having one or more characteristic that leads to them to have similar product needs. 3) Market Segmentation: The process of dividing a market into meaningful, relatively similar identifiable segments and groups. There are many ways to group consumers in segmenting the market. Broadly there are two main approaches to identify market segments as given below. A) People Oriented Approach: 1) Geographical characteristics:

Region : East, West, North and South Density of population : Metro plus Bangalore, Hyderabad, Non metro, Urban, Rural, Semi Urban, top 23 towns all India. Size of village :small (1000-2000),medium (2000-10,000),large (10,000 plus)
2) Demographic characteristics:

Gender: Male/Female Age: (Under 6, 6-11, 12-19, 20-34, 35-49, 50-64). Family size: (1-2,3-4,5 plus )
3) Socio-economic characteristics:

Income: Lower, Lower middle ,middle and upper middle and high Occupation: Agriculture and non-agriculture Education: Literate, illiterate. Religion/Caste: Upper cast , lower casts Culture: Traditional life , family values Belief and attitude: positive, negative and neutral Social Status: High, medium and low
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4) Psychographic characteristics: Personality traits such as dominance, aggressiveness, achievement orientation, motivation etc. may influence buyer behavior. Life style an be measured by the products the person uses and the persons activities, interests, opinions and values. In the rural society, there are grades of people based on income, occupation and wealth. The educated youth, innovative farmers, village president are the important opinion leaders and marketers are targeting this group for promoting products and services.
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B) Product Oriented Approach:
Use pattern: A buyer may be classified as heavy, medium, light and non user. The use of consumer products such as shampoo, hairoils, tooth paste, talcum powder is low in rural areas due to poor affordability and many marketers have introduced small unit packs of these products to meet the requirement of lower and middle class consumers. Benefits pattern: Consumer buy products primarily to secure expected benefit. Rural buyers look for value for money while purchasing products. They look for quality but cannot afford high prices. They are concerned with utility of the products rather than mere good looks and frills. Brand loyalty pattern: A rural consumers is price sensitive due to low purchasing power and lack of awareness about the quality of products available in the market. They will continue to patronise a brand once they are satisfied with the product. Store patronage: It has been observed that rural consumer buys from the same shops. The retailer extends credits credit to the consumers and many have running credit account with the same retailers. He influences buying decisions of the consumers. Therefore marketers have to identify key retailers in rural markets and ensure product availability of success of business.
09: Strategies to capture rural India

SEGMENTATION OF RURAL MARKET
The first step is to develop & implement any strategy for the rural market should include the appropriate segmentation of the rural market. The important thing is that appropriate segmentation basis need to be applied. Different product categories have different rural markets to cater to & these can be selected by applying different criteria of segmentation. The organization can do the following thing to start with: Focus on select markets. Focus on select villages.
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BY COMMUNICATING AND CHANGING QUALITY PERCEPTION Companies are coming up with new technology and they are properly communicating it to the customer. There is a trade of between Quality a customer perceives and a company wants to communicate. Thus, this positioning of technology is very crucial. The perception of the Indian about the desired product is changing. Now they know the difference between the products and the utilities derived out of it. As a rural Indian customer always wanted value for money with the changed perception, one can notice difference in current market scenario.
BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local language for promoting their products. They have started selling the concept of quality with proper communication. Their main focus is to change the Indian customer outlook about quality. With their promotion, rural customer started asking for value for money. BY TARGET CHANGING PERCEPTION If one go to villages they will see that villagers using Toothpaste, even when they can use Neem or Babool sticks or Gudakhu, villagers are using soaps like Nima rose, Breeze, Cinthol etc. even when they can use locally manufactured very low priced soaps. Villagers are constantly looking forward for new branded products. What can one infer from these incidents, is the paradigm changing and customer no longer price sensitive? Indian customer was never price sensitive, but they want value for money. They are ready to pay premium for the product if the product is offering some extra utility for the premium. BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hold on the people. Cultural values play major role in deciding what to buy. Moreover, rural people are emotional and sensitive. Thus, to promote their brands, they are exploiting social and cultural values. BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. They do not see any value in frills associated with the products. They aim for the basic functionality.
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However, if the seller provides frills free of cost they are happy with that. They are happy with such a high technology that can fulfil their need. As "Motorola" has launched, seven models of Cellular Phones of high technology but none took off. On the other hand, "Nokia" has launched a simple product, which has captured the market. BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS Companies are picking up Indian models, actors for advertisements as this helps them to show themselves as an Indian company. Diana Hyden and Shahrukh Khan are chosen as a brand ambassador for MNC quartz clock maker "OMEGA" even though when they have models like Cindy Crawford. BY ASSOCIATING THEMSELVES WITH INDIA MNCs are associating themselves with India by talking about India, by explicitly saying that they are Indian. M-TV during Independence Day and Republic daytime make their logo with Indian tri-colour. Nokia has designed a new cellular phone 5110, with the India tri-colour and a ringing tone of "Sare Jahan se achcha".
BY PROMOTING INDIAN SPORTS TEAM Companies are promoting Indian sports teams so that they can associate themselves with India. With this, they influence Indian mindset. LG has launched a campaign "LG ki Dua, all the best". ITC is promoting Indian cricket team for years; during world cup they have launched a campaign "Jeeta hai jitega apna Hindustan India India India". Similarly, Whirlpool has also launched a campaign during world cup. BY TALKING ABOUT A NORMAL INDIAN Companies are now talking about normal India. It is a normal tendency of an Indian to try to associate him/her with the product. If he/she can visualize himself/herself with the product, he /she become loyal to it. That is why companies like Daewoo based their advertisements on a normal Indian family. BY DEVELOPING RURAL-SPECIFIC PRODUCTS
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Many companies are developing rural-specific products. Keeping into consideration the requirements, a firm develops these products. Electrolux is working on a made-for India fridge designed to serve basic purposes: chill drinking water, keep cooked food fresh, and to withstand long power cuts. BY GIVING INDIAN WORDS FOR BRANDS Companies use Indian words for brands. Like LG has used India brand name "Sampoorna" for its newly launched TV. The word is a part of the Bengali, Hindi, Marathi and Tamil tongue. In the past one year, LG has sold one lakh 20-inch Sampoorna TVs, all in towns with a population of around 10,000. BY ACQUIRING INDIAN BRANDS As Indian brands are operating in India for a long time and they enjoy a good reputation in India. MNCs have found that it is much easier for them to operate in India if they acquire an Established Indian Brand. Electrolux has acquired two Indian brands Kelvinator and Allwyn this has gave them the well-established distribution channel. As well as trust of people, as people believe these brands. Similarly Coke has acquired Thumps up, Gold Spot, Citra and Limca so that they can kill these brands, but later on they realized that to survive in the market and to compete with their competitor they have to rejuvenate these brands. BY EFFECTIVE MEDIA COMMUNICATION Media Rural marketing is being used by companies. They can either go for the traditional media or the modern media. The traditional media include melas, puppetry, folk theatre etc. while the modern media includes TV, radio, and e-chaupal. LIC uses puppets to educate rural masses about its insurance policies. Govt of India uses puppetry in its campaigns to press ahead social issues. Brook Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in Etawah district. In between such a show, the lights are switched of and a torch is flashed in the dark (EVEREADYs tact).
BY ADOPTING LOCALISED WAY OF DISTRIBUTING

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Proper distribution channels are recognized by companies. The distribution channel could be big scale Super markets; they thought that a similar system can be grown in India. However, they were wrong; soon they realized that to succeed in India they have to reach the nook and the corner of the country. They have to reach the "local Paan wala, Local Baniya" only they can succeed. MNC shoe giants, Adidas, Reebok, and Nike started with exclusive stores but soon they realized that they do not enjoy much Brand Equity in India, and to capture the market share in India they have to go the local market shoe sellers. They have to reach to local cities with low priced products. BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES MNCs have realized that in India celebrities enjoyed a great popularity so they now associate themselves with Indian celebrities. Recently Luxor Writing Instruments Ltd. a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of Parker Sonnet Hussain special edition fountain pens, priced at Rs. 5000. This pen is signed by Mr. Makbul Fida Hussain a renowned painter who has created "Gajgamini" range of paintings. Companies are promoting players like Bhaichung Bhutia, who is promoted by Reebok, so that they can associate their name with players like him and get popularity.
MELAS Melas are places where villagers gather once in a while for shopping. Companies take advantage of such events to market their products. Dabur uses these events to sell products like JANAM GHUTI (Gripe water). NCAER estimates that around half of items sold in these melas are FMCG products and consumer durables. Escorts also display its products like tractors and motorcycles in such melas. PAINTINGS A picture is worth thousand words. The message is simple and clean. Rural people like the sight of bright colors. COKE, PEPSI and TATA traders advertise their products through paintings.
Product Strategies
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The specific strategies, which can be employed to develop or modify the products to targets the rural market, can be classified as follows: 1. Small unit packing: Given the low per capita income & purchasing habits of the rural consumers, small unit packages stand a good chance of acceptance in rural market. Single serve packets or sachets are enormously popular in India. They allow consumers to buy only what they need, experiment with new products, & conserve cash at the same time. This method has been tested by products life shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth paste, etc. Small packing stands a good chance of acceptance in rural markets. The advantage is that the price is low and the rural consumer can easily afford it. Also the Red Label Rs. 3.00 pack has more sales as compared to the large pack. This is because it is very affordable for the lower income group with the deepest market reach making easy access to the end user satisfying him. The small unit packing will definitely attract a large number of rural consumers. 2. New product designs: Keeping in view the rural life style the manufacturer and the marketing men can think in terms of new product designs. The rural product usage environment is tough because of rough handling, rough roads & frequent power fluctuations. Thus, all these environmental factors must be considered while developing the products meant for rural audience. Nokias 1100 model is a very good example of a customized model for rural markets. Its design has been modified to protect it against rough usage in rural environment; it is dust resistant & has a small torch light in view of the frequent power cuts in rural India. It is also introduces messaging in Hindi language now, in some of the economically priced models in order to cater to the semi-urban or rural consumers. This is in real terms, thinking global & acting local. 3. Sturdy products: Sturdiness of a product is an important factor for rural consumers. The product should be sturdy enough to stand rough handling, transportation & storage. The experience of torch light dry battery cell manufacturers supports this because the rural consumers preferred dry battery cells which are heavier than the lighter ones. For them, heavier weight meant that it has more over and durability. Sturdiness of a product either or appearance is an important for the rural consumers.
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4. Utility oriented products: The rural consumers are more concerned with utility of the product and its appearance Philips India Ltd. Developed and introduced a low cost medium wave receiver named BAHADUR during the early seventies. Initially the sales were good but declined subsequently. On investigation it was found that the rural consumer bought radios not only for information and news but also for entertainment. 5. Brand name: For identification, the rural consumers do give their own brand name on the name of an item. The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on generic names. A brand name or a logo is very important for a rural consumer for it can be easily remembered. Many a times rural consumers ask for peeli tikki in case of conventional and detergent washing soap. Nirma made a peeli tikki especially for those peeli tikki users who might have experienced better cleanliness with the yellow colored bar as compared to the blue one although the actual difference is only of the color. e.g.: Coca-Cola targeted the whole Indian rural market with the positioning of Thanda Matlab Coca-Cola advertisements because most of the villagers say when wanting a drink refer to it as Thanda so Coca-cola used that word.
Pricing strategies
1. Low cost/ cheap products: This follows from the product strategy. The price can be kept low by low unit packagings like paisa pack of tea, shampoo sachets, vicks 5 grams tin, etc. this is a common strategy widely adopted by many manufacturing and marketing concerns. 2. Refill packs / Reusable packaging: In urban areas most of the health drinks are available. The containers can be put to multipurpose uses. Such measures can a significant impact in the rural market. For example, the rural people can efficiently reuse the plastic bottle of hair oil. Similarly the packages of edible oil, tea, coffee, ghee etc can be reused. Pet jars free with the Hasmukhrai and Co Tea, Ariel Super Compact. 3. Application of value engineering: in food industry, Soya protein is being used instead of milk protein. Milk protein is expensive while Soya protein is cheaper, but the nutrition content of both is the same. The basic
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aim is to reduce the value of the product, so that a larger segment can afford it, thus, expanding the market. 4. Large volume-low margins (Rapid or slow penetration strategy): Marketers have to focus on generating large volumes & not big profit margins on individual products. If they price their product at a level which can lead to good volumes, then they can still generate good returns on the capital employed. 5. Overall efficiency & passing on benefits to consumers: For rural products, the strategy should be to cut down the production, distribution & advertising costs & passing on these benefits to the customers to further increase the turnover. Most often, it has been observed that advertising has less to do with product sales in the rural areas. If an organization gets the price point right, then it can work in rural market. 6. Low volume-low price strategy: This strategy of reducing prices by reducing the package size in order to make it appear more affordable, is delivering very good results for a large number of FMCG product categories, in the rural markets of India. In categories where maintaining the price point is extremely critical, this strategy is delivering very good results. 7. Ensuring price compliance: Rural retailers, most of the times, charges more than the MRP. The manufacture has to ensure price compliance either through promotional campaigns, as was done by Coca Cola, or by ensuring the availability of products at the retail outlets directly.
Promotion strategies
Customized promotional media & messages need to be developed by the organizations to effectively target the rural market. The following strategies can be considered while developing promotional campaigns for the rural markets:
1. Think Global Act Local : Rural population is diverse, but the
commonalities of their ethos & simple living habits need to be

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understood for advertising to succeed. For that, the theme of the advertisement needs to revolve among universal themes, such as family-love. But the context, storyline, language & idioms should be such that the rural audience of different rural market segments can relate to.
2. Think in Local Idiom : This is the need of the advertising
professionals who can think like the rural people. The only we can have insights like Thanda matlab Coca Cola. There should be the use of language writers who understands the rural & regional pulse better.
3. Simplicity & Clarity: All promotional messages targeted at rural
audience need to be simple & clear, which can be easily understood, & they should not include any confusing elements. It is preferable that it has only a few propositions at a time. Bombarding rural consumers with too much, in less time can easily confuse them & leave them bewildered. Promotional message should highlight only the functional values of the product & explains how those values can make the consumers life even better & solve any of his problems.
4. Narrative Story Style: The promotional message can be delivered
in the form of an entertaining story with a message depicting how the brand delivers larger good to the family & society. The theme of the story line can be about how the product can solve the problems of the rural consumers.
5. Choice of Brand Ambassador: Brand Ambassador for the rural
markets need to be picked carefully as urban successes might not get replicated in the rural markets. That is why Govinda in the Mirinda as boosted the sales of the drink in the rural markets. An organization might spend a lot of money in hiring a brand ambassador only to find out later that it had little impact on the rural consumer.
Distribution Strategy
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Many companies view the rural markets as great opportunity for expanding their sales but find distribution as a major problem. Unfortunately, it is almost impossible to transplant strategies which work successfully in urban markets onto rural markets, namely, extensive retailing and sustained pull generation through mass media advertising. The road blocks to reach the rural customers are: Lack of adequate transport facilities. Large distances between villages. Lack of pucca roads connecting villages to nearest townships. Lack of proper retail outlets Lack of mass media infrastructure. The marketers were of the opinion that the villagers would come to nearby towns and buy the products that they want. What has been found is that if we have to serve the rural consumer we will have to take our products to him through the channels that he is using and some innovative ways of getting to him. The following distribution strategies formulated for the rural category. 1. Coverage of villages with 2000 and above population: Ideally, coverage of villages with up to 2000 and above population could be the break-even point for a distribution setup. By doing so the percentage of villages covered comes to only 10% of all the villages, but the rural population covered will be substantial, to the extent of about 40 to 45 percent. With a distribution network in about 55,000 villages, which have a population of 2000 persons & above each, one can cover about 25 crores rural consumers. This strategy is good to begin with & then subsequently, villages with lesser populations can be added. 2. Segmentation: the number of villages in India is huge & it is not viable to contact & serve all villages directly. Therefore, companies or distributors can carefully examine the market potential of different villages & target the villages that can be served in a financially viable manner through an organized distribution effort. 3. Use of co-operative societies: There are over 3 lacks co-operative societies operating in rural areas for different purposes like marketing cooperatives, farmers service cooperatives and other multipurpose cooperatives. These cooperatives have an arrangement for centralized procurement and distribution through their respective state level
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federation. Such state level federation can be motivated to procure and distribute consumables items and low value durable items to the members to the society for serving to the rural consumers. Many of the societies extend credit to the members for purchases. 4. Utilization of public distributory system: The PDS in the country is fairly well organized. The revamped PDS places more emphasis on reaching remote rural areas like the hills and tribals. The purpose of PDS is to make available essential commodities like food grains, sugar, kerosene, edible oils and others to the consumers at a reasonable price. The shops that distribute these commodities are called fair price shops. These shops are run by the state civil Supplies Corporation, co-operatives as well as private entrepreneurs. Here again there is an arrangement for centralized procurement and distribution. The manufacturing and marketing men should explore effective utilization of PDS. 5. Utilization of multipurpose distribution centers by petroleum/oil companies: In order to cater to the rural areas the petroleum/oil companies have evolved a concept of multipurpose distribution centers in rural areas. In addition to petrol/diesel, lubricants, these outlets also stock consumables agricultural inputs like fertilizers, pesticides and seeds. It is estimated that there are about 450 such outlets in operation in the country. The rural consumer who has tractors, oilengine pump sets and mopeds frequent these outlets for their requirement. These outlets can be profitably utilized for selling consumables and durable items also. 6. Distribution up to feeder markets/mandi towns: Keeping in view the hierarchy of markets for the rural consumers, the feeder markets and mandi towns offer excellent scope for distribution. The rural customers visit these towns at regular intervals not only for selling the agricultural produce but also for purchasing cloth, jewelry, hardware, radios, torch cells and other durables and consumer products. From the feeder markets and mandi towns the stockiest or wholesaler can arrange for distribution to the village shops in the interior places. This distribution can be done by mopeds, cycles, bullock-carts, camelbacks etc. depending upon the township. 7. Shandies/Haaths/Jathras/Melas: These are places where the rural consumers congregate as a rule. While shandies/heaths are held a
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particular day every week, Jathras and melas are held once or twice a year for longer durations. They are normally timed with religious festivals. Such places attract large number of itinerant merchants. Only temporary shops come up selling goods of all kinds. It can be beneficial for companies to organize sales of their product at such places. Promotion can be taken, as there will be ready captive audience. For convincing the manufacturing and marketing man with regard to the importance of these places from rural marketing point of view a visit to such places is necessary. It is estimated that over 5,000 fairs are held in the country and the estimated attendance is about 100 million rural consumers. Biggest fair Pushkar Mela is estimated to attract over 10 million people. There are 50 such big rural fairs held in various parts of country, which attract urbanite also like Mankanavillaku in Malappara in Kerela, Kumbh Mela at Hardwar in U.P. Periya Kirthigai at Tiruparunkunaram in Tamil Nadu.
Merits:
Convenience: The entire market can be related to large departmental stores in cities, where the advantage is a one-stop shopping exercise. These outlets crop up every week, providing consumers immense choice and prices. Attractive: The weekend shopping is not only convenient but also entertaining. The markets start early and will be over by lunch. Afterwards, there will be entertainment. In respect of transactions, it is an attractive place to those who want to buy second hand durables and to those who prefer barter transactions. Further the freshness of the produce, buying in bulk for, a week and the bargaining advantage attract the frugal and weeklong hard working rural folk. Availability: It is a market for everyone and for everything. Household goods, clothes, durables, jewellery, cattle, machinery, farming equipment, raw materials and a host of products are available.
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8. Agricultural Input Dealers: Fertilizers should be made available to the farmers within the range of 4-5 km from their residence, as per the essential commodities act. This is why there are about 2 lakh fertilizer dealers in the country, both in cooperative & private sector. Example of Varana Nagar in Maharashtra proved an eye opener in this regard where the sugar and milk co-operatives have totally changed the life style of people. The supermarket in Varana Nagar caters exclusively to rural consumers. Similarly a co-operative supermarket called Chintamani in Coimbatore (T.N) arranges free transit of rural consumers to the supermarket of their purchases. 9. Joint distribution by Non-competing Companies: As the cost of distributing the products in the rural market through distribution vans can be unviable for a single company, different non-competing companies can come together to jointly operate distribution vans for the rural market. This will enable them to share the cost of operating the van & on account of the sharing of the cost by four or five companies; the entire operation can become financially viable for all the players. 10. Personal Selling Network: It is very successful distribution channel being developed by companies like HUL. It adds a personal touch to the marketing, as the salesmen are the resident of the village or community itself, making it easier to sell the product & maximise sales for the company. THE OLD SETUP The historically available people & places for distribution include: - Whole seller, Retailer, Vans, Weekly Haats, and Bazaars & Shadies. 1. Wholesalers The Indian wholesaler is principally a Galla Kirana (food-grain) merchant who sustains the belief that business is speculative rather than distributive in character. He is a trader / commodity merchant rather than a distributor and therefore tends to support a brand during boom and withdraw support during slump.
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The reason for this speculative character and dormant role of wholesalers are: Indian market was largely sellers market. There was no need for active sales growth. Companies laid more emphasis or retailers in urban areas, who are very large in number. As a result of retail based distribution was weakened. Rural markets were neglected by many. The occurrence of retail outlets was low. Therefore many companies were dependent on whole salers. The current need is to activate and develop wholesaler of the adjoining market as a distributor of products to rural retail outlets and build his loyalties to the company. 1. Retailers There are different kinds of retailers. Shops within the village Shops located on the main road and not exactly within the village Kasba market or the tahsil market. Village retailers have traditionally been among the most mobile of rural residents. I.CREDIBILITY: He enjoys the confidence of the villagers. His views are accepted and followed by the rural people whose awareness and media exposure levels are low. - The urban retailer is not trusted. He is seen as a businessman with profit motto. His view points are evaluated with other sources of information.)
II.INFLUENCE LEADER: -
His role as influence leader is indisputable. From tender twig of neem to washing powder retailer testimony has been vital part of the product adoption process. The role of urban retailer is weak.
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The urban consumers have numerous sources of information. Although retailers opinion is sought it may not be 100% believed and followed.
I. BRAND PROMOTER: -
In rural market retailers remains the deciding factor to sell particular brand. Retailers helps in identification and selection of brands, there is less influence of shelf displays and point of purchase promotion. Presence of spurious brands is an ample testimony to this view. (The urban retailer has a limited role as a brand
promoter.
He cannot directly, recommend the brands. He is to intelligently drive home his recommendations, as urban consumers do not trust him completely. It is through shelf displays and incentive offers that he has to push the brands.)
II.RELATIONSHIP MARKETER Village retailer practices relationship marketing. He caters to a set of buyers who have income from immovable land resources and would be static over a much longer time span. The relationship could extend beyond three generations, backed by historical credibility of the retailer as a product referral. (on the contrary, the urban retailers have to make an effort to adopt relationship marketing. His customers base comprises largely the mobile service class prone to shift residence at least once, if not more, in less than a decade. This limits the time span and perspective of the retailer customer relationship.)
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1. Vans Mobile vans long since, have an important place in distribution and promotion of the products in villages.
2. Weekly Haats, Bazaars, Shandies The haats are the oldest outlets to purchase household goods and for trade. These markets are very well organized with shopkeepers having pre-assigned spaces for them to sell their wares. A typical market is in an open field with ample space for displaying all sorts of goods. Its location changes every week. These markets have different names in different regions. But they are strikingly similar in what they sell. It is reported that there are, in all, about 47,000 haats held throughout the country.
10: Rural Marketing Initiatives

Electrolux Bijli Launched new Refrigrtor for rural and semi-urban market priced at 10,000/Range of T.Vs with devnagri script on display priced at 12,000/Focusing on rural town with population less than 5000 with special economy model of color TV priced at 8,000/Road show in semi-urban & rural with mid priced consumer durables to provide Touch & Feel experience. Rural initiative targeted villages population less than 2000, providing income generating opportunity through Shakti-Vani.
L.G
Sampoorna
Philips
Mahasangram
Samsung
Sapno Ka Ghar
Hindustan Unilever Ltd
Shakti
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Colgate Palmolive
Operation Jagruti
Operation Jagruti, a village consumer contact campaign was launched with objective of massive rural penetration targeted at the non-users and infrequent users of dentifrices. Anti loose campaign and temper proof packaging in smaller variants. Low cast snacks & beverages. Launched Coca Cola in Rs 5/- with tag line Thanda Matlab coco-cola US-based direct seller Amway corporation, is looking to reverse its fortune with the launch of range of lowpriced fast moving consumer goods (FMCG) products aimed at rural tier 2 and 3 cities. Cavinkare launched an aggressive campaign to educate people on how to use shampoo through live touch and feel in rural folks. A rural shopping mall where farmers can sell their commodities and everything including cosmetics, garments, electronics, appliances and even tractors. It serves as an agri-sourcing canters, shopping centers and facilitation centers. After securing its foothold in urban and semi-urban markets, it has launched a
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Marico
Parachute
Pepsi Coca-Cola
Asha Chota-Coke
Amway
Great-value product
CavinKare
Chick
ITC
E-Choupal
Maruti-Suzuki
Mera Sapne Meri Maruti
pan-India campaign Mera Sapne Meri Maruti to tap vast potential of the rural market. Hyundai Ghar Ghar ke Pahchan The promotion scheme Ghar Ghar ki Pehchan is aimed at taking highly accomplished product like Santro in to the depth of rural India. Runs punchyat schemes where in it gives Rs 2000 as incentive on every buy of a spark. Her gaon her angan seeks to build an ongoing relationship with millions of households in rural India through a network of 500 rural sales executives. Mahindra Samiriddhi, an initiative of Mahindra farm equipment 600 Mahindra samiriddhi centres and 5 million farmers under its ambit by 2020. Tatas Rural transport vehicle for rural and semi-urban areas. Titan industries Gold plus is designed for the jewellery preferences of the semi-urban and rural Indian customer. A range of color solution intended for the rural mass market
Chevrolet
Panchayat scheme
Hero-Honda
Har gaon har angan
Mahindra
Samriddhi
Tata
Tata Ace Magic Gold-Plus
Titan
Asian Paints
Ustav
Cadbury
Miss-Palampur Caadbury has rolled out campaign Miss campaign Palampur eyeing to captured rural mass
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market. Met-life Met suvidha Met Suvidha (Rural)is participating flexible endowment plan that combines savings and security to rural masses. The Kamdhenu campaign, a unique high-impact marketing and sales campaign through cattle loans to farmers. Advance sales training ascendance in rural areas. for retail
ICICI Bank
Kamdhenu campaign
Dabur
Astra
Novartis
Arogya Pariwar
Initiative to build a sustainable, profitable business that improves access to health care among the undeserved millions in rural India by creating awareness, enhancing local availability, and designing appealing and affordable health solutions. Campaign run rural part of north india , in which rural masses and key opinion leader are educated and aware about epilepsy Elder has launched its new division to reach deep pocket of the rural hinterland with separate team of sales force
PiramalHealthcare
Hume Jitna Hain
Elder
Elvista
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11: FINDINGS AND ANALYSIS

1. Which soap u prefers to use?
The reaction of people towards various SOAP brands can be tabulated in the following manner: Brands Percenta ge LUX 26% Lifebuoy 22% Santoor 16% Dettol 9% Others 27%
In the survey, it could easily be concluded that LUX, the product of HUL was highly in demand. LUX, the product of HUL covers 26%of the market share. After LUX, the other brands (Except Lux, Dettol, Lifebuoy, and Santoor) cover 27%of the market share. This is then followed by LIFEBUOY, the product of HUL with a market share of 22%, which is then followed by Santoor, the product of Wipro with a market share of 16%.
This data can be graphically explained with the help of the following bar graph:
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2. Which pack u prefer to use?
In order to determine the income pattern of the consumers, it was necessary for the researcher to distribute the consumers on the basis of their demand for the various packs of soap brands available in the market. However, the reaction of people towards various packs of SOAP can be tabulated in the following manner: Price / Packs Percenta ge Rs.5 to 10 50% Rs.11 to 20 30% Rs.21 to 40 12% Rs.40 above 8%
In the survey, I tried to differentiate amongst people with below average household income, average household income &above household income. This classification can be done on the basis of the daily expenditure that people make.50% consumers demand Rs 5/- and 10/ packs-.30% consumers demand Rs 15/- to 18/- and rest 20% demands family packs i.e.3 in 1 pack (65gm X4 at 40/- and 110gm X 4 units 72/- buy 3 get 1 free .
This data can be graphically explained with the help of the following bar graph:
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3. Which tea u prefer to use?
The reaction of people towards various TEA brands can be tabulated in the following manner:
Brand Percenta ge
Society 16%
Tata 16%
Tazza 12%
Sapat 6%
Others 50%
In the survey, it could easily be concluded that Society and Tata Tea have a market share of 32%.This is followed by, Tazza- HUL, with a market share of 12%.Regional brand have 50% share. This data can be graphically explained with the help of the following bar graph:
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4. Which Tea pack u prefer to use?
In order to determine the income pattern of the consumers, it was necessary for the researcher to distribute the consumers on the basis of their demand for the various packs of TEA brands available in the market. However, the reaction of people towards various TEA packs can be tabulated in the following manner:
Price Packs Percenta ge
/ Rs.5 10 26%
to Rs.11 20 58%
to Rs.21 to Rs.40 40 above 13% 3%
In the survey, I tried to differentiate amongst the people, with below average household income, average household income & above household income. This classification can be done on the basis of the daily expenditure that people make. However, it can be concluded that sachets of Rs 5/- and 10/- are most commonly used by the people .i.e. 84%consumers demand sachet packs. 13%consumers demand medium pack. 3%consumers demand large pack. This data can be graphically explained with the help of the following diagram:
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5. Which tooth paste u prefer to use?
In the initial years, the rural consumers preferred tooth powders, datoons etc. But from the last decade, the preference of consumers towards toothpaste has been changed. A huge number of toothpastes of different companies are sold in rural market. However, the reaction of people towards various TOOTH PASTES can be tabulated as follows:
Brand Percenta ge
Colgate 68%
Pepsode nt 8%
CloseUP 6%
Babool 12%
Others 6%
In the survey that the researcher conducted, it could easily be seen that Colgate, the product of COLGATE PALMOLIVE is the market leader, which covers 68%of the total market. After that, PEPSODENT, the product of HUL is demanded by the customers, which covers 8%of the market share. Followed by CLOSE UP, the product of HUL is demanded by the customers, which covers 6%of the market share. Which is then followed by others brands (EXCEPT PEPSODENT, COLGATE, CLOSE -UP), which covers 18%of the total market share. This data can be graphically explained with the help of the following bar graph:
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6. Which tooth paste pack u prefer to use?
The reaction of people towards various fairness cream brands can be tabulated in the following manner:
Price Packs Percenta ge
/ Rs.5 10 5%
to Rs.11 20 47%
to Rs.21 to Rs.40 40 above 34% 14%
It can be concluded that tube of Rs 12/- are most commonly used by the people .i.e. 47% consumers demand.34%consumers demand medium pack. 11%consumers demand large pack.
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7. Which fairness cream u prefer to use?
Brand Percenta ge
F&L 68%
Fairever 8%
Emami 6%
Vicco 12%
Others 6%
In the survey, that I conducted, it can easily be concluded that FAIR &LOVELY, the product of HUL, holds the major market with a share of 68%.This is followed by, Fairever, which holds 8%of the market share. This is followed by, other brands (Except F&L), which captures 32%of the market share.
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8. Which fairness cream pack u prefer to use?
The reaction of people towards various fairness cream brands can be tabulated in the following manner: Price / Rs.5 to Rs.11 to Rs.21 to Rs.40 Packs 10 20 40 above Percenta ge 68% 18% 11% 3%
It can be concluded that sachets of Rs 5/- & 10/- are most commonly used by the people .i.e. 68% consumers demand.18%consumers demand medium pack. 14%consumers demand large pack.
9. Which shampoo u prefer to use?
The reaction of people towards various fairness cream brands can be tabulated in the following manner: Brand Clinic H&S Chik Vatika Others Plus Percenta ge 38% 28% 12% 18% 4%
In the survey, that I conducted, it can easily be concluded that Clinic Plus, the product of HUL, holds the major market with a share of 38%.This is followed by, Hair & Shoulder of P&G, which holds 28%of the market share. This is followed by, other brands (Except CP,H&S), which captures 34%of the market share.
10. Which shampoo pack u prefer to use?
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Price / Packs Percenta ge
Rs .50 to 5 70%
Rs.6 to 10 16%
Rs.11 to 20 8%
Rs.20 above 5%
It can be concluded that sachets of Rs .05/- & 5/- sachets are most commonly used by the people .i.e. 70% consumers demand.16%consumers demand medium pack. 14%consumers demand large pack.
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12: Suggestions &recommendations

The researcher would like to suggest the following points, so that the organizations can easily sell their products to their consumers: 1. However, the demand of a product is also affected by its life cycle. If the product is in the introduction stage, then it will definitely take some time to capture the market, because in the introduction stage, consumers are not much aware about the product. Therefore, it is the responsibility of the organization to create awareness amongst the consumers. 2. They should adapt rigorous marketing strategies, in order to sustain in the market. 3. There is immense competition in this sector. Therefore, the organizations should try to gain competitive advantage against their competitors. 4. They should try to reach as many people as possible. 5. For the organizations that are not much popular amongst the consumers should adopt Sales Promotion, as their marketing strategies. 6. Application of 4As has also become an important task for all the organizations. (4A=Availability, Affordability, Acceptability, Awareness)
13: BIBLIOGRAPHY

The Rural Marketing book by Pradep Kashyap Rural Marketing in India by K.S. Habeeb-Ur-Rahman Marketing Management: A South Asian Perspective by Philip Kotler Introduction to Rural Marketing R.Krishnamoorthy Kurukshetra Journal by Ministry of Information and Broadcasting Government of India. DNA Money, Economic Times , India Today BBC-South Asia : http://www.bbc.co.uk/news/world/south_asia Accenture Research Report Master of rural markets: The Hallmarks of High Performance www.ibef.org and http://rural.nic.in
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Exploring the growing Indian Rural Market

Project Report On Exploring the growing Indian Rural Market

Under the Guidance of Professor Shailesh Kale

In partial fulfillment of Masters in Marketing Management Course University of Mumbai (2009-2012)

Exploring the growing Indian Rural Market

Certificate from Guide

Signature of the Project Guide

Name of the Project Guide Address :

Mobile No. Email ID

+91 98197 45659 : shaileshkkms@gmail.com

Exploring the growing Indian Rural Market

(B) RESEARCH METHODOLOGY Magazines

Primary - Questionnaire Survey

Secondary- Internet / News Papers /

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

RESEARCH METHODOLOGY OBJECTIVES OF THE STUDY:

SCOPE OF THE STUDY:

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Khaitan fans' ad on a horse cart

Exploring the growing Indian Rural Market

Life buo y's wal l pai nti ng in rur al Indi a

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Satellite dish antennas reach rural India

Exploring the growing Indian Rural Market

Defining Rural India:

Exploring the growing Indian Rural Market

Reserve Bank India

Defining Rural Marketing:

Exploring the growing Indian Rural Market

National Commission on Agriculture

Corporate Rural Marketing Definition

Exploring the growing Indian Rural Market

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

Phase Two (1960s to 1990s)

Phase Three (1990s Present)

Exploring the growing Indian Rural Market

Exploring the growing Indian Rural Market

Thoughts of famous personalities:

Rural Vs Urban Marketing:

Adoption Product a) Awareness

Exploring the growing Indian Rural Market

Good Print, audio outdoors. etc visual,

Average TV, Radio, print media in many languages

Door-to door, frequently

02:Rural India powering economic growth

Exploring the growing Indian Rural Market

Sou rce: MART

Rs.45,000 Rs. 5,000 Rs.8,000 Rs.35,000 Rs.15,000 Rs.173,000

Exploring the growing Indian Rural Market

2025 (Projected) 2648

Exploring the growing Indian Rural Market

Compound Annual Growth Rate 5.1%

Exploring the growing Indian Rural Market

National Highway Projects (In km) projected as on Sep 21,2011.