RURAL MARKETING

SUBMIT TO
PROF. Mukesh Ranga

SUBMITTED BY
SANDEEP DWIVEDI
ABDUL NADEEM KHAN
M.B.E 3rd SEMESTER

RURAL MARKETING
Rural marketing is the study of all the
Activity , agency and policy involved in
The procurement of farm inputs by the
Farmers and the movement of rural
products from farmers to consumers.
_ G.N. MURTHY

NATURE OF RURAL MARKETING

The rural market is quite different from

urban markets.
Agriculture is the chief economic
activity in rural areas, the entire village
population is associated directly or
indirectly to agriculture.
In the process of development of
civilization agriculture and pastoral life
along river banks are the first of settled
life.

Importance of rural marketing

Size of rural market
Rural target population
Employment
Better living
Contribution to national income
Increase in farm income

Rural v/s Urban

OCCUPATION:
Rural:Cultivators n few non
agricultural pursuits.
Urban:manufacturing,trade,com
merce,professions

Size of community
Rural:open farms & small
community are vly corelated
Urban:urbanity & size of
community are +vly corelated

Problem and difficulties faced in

rural marketing
Lack of proper communication
Distribution problem
Seasonal demand
Low literacy level

Rural products
Rural products are the results of the
art of agriculture and allied activities.
In a narrow sense,rural products refer
to the products arising out of the
cultivation, namely various crops,
vegetables and fruits etc.

Types of rural goods

Industrial goods
consumer goods
Industrial goods:-industrial rural goods
are those use for further industrial
processing. e.g. tabacoo, fibre crops
like cotton and jute.
Consumer goods:-goods are mean for
direct use like all foodgrains, dairy
product, poultry products vegetables
and fruits.

Attractiveness of rural market

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

Various factors which have made rule

markets viable:1. Large population
2. Raising prosperity
3. Growth in consumption
4. Life-style changes
5. Life-cycle advantages
6. Market growth rates higher than
urban
7. Rural marketing is not expensive
8. Remoteness is no longer a problem

Now for some facts and figures. The Indian

rural market today accounts for only about Rs
8 billion (53 per cent - FMCG sector, 59 per
cent durables sale, 100 per cent agricultural
products) of the total ad pie of Rs 120 billion,
thus claiming 6.6 per cent of the total share. So
clearly there seems to be a long way ahead.
Time and again marketing practitioners have
waxed eloquent about the potential of the rural
market. But when one zeroes in on the
companies that focus on the rural market, a
mere handful names come to mind. Hindustan
Lever Limited (HuL) is top of the mind with
their successful rural marketing projects like
'Project Shakti' and 'Operation Bharat'.

RURAL MARKETING CHANNELS

Marketing channels are routes through which
rural products move from producers to
consumers
Cleary 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

In 1998 HuLs personal products unit initiated

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

Khaitan fans' ad on a horse cart

The greatest challenge for advertisers and

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

"Yaara da Tashan... ads with

Aamir Khan created universal
appeal for Coca Cola

"Yaara da Tashan..." ads with Aamir Khan

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

For HLL, a one rupee or a five rupee sachet or

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

Amul is another case in point of aggressive

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

Interestingly, the rural market is growing at a

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

Satellite dish antennas reach rural

India

In 2000, ITC took an initiative to develop

direct contact with farmers who lived in farflung villages in Madhya Pradesh. ITC's Echoupal was the result of this initiative.

So the fact remains that the rural market in

India has great potential, which is just waiting
to be tapped. Progress has been made in this
area by some, but there seems to be a long way
for marketers to go in order to derive and reap
maximum benefits. Moreover, rural India is
not so poor as it used to be a decade or so
back. Things are sure a changing

Typical shop in rural India stocked

with sachets, etc

Thank you