RURAL MARKETING

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

distributing rural specific product and a service leading to exchange between rural
and urban market which satisfies consumer demand and also achieves organizational
objectives.
 It is a two-way marketing process wherein the transactions can be:
 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.
 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.
 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.
 'Go rural' is the slogan of marketing gurus after analyzing the socio-
economic changes in villages. The Rural population is nearly three
times the urban, so that Rural consumers have become the prime
target market for consumer durable and non-durable products, food,
construction, electrical, electronics, automobiles, banks, insurance
companies and other sectors besides hundred per cent of agri-input
products such as seeds, fertilizers, pesticides and farm machinery
 The success of a brand in the Indian rural market is as unpredictable
as rain. It has always been difficult to gauge the rural market. Many
brands, which should have been successful, have failed miserably.
More often than not, people attribute rural market success to luck.
Therefore, marketers need to understand the social dynamics and
attitude variations within each village though nationally it follows a
consistent pattern looking at the challenges and the opportunities
which rural markets offer to the marketers it can be said that the
future is very promising for those who can understand the dynamics
of rural markets and exploit them to their best advantage
RURAL MARKETING
ENVIRONMENT
The rural marketing environment includes
1. The rural consumer
2. The rural demand
RURAL CONSUMER
- Includes villages that are widely populated.
- Heterogeneity
- Mixed picture in income and socio-economic problem
- Age mix
- Region to region and state to state variation in economic position.
- Occupation is now beyond agriculture
- New income is generated from agriculture as well as other sector.
- Heterogeneity in literacy rate too
- In attitude/lifestyle too, rural consumes do not fall into a single
bracket.
RURAL DEMAND
- large market larger than urban.
- Steady growth and welcome shift in composition.
- Several non-food products already established well in rural
consumer basket.
- For many products, the market is large despite low penetration
rates.
- In many products rural consumption accounts for a larger share
than urban.
- Colour TV
- Telecom Services
- In growth rate too the rural market has overtaken the urban in
many products.
IMPORTANCE OF RURAL MARKET
 The Indian rural with its vast size and demand base offers great
opportunities to marketers. More than 70% of the country’s
consumers are in the rural market and more than half of the national
income is generated here. The rural market is much larger than the
urban. As per NSS data of 2003-04, 62% of consumer expenditure in
the country comes from rural market and only 38% from urban
market. The data also shows that in growth rate of the expenditure
too, rural market, has been matching to urban. I contributes to over
half of India’s GDP.
 I t is not necessary for all firms to go rural . The urban market is also
large and is growing continuously. The firms turning to rural market has
become inescapable. Firms with huge growth ambitions such as FMCG
have no choice but to tap the rural market as their growth requirements
are huge. Many not so huge firms are under a strong compulsion to go
rural. These firms face difficulty in competition and saturation of the
urban market for their products.
What rural market buys?

Rural India buys small packs, as they are perceived as

value for money. There is brand stickiness, where a
consumer buys a brand out of habit and not really by
choice. Brands rarely fight for market share; they just
have to be visible in the right place. Even expensive
brands, such as Close-Up, Marie biscuits and Clinic
shampoo are doing well because of deep distribution,
many brands are doing well without much advertising
support — Ghadi, a big detergent brand in North
India, is an example.
Why Rural Market?
The Indian rural market has a huge demand base and
offers great opportunities to marketers. Two-thirds of
Indian consumers live in rural areas and almost half of the
national income is generated here. The reasons for
heading into the rural areas are fairly clear. The urban
consumer durable market for products like colour TVs,
washing machines, refrigerators and air conditioners is
growing annually at between 7 per cent and 10 per cent.
The rural market is zooming ahead at around 25 per cent
annually. "The rural market is growing faster than urban
India now," says Venugopal Dhoot, chairman of the Rs 989
-crore(Rs billion) Videocon Appliances. "The urban
market is a replacement and up gradation market today,"
adds Samsung's director, marketing, Ravinder Zutshi.
Reasons for improvement of business in rural area
Socio-economic changes (lifestyle, habits and tastes,
economic status)
Literacy level (25% before independence – more than 65%
in 2001)
Infrastructure facilities (roads, electricity, media)
Increase in income 
Increase in expectations
MART, the specialist rural marketing and rural
development consultancy has found that 53 per cent of
FMCG sales lie in the rural areas, as do 59 per cent of
consumer durable sales, said its head Pradeep Kashyap at
the seminar. Of two million BSNL mobile connections, 50
per cent went to small towns and villages, of 20 million
Rediffmail subscriptions, 60 per cent came from small
towns, so did half the transactions on Rediff's shopping site
Special features of rural market
 Unlike urban markets, rural markets are difficult to predict and
possess special characteristics. The featured population is
predominantly illiterate, have low income, characterized by irregular
income, lack of monthly income and flow of income fluctuating with
the monsoon winds.
 Rural markets face the critical issues of Distribution, Understanding
the rural consumer, Communication and Poor infrastructure. The
marketer has to strengthen the distribution and pricing strategies.
The rural consumer expects value for money and owing to has
unsteady and meager status of weekly income; increasing the
household income and improving distribution are the viable strategies
that have to be adapted to tap the immense potential of the market.
 Media reach is a strong reason for the penetration of goods like
cosmetics, mobile phones, etc., which are only used by the urban
people. Increasing awareness and knowledge on different products
and brands accelerate the demand. The rural audience are however
critical of glamorous ads on TV, and depend on the opinion leaders
who introduce the product by using it and recommending it.
The rural marketer has to overcome three challenges
At first he has to overcome the challenge of reaching that is to make and
conquer his own place in the market by ensuring that his brand is available
in a good start then he has to ensure that consumers are aware of the brand
he produces. Then at last the challenge is to communicate the right
message that enables the consumers to understand .
Rural market include the following tasks
Segmentation
Geographic segmentation
- climate/irrigation level
- nearness to a town
Demographic segmentation
- population concentration
- age
- income
PRODUCT STRATERGY
The first decision to be made in product strategy in the rural market is
that whether the product that is sold in urban market should be offered as
it is to the rural market or whether it must be adapted and offered. This
depends on the situation and the nature of product. In some cases the
product that is offered to the urban could be offered as it is to the rural
market. In other cases some adaptation will be advantageous.
- Specifically designed products.
tractor-trailer
phillips hand wound radio
other possibilities
offering the colours that are preferred
- Package to the appropriate.
- Brand decisions.
- Positioning decisions.
PRICING STRATEGY
There are 2 views with regard to pricing strategy for the rural market. One
view is that affordability is the key in pricing for the rural market. First
economy is important to them. Low unit price is even more important. Rural
India buys a product more often and buys small packs. Companies have
introduced small packs and coinage pricing to suit these realities.
The other view on pricing strategy for the rural market is that common
prices for both the rural and the urban consumers is more effective. Many
companies go for common models and prices for the two markets.

Special occasion pricing

There is a good scope for special occasion pricing in the rural
market. Companies may either on their own or in tandem with trade or
retailers offer specially discounted prices and concessions during festivals
and marriage seasons.
Strategy on payment terms
Marketers may benefit by offering distinctive payment terms for the
rural market. One half of the market is characterised by seasonality in income
mostly coinciding with harvests. So a harvest repayment scheme with
extension of credit till harvest time can be one alternative. Interestingly,
while some buyers in the rural market may require extended credit with a
harvest Orientation, some do not need any credit what so ever, ever for
purchase of durables.

PHYSICAL DISTRIBUTION
- Problems in transportation and warehousing
- Cost
- Delivery van
CHANNEL MANAGEMENT
- multiple tiers add to the costs
- non-availability of outlets
- poor viability of the outlets
- inadequate banking and credit facilities
 SALES FORCE MANAGEMENT
- Willingness to be located in rural areas
- attitude factor
- knowledge of local language
- ability and willingness for handling several product lines
- managing rural sales force involves added responsibilities
MARKETING COMMUNICATIONS
-constraints in marketing communications in the rural context
-Selecting the media mix
TV
radio
cinema
print media
outdoor
AV units/publicity vans
puppets shows, folk theatre
music cassettes/CDs
 Thus rural marketing is a developing marketing and
rural marketers must be willing to recognise this fact. The
special requirement is that rural marketing should have
elements of development of the rural community built into
them and that is why rural marketing is referred to as
developing marketing. It is often said that markets are
made, not found. This is particularly true of the rural
market of India. It is a market meant for the truly creative
marketer.