A PROJECT REPORT

On
“Tools And Techniques In Rural Markets”
 What Is a Rural Market
With more than 700 million people living in rural
areas, in some
5,80,000 villages, about two third of its workforce
was engaged in agriculture
and allied activities with a contribution of 29 percent
of India’s Gross Domestic
Product (GDP), India’s economy is predominantly
rural in character.

India’s economy can be thought of as comprising

of two main sectors,
namely, the Rural Sector and the Urban Sector. The
Rural sector is, in turn,
composed of two main sub sectors i.e the agricultural
sub sector and the non agricultural sub sector.
 “India lives in villages”
-Mahatma Gandhi

Reasons for going Rural

• Size of the market

• Largely Untapped
• Too crowded Urban Market
• Income on the rise/disposable income
• Income from other than agriculture
• Income flow from urban/abroad
• Better exposure – media

Rural India buys

Soft Drinks approx 45% of all soft drinks

Almost 50% motor cycles

Approx 55% of cigarettes

Half the total market for TV,Fans,Pressure
cooker,bicycles,Washing
soap,tea,blades,salt,tooth
powder

Coca Cola is growing over 35% in Rural areas

compared to Over 22 % Urban

According to Hasna Research, a market research farm

that has published a Guide to Indian Markets 2006
Consumer durables in Indian Villages risen sharply

TV Sales up by 200%
Motorcycle by 77%

“The future lies with those companies

who see the poor as their customers”
-CK Prahalad

“To get rich, sell to the poor”

-Pradeep Kashyap.
 Problems in Rural Marketing

• Low per capita income

• Low disposable income
• Inadequate fixed income (daily wages)
• Majority – depends on Agricultural Income
• Acute dependence on monsoon
• Consumption linked to harvest
• Infrastructure problems Roads, power
• Low awareness
• Communication-difficult & expensive
• Too many languages
• Geographic Spread

Product Strategy and the 4As

4As
Awareness
Affordable
Acceptable
Available
Companies like HUL, Colgate Palmolive, Coca Cola
and LG have been able to address these challenges
successfully

Rural Customer....... Understand them.....

Illiterate but not fools....

• An Intelligent Thinker
◦ Loyality to regional brands
◦ Brand sitckness
◦ Understand symbols and colours better
• A hard Bargainer
◦ Has his own way of evaluation (touch and feel
of product)
 Techniques In Rural Markets

• Argo Advertising
◦No brands, no advertising
◦'Me too' – communiation efforts
◦Posters
◦Farmers meets
◦Leaflets
◦Demo Farms\

Rural Marketing Common.... One follows other

What To Do?

• Opinion leaders at the top of the hierarchy

continue to play an important role in the decision
making process.
• In spite of multiple sources of communication
few steps continues to dominate the
communication process.
• Women and children are emerging as demand
genrators.
• Word of mouth recommendation by users and
sheer familiarity have a strong role to play in
influencing decisions.
• Apart from opinion leaders, educated village
youths are increasingly influencing decisions
especially of lifestyle products.

Care for every one......

• Rich Villagers
• Aspiring middle class
• Bottom of the pryamid
 Know The Local Language
• Marathi
• Rajasthani
• Hariyanvi
• Pahadi
Ideal Advertising
LG's Advertising Strategies for rural
market...

LG launched its first low price T.V for Rural

Consumers.
-Sampoorna- Rs. 3000
-Cineplus- Rs. 4900

Promotion
• Mobile Vans

• Exibhition

• Road Shows
 HUL
Project SHAKTI

Some Of the proucts sold through project Shakti

LUX at Rs. 5
Lifeboy at Rs. 2
Surfexcel sachet at Rs. 1.50
Pond's Talc At Rs. 5
Pepsodent Toothpaste At Rs. 5
Fair & Lovely Skin Cream At Rs. 5
 ITC – e CHOUPAL

Key success factor self sufficient infrastructure

 IDEA

• Has a customer base of over 17 million.

• Promotional strategy (An Idea can change

your life)

• Idea as an instrument of democracy, bringing

power to the people.

• Social messaging to reach the hearts and minds

of rural India.

• Abhishek Bachchan- presented as a humble

public servant, an agent of change.
 Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level

Coca cola
“THANDA MATLABH COCA COLA”

Coca Cola capture 17.34% rural market till 2009.

 NOKIA
• Variety of product
• Low Price
• Airtel sim free with nokia cell
• Teaching them how to use
• Low price cell phones
• Features useful to them
 Nokia Rural Market

Click to edit Master text styles

Second level
Third level
Fourth level
Fifth level
 Rural India
• In 2001-02, LIC sold 55% of its policies in rural
India.
• Of two million BSNL mobile connections, 50%
are in small towns / villages.
• Of the 20 million Rediffmail sign-ups, 60% are
from small towns. 50% of transactions from
these towns are on Rediff online shopping site.
• 42 million rural households (HHs) are availing
banking services in comparison to 27 million
urban HHs.
• Investment in formal savings instruments is 6.6
million HHs in rural and 6.7 million HHs in
urban.

Rural Consumer Insights

Rural India buys -
• Products more often (mostly weekly).
• Buys small packs, low unit price more important
than economy.
• Rural market involves more intensive personal
selling efforts compared to urban marketing.
• To effectively tap the rural market, a brand must
associate it with the same things the rural folks
do.
• This can be done by utilizing the various rural
folk media to reach them in their own language
and in large numbers so that the brand can be
associated with the myriad rituals, celebrations,
festivals, "melas", and other activities where they
assemble.
Current scenario

• Rural India, which accounts for more than 70 per

cent of the country’s one billion population is not
just witnessing an increase in its income but also
in consumption and production.

• The Union Budget for 2009-10 hiked the

allocation for the National Rural Employment
Guarantee Act (NREGA) to US$ 8.03 billion,
giving a boost to the rural economy. This is in
addition to the ambitious Bharat Nirman
Programme with an outlay of US$ 34.84 billion
for improving rural infrastructure.

• According to a study on the impact of the

slowdown on rural markets commissioned by
RMAI and conducted by MART, the rural and
small town economy which accounts for 60 per
cent of India’s income has not been impacted by
the global economic slowdown.
• The rural consumer market, which grew 25 per
cent in 2008 when demand in urban areas slowed
due to the global recession, is expected to reach
US$ 425 billion in 2010-11 with 720-790 million
customers.

• Several FMCG companies such as Godrej

Consumer Products, Dabur, Marico and
Hindustan Unilever (HUL) have increased their
hiring in rural India and small towns in order to
establish a local connect and increase visibility.

• GlaxoSmithkline Consumer Healthcare (GSK)

and Nestle and are now launching products
specifically for rural markets.

• At present 53 per cent of all FMCGs and 59 per

cent of all consumer durables are being sold in
rural India. The biggest FMCG Company in
India HLL derives more than half of its Rs.
12,000 crore revenues from the rural markets.