Rural Marketing

Lecture-1

Why should we study Rural Market?

Agricultures share in GDP is going down, but, India

still lives in her villages

Urban markets are crowded and saturated The understanding of rural is diffused and

sometimes confusing
Is rural marketing different from urban marketing ?

Defining Rural India

Organisation NSSO ( Census)

Definition

Limitations rural not defined

Population density < 400 / Sq Km 75 percent of the male working population is engaged in agriculture No Municipal corporation / board Town characteristics not defined

Planning Towns upto 15,000 population are Commission considered rural

Contd
LG Electronics All places other than the 7 metros Only clarifies what are the cities

NABARD

All locations with a population upto 10, 000 considered rural

Village & town characteristics not defined

Sahara

Commercial Population establishments located in characteristics unknown areas servicing less than 1000 population

Definition
Acc to National Commission on Agriculture : Rural marketing is a process which starts with a decision to produce a saleable farm commodity and it involves all the aspects of market structure, both functional and institutional, based on technical and economic considerations and includes pre and post harvest operations, assembling, grading, storage, transportation and distribution.

Phases in Rural Marketing

Sr. No
1

Time Frame

Key Events & Trends

Marketing rural

Phase One( Pre 1960s)

products in rural and urban areas Agricultural inputs in rural areas It was a completely an unorganized market,where baniyas and mahajans dominated the market

Phase Two

( 1960s to 1990s)

Green

Agencies like

Khadi and Village Industries Commission, Girijan Cooperatie Societies APCO Fabrics,IFFCO,KRIBHCO Company bloomed and government paid special attention to promote these products. Sale of handicrafts, handloom textiles, soaps ,safety matches and crackers increased on large scale in urban areas.
3 Phase Three(

Revolution Companies like Mahindra and Mahindra, Sri Ram Fertilisers and IFFCO emerge Rural products were also marketed through agencies like KVIC

1990s to Present)

Demand

Mafatlal,Tatas,Birla,Goenkas and others the rural areas progressed socially and economically

for consumables and durables rise Companies find growth in urban markets stagnating or falling

Multinational successfully operating in Rural areas

Hindustan Unilever(HUL) started successful rural

marketing projects like Project Shakti and Operation Bharat in India.Hindustan Unilever began the first home to home operation in rural areas in personal products in 1998 which was known as Operation Bharat. By 1999 Bharat Operation covered 13 million rural household. During the course of operation, there were HUL vans which visited villages across the country distributing sample packs comprising a low unit price pack each of shampoo, talcum powder ,toothpaste and skin cream priced at 15rs.This was to create awareness of the companys product categories and of the affordability of the product.

Conti.
Coca Cola also explored the market by

introducing bottles at rs.5,backed with Aamir Khan advertisement .

Amul is another case in point of aggressive rural

marketing
In 2000,ITC tried developing direct contact with

farmers in remote villages in Madhya Pradesh ITC E-choupal was a result of this initiative.

Few other Multinationals present in Rural India

Colgate,

Everyday batteries
LG Electronics , Phillips BSNL Life Insurance Corporation-LIC Britannia and Hero Honda are trying to seep in rural markets.

Government Spending in Rural

Size of Rural Markets

FMCG Agri-inputs Durables Automobiles (2 & 4 Wheelers) Clothes, footwear etc. Construction material Total
Source: CII Report (2008)

Rs.65000 crore Rs.45000 crore Rs.5000 crore Rs.8000 crore Rs.35000 crore Rs.15000 crore Rs.173000 crore

Problems in Rural Marketing Communication

The literacy rate among rural consumers is very

low. Therefore the print media has very little scope in the rural areas . In India there are 18 languages which are recognized ,these languages and many dialects are spoken in rural India. So, very few Hindi and English speaking population. The transportation infrastructure is extremely poor in rural India. In India there are six lakh villages .Almost 50 per cent of them are not connected by road and railways.

 Availability of appropriate media: The radio

network in theory covers 90 per cent, but people who actually listen is less. T.V is not available in every house in rural areas. Therefore opportunities are very low in rural areas. Warehousing: There are many agricultural products which are produced in a particular season but is demanded throughout. Due to lack of adequate and scientific storage facilities in rural areas, stocks are being maintained in towns only. Electricity shortage Acute water shortage Inadequate consumer finance options

Building Brands in Rural India

Contrary to popular belief people in Rural India

are fiercely brand loyal

Single Brand Villages

Once converted, difficult to dislodge them First mover advantages

Route to Brand Building in Rural

Build customisation
Chotukool from Godrej Boyce, a nano refrigerator

(43 litres cool box loaded from top) Co-created using suggestions from rural women and sold by rural women

Route to Brand Building in Rural

Build Empathy / Relevance
Nokia Life Tools for farming and rural community

Agri information to farmers in association with

Reuters Imparting of knowledge of English language to students by teaching one new word every day

Build Recognition Rural folks understands symbols and

colours better.
Pahelwan Chap MRF Haathi Beedi Laal Sabun Lifebuoy Peela Powder Nirma Toothpaste colgate

Generic products------see examples

Build Access
Distribution in rural India is not a nightmare For FMCG reach villages (feeder markets) in towns

with population 10000 to 15000 For consumer durables reach towns with population of 50000+ and also Look at opportunities in haats, melas, post offices, public distribution system etc.

Build word of mouth

Through effective communication using specific

communication package aimed at specific rural audience

Build word-of-mouth
Importance of opinion leaders Educated village youth as opinion leaders Women and children as demand generators Customised events targeting specific groups with

focused communication

Understanding the Characteristics of the Rural Masses

Very intelligent and clever cannot be

easily hoodwinked.
Daily activity is routinised
Plenty of time / No Sundays

Very conscious of value for money

Understanding the Characteristics of the Rural Masses

Does not like to pay extra for frills he cannot use. Eg. Colour TV High involvement in any product purchased

Eg. Durables
Perceptions, traditions, values vary from state to state

and in some cases from region to region within a state.(MRF Bullock Cart Tyres) Divisions based on caste, community and other hierarchical factors continue to exist.

So how do we communicate with the Rural Folks?

Rural Communication
Keep the communication simple
No scope for gimmicks

Take time in communicating the message

Quickies have no impact.

Think in the local language to capture the local spirit

in the communication aimed at specific region.

Rural Communication
Demonstration a key element for success

Shampoo Demonstration

Dalda Vanaspathi Demonstration

Demonstration