AMM Assignment

Paper Review
07BS3884
1/19/2009

Review of the paper” Keeping in Touch with Rural India” presented by Dr.Ammani in the ICOMBS 09
seminar held in IBS Hyderabad on 5th Jan 2009.

Submitted to:
Dr. G.Radha Krishna

Submitted by:
Saurabh Shekhar
07BS 3884
 ICOMBS 09, IBS Hyderabad

Keeping in Touch with Rural India

Dr. Ammani, ISMS

The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-
thirds of countries consumers live in rural areas and almost half of the national income is generated here.
It is only natural that rural markets form an important part of the total market of India. Our nation is
classified in around 450 districts, and approximately 630000 villages, which can be sorted in different
parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns,
etc.

70 % of India's population lives in 627000 villages in rural areas. According to the NCAER study, there
are almost twice as many 'lower middle income' households in rural areas as in the urban areas. At the
highest income level there are 2.3 million urban households as against 1.6 million households in rural
areas. Middle and high-income households in rural India are expected to grow from 80 million to 111
million by 2007. All these figures are a clear indication that the rural markets offer the great potential to
help the India Inc which has reached the plateau of their business curve in urban India to bank upon the
volume-driven growth.

The rural market in India is vast and scattered and offers a plethora of opportunities in comparison to the
urban sector. It covers the maximum population and regions and thereby, the maximum number of
consumers.

Although the rural market does offer a vast untapped potential, it should also be recognized that it is not
that easy to operate in rural market because of several problems. Rural marketing is thus a time
consuming affair and requires considerable investments in terms of evolving appropriate strategies with a
view to tackle the problems.

The number of people below poverty line has not decreased in any appreciable manner. Thus
underdeveloped people and consequently underdeveloped market by and large characterize the rural
markets. Nearly fifty percent of the villages in the country do not have all weather roads. Physical

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 ICOMBS 09, IBS Hyderabad

communication of these villages is highly expensive. Even today most villages in the eastern parts of the
country are inaccessible during the monsoon.

Among the mass media at some point of time in the late 50's and 60's radio was considered to be a
potential medium for communication to the rural people. Another mass media is television and cinemas.
Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less
when compared to the number of villages. The number of languages and dialects vary widely from state
to state, region to region and probably from district to district. The messages have to be delivered in the
local languages and dialects. Even though the number of recognized languages is only 16, the dialects are
estimated to be around 850.

Mass media is able to reach only to 57% of the rural population. Creating awareness then, means utilizing
targeted, unconventional media including ambient media .For generating awareness, events like fairs and
festivals, Haats, etc., are used as occasions for brand communication. Cinema vans, shop-fronts, walls
and wells are other media vehicles that have been utilized to increase brand and pack visibility. Ideas like
putting stickers on the hand pumps, walls of the wells putting on tin plates on all the trees surrounding the
pond are some of the innovative media used by personal wash like Lux and Lifebuoy and fabric wash
items like Rin and Wheel. Idea was to advertise not only at the point of purchase but also at the time of
consumption. With large parts of rural India inaccessible to conventional advertising media - only 41 per
cent rural households have access to TV - building awareness is another challenge.

Dr. Ammani suggests the marketers should connect with the rural consumer at a human level, as opposed
to an urban or rural level, to ensure success. When building a brand in rural India, word-of-mouth is a
huge motivator. Focused brand-building initiatives—like participation at community events such as
“melas” (village fairs), “haats” (markets), street theater, van campaigns, and puppet shows—generate
positive word-of-mouth and influence buying decisions. Communication is the key when it comes to
marketing in rural India. To communicate effectively, it is important to understand the fears, aspirations,
and hopes of the rural consumer. The challenge doesn’t end with just building brand awareness. While
television and direct marketing activities help rural consumers learn about different brands, ensuring
product availability is even more critical. Marketers in rural India claim that setting up a supply chain that
reaches the remotest rural areas is extremely arduous given the infrastructure in the country.

Citing the example of LIC tapping the extensive branch network of nationalized banks in deep, miles-
from-anywhere locations, she said the model has allowed for unprecedented penetration by LIC into rural

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India. So the critical success factor in succeeding in India's rural markets is the element of trust that a
company has to gain from the rural consumer, Dr.Ammani said in conclusion.

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