AURO

UNIVERSITY

ACKNOWLEDGEMENT

With immense please we are presenting RURAL MARKETING Project report as part of
the curriculum of BACHELOR IN BUSINESS ADMINISTRATION. We wish to
thank all the people who gave us unending support.

I express my profound thanks to module leader DR.ROHIT SINGH not only for
giving excellent guidance, but also for her never ending willingness to deliver
generous research methodologies, timely attention and kind interest.
We also like to extend our gratitude to all staff and our colleagues of College of Management,
who provided moral support, a conductive work environment and the much-needed
inspiration to conclude the project in time and a special thanks to my friends who are integral
part of the project.
Thank You

TABLE OF CONTENTS
ABSTRACT .......................................................................................................................... 4
INTRODUCTION ON RURAL INDIA ......................................................................... 6
OBJECTIVES OF THE STUDY ..................................................................................... 8
RURAL MARKET STATUS ............................................................................................ 9
OPPORTUNITIES FOR MARKETERS .................................................................... 12
OVERVIEW OF THE VILLAGE: SANKRI ............................................................. 15
FMCG SECTOR ............................................................................................................... 17
COMPANIES FAMOUS IN SANKRI VILLAGE .................................................... 22
ANALYSIS AND INTERPRETATION ...................................................................... 24
CONCLUSION ................................................................................................................. 39
SUGGESTIONS ................................................................................................................ 40
REFRENCES ..................................................................................................................... 41

ABSTRACT
Indian Rural Marketing has always been complex to forecast and consist of special
uniqueness. However many companies were successful in entering the rural markets.
They proved with proper understanding of the market an innovative marketing idea, it
is possible to bag the rural markets. It is very difficult for the companies to overlook
the opportunities they could from rural markets. As Two Thirds of Indian
population lives in rural areas, the market is much unexpected for the companies to be
successful in rural markets. They have to overcome certain challenges such as Pricing
and Distribution.
In recent years, rural markets have acquired significance, as the overall growth of thee
conomy has resulted into substantial increase in the purchasing power of the rural
communities. On account of green revolution, the rural areas are consuming a large
quantity of industrial and urban manufactured products. In this context, a special
marketing strategy, namely, rural marketing has emerged.
This is because, most firms try to extend marketing plans that they use in urban areas
to the rural markets. Thus in this research paper an attempt has been made to identify
the challenges as well as opportunities in Indian rural markets. It also includes the
strategies to be followed in Indian rural market for converting challenges into
opportunities.
Rural India represents the Heart of India. About three-fourth of the total population of
the country resides in the rural areas and majority of them are dependent upon
agriculture for their subsistence. Agriculture contributes about 24.7% to the Gross
Domestic Product (GDP) of the country. It also contributes about 13.1% to the total
Indian exports.

INTRODUCTION ON RURAL INDIA

The Indian rural market is an area of darkness to Indian corporate. Rural area is vast
in size but amorphous in detail. And yet, the rural market represents the largest
potential market in the country. With over 70% of Indias population residing in rural
areas, capturing these markets is becoming one of the most lucrative options for all
sectors. In the wake of economic crisis, while the urban markets remain subdued due
to cash crunch, rural economy has remained largely unaffected. A good harvest has
further added to their respite. As a result, marketers are focused on small towns and
villages with dedicated workforce. At present, rural consumers spend about USD 9
billion per annum on FMCG items and product categories such as instant noodles,
deodorant and fabric, with the pace of consumption growing much faster than urban
areas.
The fast moving consumer goods market in rural India is tipped to touch $100 bn
(around Rs 45,735 crore) by 2025 on the back of "unrelenting" demand driven by
rising income levels, according to a study by research firm The Nielsen Company.
Also the Indian rural market is set to become a USD 100 billion opportunity for retail
spending in the next fifteen years, "according to a statement released by the company.
With urban markets getting saturated for several categories of consumer goods and
with rising rural incomes, marketing executives are fanning out and discovering the
strengths of the large rural markets as they try to enlarge their markets.
A survey by the National Council for Applied Economic Research (NCAER), India's
premier economic research entity, recently confirmed that rise in rural incomes is
keeping pace with urban incomes. From 55 to 58 per cent of the average urban
income in 1994-95, the average rural income has gone up to 63 to 64 per cent by
2001-02 and touched almost 66 per cent in2004-05. The rural middle class is growing
at 12 per cent against the 13 per cent growth of its urban counterpart. Even better, the
upper income class those with household incomes of over Rs. one million [$22,700]
per annum is projected to go up to 21 million by 2009-10 from four million in 200102. It will have a 22 to 23 per cent rural component.

Higher rural incomes have meant larger markets. Already, the rural tilt is beginning to
show. In the country we have 0.6 million villages out of which only 13 percent have
population above 2000. The rural economy contributes nearly half of the countrys
GDP (ETIG 2002-03) which is mainly agriculture driven and monsoon dependant.
More than 50 percent of the sales FMCG and Durable companies come from the rural
areas. The McKinsey report (2007) on the rise on consumer market in India predicts
that in twenty years the rural Indian market will be larger than the total consumer
markets in countries such as South Korea or Canada today, and almost four times the
size of todays urban Indian market and estimated the size of the rural market at $577
Billion. It is no wonder that even MNCs have cottoned on to the idea of a resurgent
rural India waiting to happen.

OBJECTIVES OF THE STUDY

To know the Rural Market status in India

To know the consumer buying behaviour
To highlight the Opportunities and Challenges of Rural Marketing in India.
DATE COLLECTION
Primary data
Questionnaire is the primary source of data.
SECONDARY DATA
Data is collected from village panchyat, various Journals, Articles available in various
websites, Text Books etc.

RURAL MARKET STATUS

The market scenario in the rural areas today is changing very rapidly. The boundaries
of nation are disappearing, technological changes are taking place at the flash of an
eye, standards are undergoing changes in no time and so are the fortunes of various
organizations. Rural families have shown no intentions of cutting down their
expenditures on weddings, pilgrimages, construction or consumption. They have their
own set of aspirations and are willing to pay right price for right product. CEOs of a
rural marketing firm says The rural India has cash in hand and is not bound by EMIs
or loans. With the majority of our population based in tier-III, tier-IV cities and
villages, it is the right time to penetrate into rural markets. The consumer in the
village knows his math and doesn't merely want the cheapest product. The way they
define value is similar to the urban consumers." They have sufficient disposable
income and are appreciating brands, customer service, aesthetics and products. There
is a growing demand for television sets, two wheelers, cars etc. There are three fastest
selling categories in rural market. - Rural-rural, i.e. products mainly used in rural
markets eg. Tractors, seeds, fertilizers etc., Rural-urban , i.e. products like bicycle,
transistors, soap, shampoo, battery, washing powder etc. and Urban- urban and the
best penetration in this segment is mobile phones. Nokia have found that farmers are
now getting more familiar with the handsets and it has become a tool of prosperity for
them. Nokia has therefore, lined up various applications exclusively for non-urban
population which will be providing entertainment, education and agricultural
information to subscribers. The village folks previously have no televisions, but now
they are skipping cables and going straight to DTH.
CORPORATE IN ACTION
LG Indias strategy of targeting the rural and semi-urban markets has resulted in
specific gains for the company. In a bid to consciously go deeper and farther into the
hinterland, LG has set up 50 Central Area Offices (CAOs) in B class cities and 59
Remote Area Offices (RAOs), in C class towns, besides its 18 branch offices.

In a bid to acquire rural subscribers, most Indian telecom operators have started
investing in infrastructure to roll out their services in these areas. Realizing this as a
huge potential, small Indian handset manufacturing companies, including Micromax,
Intex Technologies and Karbonn, have lined up a marketing spent of around Rs 100
crore for the financial year 2009-10. These companies are bullish about the Indian
rural market in terms of the number of handsets being sold. As per analysts, almost
60% of the total net additions are from the rural area, which makes this market more
lucrative for these small handset manufacturers.
Nokia, the world leader in mobile phones, introduced SMS alerts from Malayalam
Manorama based on the feedback that newspapers dont reach a lot of villages and it
has received a good response from the rural areas. Nokia has also lined up
applications meant exclusively for the non-urban population, which provide
entertainment, education (helping people learn English, for example) and agricultural
information to subscribers. The first pilot of these applications, called Nokia Live
Tools (NLT), was rolled out in January 2009 in five districts of Maharashtra. Many
of the applications in NLT help those without access to regular TV and newspapers,
with information.
A vehicle density of 2.3%, the Indian rural market is suddenly the cynosure of all
eyes. It is the global economic meltdown that is forcing auto companies to take a real
hard look at this market. Overall, the rural market contributes less than 10% to the
total sales of the industry currently. It is expected to see double digit growth this year,
higher than overall category growth. Realizing the importance of opinion makers,
companies such as Maruti Suzuki, Hyundai Motor India and General Motors
India run special panchayat schemes in these markets. GM India, for instance, runs a
panchayat scheme wherein it gives Rs 2,000 as incentive on every buy of a Spark.
GM India has appointed a marketing firm, RC&M, to help it formulate its strategy for
rural marketing.

The company has around 45 outlets in B category towns. GM says since availability
of finance is limited and the income pattern is seasonal, the number of cash purchases
in rural areas is higher compared to urban areas, and therefore, this market has been
relatively less affected by the credit crisis. Hyundai launched Ghar Ghar Ki
Pehchaan, a scheme targeted at government employees in rural areas and members of
gram panchayats. The company also has a marketing initiative, Hyundai Utsav,
running in tier III cities and rural areas of Punjab and Andhra Pradesh. It looks to
build the brands visibility and creating awareness about the loans and schemes
offered by the company.
After a two year long push into the hinterland, P&G has come up with a new addition
to its marketing strategy in the form of a character called Sangeeta Bhabhi, a
dedicated housewife. The personality was conceived to push P&Gs leading brands,
Tide and Head & Shoulders as a dual proposition called kamyab jodi (Successful
Pair) in rural areas of the country. After much deliberation over the eight to nine
categories that P&G operates in, marketers picked the detergent brand Tide and
shampoo Head & Shoulders as the focus in this particular rural initiative.
The two products, to be specifically created for India, are part of PepsiCos
innovation plank to introduce low cost, nutritional food products and drinks in the
rural market. This project will be called Project Asha.

OPPORTUNITIES FOR MARKETERS

UNTAPPED POTENTIAL
It offers a great chance for different branded goods as well as services for large
number of customers. It is estimated by HLL that out of 5 lakh villages in India , only
lakh has been taped so far , which goes on to indicate the market potentials of the
rural market.
MARKET SIZE AND POTENTIAL
The size of India s rural market is stated as 12.2 % of the percentage of the old
population this means 12.2% of the worlds consumers leave in rural India. In India,
rural household farm about 72% of total household constitutes a huge market by any
standard.
INCREASING INCOME
Different programs undertaken have helped to improve the economic the economic
situation of the rural areas. The increase in income is seen in both absolute values as
well as in the increase in average number of days of occupation in a year.
ACCESSIBILITY MARKETS
Though the road network has not developed to the best possible extent but a fire
amount of development has been made in many regions, making these regions
accessible from the urban region and making in easier for supplying products to these
regions
COMPETITION IN URBAN AREAS
The urban market is getting saturated and thus is enable to provide the much needed
market to many companies and in search of greener pastures many of these companies
are now targeting the rural market.

CHALLENGES OF RURAL MARKETING

The peculiarities of the rural markets and rural consumers pose challenges to the
marketers in reaching them effectively. While making out a case for opportunities that
are rapidly developing in rural markets, one should not underestimate the several
daunting problems in planning for growth. Due to these problems marketing efforts
are constrained in several ways. There are a large number of small villages which are
not easily accessible because of all weather roads. Rural consumers are far less
homogeneous than urban consumers. The main problems rural marketing is
TRANSPORTATION PROBLEMS
Transportation infrastructure is quite poor in rural India. Nearly 80% of villages in the
country are not connected by well constructed roads. Marketing activities require
transportation facilities. Due to poor transportation facilities, farmers and marketers
find it difficult to reach markets.
WAREHOUSING
In the rural areas, there are no facilities for public as well as private warehousing.
Marketers face problem of storage of their goods.
PACKAGING
It is the first important step of product processing. If the packaging cost is high, it
will increase the total cost of products. It is suggested that the marketers should use
cheaper materials in packaging for the rural markets. For example, small polypack of
refined oil is more popular than in containers of the same product due to its lowest
cost. One more important factor is the size package e.g. the size of the package should
be small.
MEDIA PROBLEMS
Media have lots of problems in rural areas. Television is a good medium to
communicate message to the rural people. But due to non-availability of power, as
well as television sets, majority of the rural population cannot get the benefits of
various media.

SEASONAL MARKETING
The main problem of rural marketing is seasonal demand in rural areas, because 75
percent of rural income is also seasonal. For example, the demand for consumer
goods will be high during the peak crop harvesting period, because this is the time at
which the rural people have substantial high cash flow. Rural marketing depends upon
the demand of rural people and demand depends upon income and consumer
behaviour.
LOW PER CAPITA INCOME
Per capita income is lower in rural areas compared to those in urban areas. Again, the
distribution of rural income is highly skewed, since the land holding pattern, which is
basic asset, it is skewed. Thus the rural population presents a highly heterogeneous
spread in the villages.
LOW LEVEL OF ELECTRICITY
The literacy rate is low in rural areas compared to urban areas. This again leads to the
problem of communication for promotion purpose. Print medium becomes ineffective
and to an extent irrelevant in rural areas since its reach is poor.
Besides, for the purpose of optimally exploiting the opportunities at hand in rural
areas, the marketers have to cope up the various challenges before them like
educating the rural consumers about the requirements and uses of the products. The
marketers should also make the rural consumers understand how their product is
different from similar products offered by competitors. This leads to better
involvement on part of buyer and fosters long lasting relationship between consumer
and company. Trust is another key factor which has to be properly dealt with. Thus,
one of the biggest challenges to be met out is to create trust among the rural folks
regarding the products. According to Sanjay Muthal, Managing Director, Nugrid
Consulting, "Trust is another key factor rural consumers are suspicious of urban
market thinking. Rural consumers only buy from people they identify with."

OVERVIEW OF THE VILLAGE: SANKRI

Overview
Sankri is small village located in Bardoli Taluka of Surat district, Gujarat with total
189 families residing. The Sankri village has population of 760 of which 392 are
males while 368 are females as per Population Census 2011.
In Sankri village population of children with age 0-6 is 93 which makes up 12.24 %
of total population of village. Average Sex Ratio of Sankri village is 939 which is
higher than Gujarat state average of 919. Child Sex Ratio for the Sankri as per census
is 755, lower than Gujarat average of 890.
Sankri village has lower literacy rate compared to Gujarat. In 2011, literacy rate of
Sankri village was 67.02 % compared to 78.03 % of Gujarat. In Sankri Male literacy
stands at 75.52 % while female literacy rate was 58.23 %. As per constitution of India
and Panchyati Raaj Act, Sankri village is administrated by Sarpanch (Head of
Village) who is elected representative of village.
Caste Factor
In Sankri village, most of the village population is from Schedule Tribe (ST).
Schedule Tribe (ST) constitutes 77.50 % while Schedule Caste (SC) were 1.05 % of
total population in Sankri village.
Work Profile
In Sankri village out of total population, 431 were engaged in work activities. 96.75
% of workers describe their work as Main Work (Employment or Earning more than
6 Months) while 3.25 % were involved in Marginal activity providing livelihood for
less than 6 months. Of 431 workers engaged in Main Work, 16 were cultivators
(owner or co-owner) while 321 were Agricultural labourer.

Particulars

Total

Male

Female

Total No. of Houses

189 -

Population

760

392

368

Child (0-6)

93

53

40

Schedule Caste

Schedule Tribe

589

302

287

67.02%

75.52%

58.23%

Total Workers

431

243

188

Main Worker

417

Literacy

Marginal Worker

14

FMCG SECTOR
Rural India is a powerhouse propelling the economy's growth. Home to two-thirds of
the country's one billion consumers, it is the zone where almost half of the national
income is generated. Marketers are focussing on the Indian hinterlands to achieve
their revenue targets by increasing their presence into the rural markets. Marketers are
looking the aspiring rural and semi-urban India to yoke growth opportunities. Cable
and satellite penetration has helped in a big way to access hard.to-reach rural areas.
Moreover, advertising budgets for rural markets do nat demand much of the liquidity.
Marketing of products and services through simple ways like village melas (fairs),
nukkad natiiJs (road theatre), boat branding, mobile vans and wall paintings prove to
be very effective and that too at minimal costs.
The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during
the last fifty odd years. The FMCG sector is a foundation stone of the Indian
economy. This sector touches every aspect of human life. Indian FMCG market can
be divided between the organized sector and the unorganized sector. Unlike the US
market for FMCG which is dominated by global players, India's FMCG market
remains highly fragmented with roughly half of the market going to unbranded,
unpackaged and home made products. This presents a tremendous opportunity for
manufacturers and marketers of branded products who can convert consumers to buy
their products.
Around the Globe, the FMCG sector has been successful in selling products to the
lower and middle income groups, and the same scenario is true for Indian markets.
Around more than 70% of sales are made to middle class households today and out of
which more than 50% is in rural India. The sector is excited about a rapidly increasing
rural population whose incomes are rising and which is willing to spend on goods
designed to improve lifestyle. Their advertisements showed Dharmendra riding Escort
with the punch line 'Jandar Sawari, Shandar Sawari'. Thus, they achieved whopping
sales of 95000 vehicles annually.

HUL started 'Operation Bharat' to tap the rural markets. Under this operation it
passed out low-priced sample packets of its toothpaste, fairness cream, Clinic
plus shampoo, and Ponds cream to twenty million households.

lTC is setting up e-Choupals which otTers the farmers all the information,
products and services they need to enhance farm productivity, improve farmgate price realization and cut transaction costs. Fanners can access latest local
and global information on weather, scientific farming practices as well as
market prices at the village itself through this web portal - all in Hindi. It also
facilitates supply of high quality farm inputs as well as purchase of
commodities at their doorstep.

BPCL Introduced Rural Marketing Vehicle (RMV) as their strategy for rural
marketing. It moves from village to village and fills cylinders on the spot for
the rural customers. BPCL considered low-income of rural population and
therefore introduced a smaller size cylinder to reduce both the initial deposit
cost as well as the recurring refill cost.

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.
Impulse to go Rural
Indian rural markets are poised to grow ten-fold by 2025 to become a US$ 100 billion
proposition for retailer, according to the Chairman of HUL. A report by Boston
Consulting Group (BCG) and CII projects that small town and rural customers would
be the single largest market segment constituting 36 per cent of households by 2020,
while rural and urban aspirers will make up the next largest category at 23 per cent of
all households. There are many reasons that have urged the FMCG companies to enter
the uncharted territory of rural India. Some of the attractions are discussed below.

Population
The rural Indian population is large and its growth rate is also high. Over 70% India's
one billion plus population lives in around 6,30,000 villages in rural areas. This
simply shows the great potentiality to marketers.
Percentage distribution of households and income
AREA

HOUSEHOLDS

POPULATION

Rural

72.6

74.6

Urban

27.6

25.4

All-India

100

100

RURAL MARKETING BY FMCG SECTOR

With the urban market saturated, FMCG companies are now targeting the rural
markets. In spite of the income imbalance between urban and rural India, rural holds
great potential since 70% of India's population lives there. Due to the recent
government measures like waiver of loans, national rural employment guarantee
scheme and increasing minimum support price, disposable income in rural India has
been rapidly increasing. However, rural markets present their own sets of problems.
These include poor infrastructure, dispersed settlements, lack of education and a
virtually non-existent medium for communication. Furthermore, retailers cannot be
present in all the centers as many of them are so small that it makes them
economically unfeasible.
Hindustan Unilever Limited (HUL) - Shakti
Hindustan Unilever Limited (HUL) to tap this market conceived of Project Shakti.
This project was started in 2001 with the aim of increasing the company's rural
distribution reach as well as providing rural women with income-generating
opportunities. This is a case where the social goals are helping achieve business goals.

ITC - e-Choupal
The e-Choupal model has been specifically designed to tackle the challenges posed by
the unique features of Indian agriculture, characterized by fragmented farms, weak
infrastructure and the involvement of numerous intermediaries, among others.
Launched in June 2000, 'e-Choupal', has already become the largest initiative among
all Internet-based interventions in rural India. As India's 'kissan' Company, ITC has
taken care to involve farmers in the designing and management of the entire 'eChoupal' initiative. The active participation of farmers in this rural initiative has
created a sense of ownership in the project among the farmers. They see the 'eChoupal' as the new age cooperative for all practical purposes.
KISSAN
IFFCO Kissan Sanchar Limited (IKSL) has conceptualised green SIM Card for rural
community groups wherein the subscribers receive five free voice messages every
day, covering diverse areas from best farm practices to availability of fertiliser and
pesticides. market price of agri-commodities, Government schemes and so on. IKSL
has divided 18 states into 53 agre-c1imatic zones and has made its service available in
18 languages. (ndia rural landscape has been transformed in a way through this
mobile voice message service.
In process of understanding and reaching the scattered rural markets of India, FMCG
majors HUL and ITC have formed a strong rural distribution network over the years.
These networks reach out to the billion dollar consumer market which companies
from various sectors aim to connect with. Hence, companies across sectors such as
telecom, pharmaceuticals, banking and even cosmetics are queuing up to join forces
with FMCG firms to leverage the entrenched network.

Pharmaceutical giants Ranbaxy and Pfizer recently tied up with the FMCG Company,
ITC in order to distribute their over the counter (OTC) products across 6,500 eChoupal centers spread across 40,000 villages. The e-Choupal initiative by ITC is by
far one of the most successful initiatives in empowering the rural farmers thus
building a healthy rural network across 40,000 villages in 9 states. The initiative
currently empowers 4 million farmers while the number is growing fast. The alliance
will open windows for the less equipped consumers in rural areas and provide them
with better medical and healthcare products currently available only in urban cities
and towns.
The Hindustan Unilever (HUL) board also recently announced its strategic alliance
with Tata Teleservices for distribution of latter's telecom products by leveraging
company's distribution network in rural markets in India.
Creating a distribution network from scratch is a costly affair and hence arrangements
with FMCG players are a win-win for both parties as network costs are shared.
However, companies leveraging the FMCG's network will be successful only if they
come up with a differential pricing mechanism, keeping in mind the sensitivity of the
market.
Nonetheless, such tie-ups will induce further consumer brand engagements giving
further exposure to the rural folks and also make them aware of various products and
services available in the market.

COMPANIES FAMOUS IN SANKRI VILLAGE

ANALYSIS AND
INTERPRETATION

ANALYSIS AND INTERPRETATION

Gender:

Male

47.50%

19

Female

52.50%

21

Male
Female

The above data shows that the number of females interviewed were more than that of
males. The above chart also displays the number of males and females been
interviewed.

Marital status

Married
Unmarried
Others

72.50%

29

20%

7.50%

Married
Unmarried
Others

The above table displays the marital status of the people of the village. We can see
that most of them are married, i.e., 72% of them. 20% of are are unmarried and rest
lie the category of others. The chart shows that maximum area is covered by the
married class.

Number of Members in family

5%

12.50%

20%

25%

10

37.50%

15

5 & more

1
2
3
4
5 & more

The table shows that most of the families have 5 or more members in it. And it was
seen that only 2 or 3 are working in a family 8. Also, very few of them are single
families showing more of expenses of the family member which is on the shoulder of
only 2 or 3 of them who are working. Large families may also depict the scenario of
overpopulation where illiteracy might play a role.

Income type
Daily
Weekly
Monthly

55%

22

22.50%

25%

10

Daily
Weekly
Monthly

The chart shows that most of the people earn daily wages. It means they are periodic
or seasonal workers. And also there job doesnt seem to be fixed and income seems to
be unstable. Very few of them lie in the category of weekly and monthly paid. The
ones who lie in the daily section, most of them are labourers at farm and are paid
daily wages. And are also seasonally employed.

Monthly income

0-1000

23.10%

1000-3000

23.10%

3000-5000

35.90%

14

5000 & above

20.50%

0-1000
1000-3000
3000-5000
5000 & above

The above table depicts that majority of people fall in the category of earning 30005000 Rs a month. It was seen that they earn around 100-200 Rs a day which sums up
to 3000 Rs a month. This low level of earning and high expenditure for 4-6 members
in a family is a tough task. A few of them earn 5000 and above. These work as
diamond worker, have their own farm or have their own shops.

Money spent on each (monthly basis)

0-500 Rs.
Transportation

58.30%

21

Household

0%

Healthcare

41.70%

15

TransportaBon
Household
Healthcare

The above table shows how people spent on their transportation, household and
healthcare. The amount lies between 0-500 Rs. Here we can see that people least
spent on transportation. As things are nearby and also public transport are used as and
when necessary, thus not major part of their income is spent on it. Also not much is
spent on health care as due to low income, health is not given much importance. And
also the village does not have any medical shop or a doctors clinic thus automatically
reducing the heath care cost.

500-1000 Rs.
Transportation

35.10%

13

Household

32.40%

12

Healthcare

32.40%

12

TransportaBon
Household
Healthcare

The above table shows how people spent on their transportation, household and
healthcare. The amount lies between 500-1000. Here we can see that almost equal
number of people spent this amount on all the 3 sectors. This nominal amount is spent
for all 3 sectors. Transportation here is high for those who probably go to different
villages or cities for work of those who have their own vehicles. The expense on
household is such may be due to small family size. And health care may be due to
some illness in the family.

1000& above
Transportation

3.40%

Household

93.10%

27

Healthcare

3.40%

TransportaBon
Household
Healthcare

The above table shows how people spent on their transportation, household and
healthcare. The amount lies between 1000 & above. The highest among them is
household sector because the size of family in the village as generally there are more
than 5 members in the family. Transportation and healthcare doesnt cost of such
huge amount.

Mode of transportation used

Public

47.50%

19

Private

30%

12

Both

25%

10

Public
Private
Both

The above table shows mode of transportation used by the villagers. Most of them use
public transportation and a few of them use both the public as well as private. Only a
few of them, i.e., 12 of them use private transport which mainly constitute of cycle
and motor cycle.

Number of private vehicles owned

Nil

40%

16

One

35%

14

2 or more

25%

10

Nil
One
2 or more

The above table shows the number of vehicle the villagers own. Most of them do not
possess a vehicle and mostly use the public transport. The reason may be the
affordability or the requirement. A few of them own 1 and very 25% of them have
more than 2 vehicles.

Source of information
TV

43.60%

17

Radio

64.10%

25

Newspaper

48.70%

19

Hoardings

17.90%

Wall writing

28.20%

11

2.60%

Other

TV
Radio
Newspaper
Hoardings
Wall wriBng
Other

The above chart shows the medium of information about various products to the
villagers. The least one are the hoardings. Low education and cost of hoarding may be
the reason of less of hoardings. Radio and wall writing are very common of them and
are mostly used. Others constitute mainly the word of mouth medium of
communication.

Services used
Banking and insurance

53.80%

21

Internet

12.80%

Telecommunication

84.60%

33

Entertainment

30.80%

12

Banking and insurance

Internet
TelecommunicaBon
Entertainment

The chart and the table above show the services used by the villagers. As we know
cell phones are used in mostly every part of the country. And thus constitute the
maximum number of them. Internet is the least service used may be due to low
education level. And the reason also may be affordability and convenience to use the
service. Less affordability and interest are the reason for low percentage of use of
entertainment service.

Support from the government

Co-operative society

28.90%

11

Employment

36.80%

14

Educational support

63.20%

24

50%

19

Financial support

Co-operaBve society
Employment
EducaBonal support
Financial support

The above chart and table shows what kind of governmental support does the
villagers get. During the survey we found out that most of the villagers were not at all
happy with the government or the panchayat. There was no regular support from the
government to these villagers. In their village, that is Sankari, there were no schools,
no health care clinic and no banks. We think that the vilages are developing, but that
is not true, in this village there were people still living without electricity.
Government provides minimal financial support to the villagers, and that is very rare
not frequently. There were no Co-operative society in this village. Employment is the
headache of the villagers, there is no support from the government related to the
employment.

Consumer durable goods

TV

80%

28

Refrigerator

54.30%

19

Computer

14.30%

Invertors

34.30%

12

Other

11.40%

TV
Refrigerator
Computer
Invertors
Other

The above table and the chart shows usage of consumer durable goods by the villagers. We
have mainly focused on the rural areas so we have interviewed people living in kachcha ghar
and huts. When we visited the village we saw that these villagers didnt have referigerators,
computers and most of them didnt have television. How will these villagers be aware of their
rights, the products available in the market at cheaper rates, and how will they have
information about thow they can fulfil the needs of basic necessities.

CONCLUSION

Rising per capita income, increased literacy and rapid urbanization have caused rapid growth
and change in demand patterns. Apart from the demand for basic goods, convenience and
luxury goods are growing at a fast pace too. The urban population between the ages of 15 to
34 years is expected to increase from 107 m in 2001 to 138 m in 2011, an increase of 30%
per annum. In fact by 2020 it is expected that the average age in India will be 29 years. This
would unleash a latent demand with more money and a new mindset. With growing incomes
at both the rural and the urban level, the market potential is expected to expand further.
While the homegrown companies are looking to expand beyond the Indian shores, the MNC
subsidiaries are likely to look for greater leverage of their respective parent's strength. Since
India is a big potential market, none of the big MNCs can afford to ignore the region for long.
The decade ahead is likely to see more MNCs looking to enter India, as organized retailing
picks up.
Due to the large size of the market, penetration level in most product categories like jams,
skin care, toothpaste, hair wash etc. in India is low. This is more visible when a comparison is
done between the rural and the urban areas. Existence of unsaturated markets provides an
excellent opportunity for the industry players in the form of a vastly untapped market as the
income rises. Another key positive for the sector is the current government's focus making
India the hub of agri-processing.
FMCG products are witnessing a retailing revolution in recent times. While some retail
chains have large retail formats enabling huge volumes, some are focused on affordability
which has resulted in margins getting squeezed. The Indian market is dominated by more
than 12 m small 'mom and pop' retail outlets. However only 4% is in the organized sector,
thereby reducing the reach. With FDI expected to be allowed, the share from the retail
formats is expected to increase.

SUGGESTIONS

DEVELOP NEW PRODUCTS FOR THE RURAL MARKET

Product redesign from the beginning can be done. Marginal changes to existing product will
not work effectively. Product must work in hostile conditions in noise, dust and electricity
blackouts etc.
DISTRIBUTION NETWORK
It should be designed to reach highly dispersed rural markets as compared to highly dense
urban markets.
MORE EFFECTIVE COMMUNICATION
There is a need to find out the appropriate media, which could reach the hearts of the rural
masses. This is required as none of the media like television, print; radio etc has absolute
reach to the rural masses.
PRICING
Products can be priced to build up volume in the rural market, especially for smaller pack
size SKUs.
5. Marketing Research should be undertaken involving focus groups. Marketers should also
build prototypes while strategizing for marketing

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