Rural Market

COVER PAGE
Emblem University centre address and code No: PC TRAINING INSTITUTE LTD S-54, GOLE MARKET, MAHANAGAR LUCK NOW PH- 0522-2387397, 2386893 CENTRE CODE: 0999
Title of project report
A STUDY ON CONSUMER BEHAVIOR AND MARKETING STRATEGY FOR RURAL INDIA

By
(SHARAD KHARE)
A project report submitted in partial fulfillment of the requirements for Master of Business Administration Of Sikkim Manipal university, INDIA
Sikkim-Manipal university of Distance Education Wing Syndicate house Manipal -576 104
STUDENT DECLARATION
I here by declare that the project report entitled

Submitted in partial fulfillment of the requirements for the degree of
Masters of Business Administration To Sikkim-Manipal University, India, is my original work and not submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes
Place: Date:
(SHARAD KHARE) Reg. NO: 520619579
ii
Examiners certification
The project report of
(SHARAD KHARE)
Is approved and is acceptable is acceptable in quality and from
Internal examiner (Name, qualification and designation)
External examiners (Name, qualification)
iii
university study centre certificate

This is to certify that the project report entitled

Submitted in partial fulfillment of the requirements for the degree of
Masters of Business Administration Sikkim-Manipal university
(SHARAD KHARE)
has worked under my supervision and guidance and that no part of this reports has been submitted for the award of any other degree, Diploma, Fellowship or other similar titles or prize and that the work has not been published in any journal or Magazine. ( Reg. No. -520619579) Certified (Guides Name and Qualification)
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ACKNOWLEDGEMENT
I wish to express my heartiest appreciation to Shri Naresh Gandhi (City Lead) Reliance Infocomm,Gorakhpur, for providing me the opportunity to probe an erstwhile unknown area. I also thank Shri Nikhil Upadhyay (Market Research Executive) & Shri Sanjay Upadhyay (Head of Customer Care) Reliance Infocomm Gorakhpur, for his help and cooperation extended to me during the course of study. I honestly believe that this has been an appreciable value addition to me and would go a long way in helping me achieve my final career objectives. This project would not have taken its current shape without all of these. It is my esteemed pleasure to present this project report and whole heartedly thank each and every one who helped me in this task. I thank my guide, who immensely helped and rendered his valuable advise, precious time, knowledge and relevant information regarding the collection of material and
whose suggestion and guidance has enlighten me on this subject. (SHARAD KHARE)
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PREFACE
Before gamboling into issues like where the Indian rural market stands and the opportunities for corporate to explore there, let's look at the definition of urban and rural India. The Census defined Urban India as - "All the places falling within the administrative limits of a municipal corporation, municipality, and cantonment board etc or have a population of at least 5,000 and have at least 75 per cent male working population in outside the primary sector and have a population density of at least 400 per square kilometer. Rural India, on the other hand, is the area not covered in above definition. India ranks among the top five economies of the world in terms of purchasing power parity, while its GDP ranks eleventh in absolute terms. Combined with the fact that India has the second largest population in the world with over a billion people, this makes India one of the most exciting marketplaces for any consumer products or services industry. The present study aims at exploring the rural market place and studying the consumer behavior in rural markets. The study also emphasizes the advertising strategies to be adopted to suit the consumer behavior.
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CONTENTS
ACKNOWLEDGEMENT.....................................................V ACKNOWLEDGEMENT......................................................V PREFACE ........................................................................VII PREFACE .........................................................................VII CONTENTS...........................................................................VIII CONTENTS.......................................................................VIII PART I EXCUTIVE SUMMARY............................................1 1.0 INTRODUCTION...................................................................1 2.0 OBJECTIVE........................................................................4 3.0 METHODOLOGY..................................................................4 4.0 ANALYSIS.........................................................................6 5.0 CONCLUSION AND RECOMMENDATIONS.....................................8 PART II LITERATURE REVIEW.........................................12 1.0 INTRODUCTION.................................................................12 2.0 DEFINITION OF RURAL MARKETING.......................................13 3.0 CHARACTERISTICS OF RURAL MARKETS .................................15 4.0 HIERARCHY OF MARKETS...................................................18 5.0 RURAL MARKET ENVIRONMENT............................................20 6.0 UNIQUE FEATURES OF RURAL MARKETING IN INDIA..................29 7.0 THE MARKETING MIX........................................................35 8.0 CORE PROBLEM ..............................................................48 9.0 RURAL MARKETING STRATEGIES .........................................51 10.0 ADVERTISING SPEND .......................................................55 11.0 BROAD STRATEGIES OF RURAL ADVERTISING .........................58 12.0 EFFECTIVE COMMUNICATION .............................................60 PART III PROJECT OVERVIEW.........................................63 1.0 INTRODUCTION.................................................................63 2.0 OBJECTIVE......................................................................64 3.0 RESEARCH METHODOLOGY.................................................66 4.0 LIMITATIONS....................................................................68 5.0 ANALYSING THE SYSTEM....................................................68 6.0 CONCLUSION AND RECOMMENDATIONS...................................76 PART IV APPENDICES......................................................81
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1.0 CLASSIFICATION OF RURAL/ COTTAGE INDUSRTY......................81 2.0 STRANGE FACT: AMAZING INNOVATOR ..................................82 3.0 THOMPSON RURAL MARKET INDEX ......................................82 4.0 PRODUCT REDESIGN OR MODIFICATION NEEDS ......................87 5.0 TYPES OF COOPERATIVE ORGANISATIONS .............................89 6.0 SHARE OF COOPERATIVES IN NATIONAL ECONOMY ..................91 7.0 IMPACT OF COOPERATIVES ON RURAL MARKETING ..................92 BIBLIOGRAPHY......................................................................97 BIBLIOGRAPHY................................................................97
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PART I EXCUTIVE SUMMARY

1.0 INTRODUCTION
"India's way is not Europe's. India is not Calcutta and Bombay. India lives in her seven hundred thousand villages." --Mahatma Gandhi, 1926 Marketing in developing countries like India have often been borrowed from the western world. Concepts like Brand identity, Customer relationship management, 4 P's of the marketing mix, Consumer behavior process; Segmentation, targeting and positioning etc. have often been lifted straight from the marketing intelligentsia abroad and adopted in Indian conditions, often with minimal success. Reason lies not in the fault of such concepts, but their integration with the Indian ethos and culture. The rural India offers a tremendous market potential. Nearly two-thirds of all middle income households in the country are in rural India and represents half of India's buying potential. Despite, the strong potential the rural markets are by and large less exploited.
Consider the market; out of five lakh villages in India only one lakh have been tapped so far. According to us if the rural market has to be adequately tapped, there has to be a change in the way marketing concepts learnt in B-schools with adequate adoption according to scenarios prevalent in rural India. From time immemorial there has been regular trade between rural and urban areas. With increasing disposable income the rural population also aspires to improve its lifestyle. Thus, the urban manufacturing and service sectors have entered the rural scene with consumables, durables and services, though traditionally very few companies like those marketing tea, cigarettes and match boxes were operating there. Now it is not uncommon to find well-known brands of cigarettes, tea sachets, toilet soaps and detergents in remote villages. There are hamlets where sophisticated products like television sets, transistor radios, mopeads, table and ceilingfans can also be bought. Marketers of these products recognized the potential offered by rural markets and have entered them in a big way. At many nodal villages, block headquarters or tehsil towns, banks, schools, primary health
centers etc., are also functioning. Many development programs initiated by the Central and state governments have, bringing about all-round development, also opened up the rural market for the manufactured products. For example, the demand for electrical goods like bulbs, radios, table and ceiling-fans has increased appreciably in villages where rural electrification has taken place. Mostly, it has been observed that these goods and services have penetrated the rural market as spillover from urban areas without much conscious effort by the marketers. But today, most manufacturers faced with stiff competition and near
saturation levels reaches in urban areas, are consciously focusing their marketing energies on the hitherto neglected rural areas. Not only have they come to the stage of recognizing rural areas as offering great potential but also as a fast growing market. According to some rough estimates, the rural market is growing at the rate of Rs. 350 to 400 crore per annum. Rural marketing is thus a two-way marketing process. Its content now encompasses inflow of products into rural areas
for production or consumption purposes, and also outflow of products to urban areas.
2.0
OBJECTIVE
The object of the research A Study on Consumer Behavior and Marketing Strategy for Rural India is to study: o The changing profile of rural consumers; o Importance of Rural Media and Distribution system- its problems and opportunities; o Knowing about latest advertisement and Message in the advertisement; o Effect of advertisements in the buying pattern (Product adaptation); and o Interpreting the information collected and
recommending the ways for effective marketing strategies.
3.0
METHODOLOGY
The project was completed in following stages as detailed in the Report. Firstly the detailed information about the working
style, lifestyle, buying and consumption pattern in rural areas were collected from literatures and elaborated. This provides a better picture of the nature of work to be done. The objectives, as briefed earlier, were set and sampling, methodology was determined along with the expert guidance of the project guide. Villages, Kirana Shops, Chaupaals, etc were visited for end consumers and data was collected about the changing profile of rural consumers; importance of Rural Media and Distribution system- its problems and opportunities; is advertisement changing their life style? Analysis was done and data was interpreted and inferences were drawn and transformed to meaningful information to help management to get a vivid picture and to make accurate decision thereafter. A descriptive approach has been adopted in the study. The data has been generated through extensive survey method. Sufficient time was given at each village for extracting the desired information.
4.0
ANALYSIS
Data collected were analyzed and converted into meaningful information. It is a fact that: o About 74% of the population resides in Rural India. o 50% of the national income comes from rural areas. o 60%of agriculture income share comes from rural India. o Metros and other principal cities, overwhelmed by the competition, are getting saturated. o Necessity to penetrate the semi urban and rural markets. o These have financially grown better and carry great potential. o Mainly joint families consisting of 8 to 20 members characterize lifestyle. o Main source of income is agriculture. o Haats are main markets that are held twice or thrice a week. Mandis are stationery markets held daily.
Due to the increase in literacy rates and the penetration of conventional media, the perception and attitude of the rural consumer is changing, moving towards proper consumerism. Not only this, attitude and consumption habits of rural consumers are also changing and becoming more modern in an urban sense. Following problems and limitations were observed from the study regarding advertising and marketing in Rural India: o Unknown rural boundaries with potential markets o Unknown customer profile o Unknown effectiveness of media tools o Lack of infrastructure o High cost inputs o Non acceptability of rural audience in campaigns o Lack of trust on the implementer o Lack of structured monitoring and feedback
mechanism. o Reading patterns are local in nature. National
newspapers have negligible circulation. Literate people
like school teachers, Gram Pramukh or Sarpanch are opinion leaders. o Electronic media is less effective due to Lack of power supply and lack of connectivity
5.0
CONCLUSION AND RECOMMENDATIONS

The paper presents the modified version of Philip Kotler's famous marketing mix consisting of 4P's. The focus is on its modification and subsequent customization to Indian rural market's perspective. The 4P's have to be modified to include 1 P i.e. Packaging and 1 R i.e. Retailer as special focus areas. Further to ensure the sustainability of the marketing mix two E's i.e. Education and Empowerment have to be at the core as they help in generating widespread participation from the rural clientele by enhancing their standard of living. The Products in the rural market should essentially operate at the basic and expected level of product classification. They should essentially meet the basic needs of the consumer and should be a no-frill product, as the consumer
would not be valuing much any further addition to the product concept. Companies also face a daunting task in communicating about their products to the consumer due to lack of literacy and failure of traditional media to penetrate in the rural households. Hence, the advertising mix has to be more towards nonconventional yet effective medium like Puppetry, Folk Theater & Song, Wall Painting, Demonstration, Posters, Agricultural Games, NGO's network, etc. Thus overall either the product or communication or preferably both need to be customized to target the rural customer. In terms of physical distribution due to lack of infrastructure the costs are very exorbitant to reach the rural customer. Thus, mediums like rural marketing vehicles and meals and haats provide better opportunities to meet customer needs. Also the existing distribution would need a transformation to achieve the required penetration levels as success of Project Streamline of HLL has shown.
Since, the value for money concept is more important rural customers, there has to be an approach of treating customer as budget seeking consumer. Here, fitting the consumer needs into an affordable price point is pursued first and then other features of product are fitted in. Similarly, packaging has to meet customer needs of better brand recall and introducing favorable price points. At the same time the importance of retailer has to be recognized where he is one of the most major influencer is customer's decision-making process. He acts as the friend and guide in this process and hence, needs to be managed effectively through promotion programs and incentives to promote the brand of a company. In order to bridge the gap between Philip Kotler and countryside Indian what is needed the appreciation of unique features of rural India and thus, responding to them by making adequate improvements in the application of the marketing concepts learnt in the class. For achieving the desired results of capturing the rural customer a comprehensive approach to the traditional marketing concepts has to be taken. This marketing mix has
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to be responsive to customer's needs and fit into his life as a tool of self-enhancement. To be successful the concept of marketing has to be taken in conjunction with its economic, psychological and social implications. As per NCAER projections, the number of middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India. The study on ownership of goods indicates the same trend. It segments durables under three groups - (1) necessary products Transistors, wristwatch and bicycle, (2) Emerging products B&W TV and cassette recorder, (3) Lifestyle products - CTV and refrigerators. Marketers have to depend on rural India for the first two categories for growth and size. Even in lifestyle products, rural India will be significant over next five years.
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PART II LITERATURE REVIEW

1.0 INTRODUCTION
There are various reasons why every industry is taking a very serious look at rural markets: About 285 million live in urban India whereas 742 million reside in rural areas, constituting 72% of India's population resides in its 6, 00,000 villages. The number of middle income and high income households in rural India is expected to grow from 80 million to 111 million by 2007 while urban India is expected to grow from 46 million to 59 million. Size of rural market is estimated to be 42 million households and rural market has been growing at five times the pace of the urban market More government rural development initiatives. Increasing agricultural productivity leading to growth of rural disposable Income. Lowering of difference between taste of urban and rural customers. Many companies like Colgate-Palmolive, HLL, Godrej
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etc have already made forays into rural households but still capturing the markets is a distant dream. Most marketers still lack in depth knowledge to analyze the complex rural market.
2.0
DEFINITION OF RURAL MARKETING

The urban to rural flow covers goods and services of all agricultural inputs like fertilizers, pesticides, seeds, tractors, power tillers, etc., consumable like bath and washing soaps, detergents, cosmetics, cigarettes, beverages etc., and consumer durable like bicycles, mopeds, television sets, radios, clocks, electrical goods, etc. The rural to rural flow limits production and consumption within the rural area itself. Examples of such products are bamboo baskets, ropes, small agricultural tools like plough shares, hand how and other items like window and door frames, padlocks, household earthen and aluminum utensils and the like. Mainly it is the artisans like blacksmiths, carpenters and cobblers who cater to the professional and household needs of the rural people. The rural to urban flow deals with a wide gamut of products. Agricultural products like food grains, oilseeds, cotton,
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sugarcane and others are consumed by urbanites after due processing. Many of these products are basic raw materials for industry, like cotton for textiles, tobacco for cigarettes and beedies, oilseeds for edible oil, sugarcane for crystal sugar and so on. It is estimated that about 40 to 45 percent of the raw materials required by such industries flow from rural areas even today. These apart, there are goods produced by rural industry and rural artesian and craftsmen, which also find a market in urban areas. Examples of such items would be lacquer-coated wooden toys, brassware, handloom textiles, cottage industry products like safety matches, toilet soaps, washing soaps, etc. In fact, there are many organizations engaged in encouraging rural artisans and craftsman like Co-optex, All India Handicrafts Development Corporation, State Handicrafts Development Corporation, State Handicrafts Development and Promotion Corporations, Khadi and Village Industries Commission, Khadi and Village Industries Boards of various states and others. Thus, there is a considerable amount of goods flow from rural to urban sector in terms of agricultural produce, and products of rural artisans and craftsmen. The domain of rural marketing is depicted in following table:
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Definition of Rural Marketing To Rural From Consumable and Urban durable agricultural inputs. Consumables. Consumer durables. From Rural To Urban Outside the scope of this project.
Rural artisans services and Agricultural and products allied production. Rural artisans and rural industry products.
Villagers are not uniform size in terms of population, area under cultivation, types of crops cultivated, economic prosperity, etc. In other words, at first glance each village appears unique and begs a tailor made marketing strategy. Hence, it becomes important for marketers to know the potential available in different villages so that village can be suitably indexed and appropriate marketing strategies can be evolved for each category.
3.0
CHARACTERISTICS OF RURAL MARKETS

There are certain characteristics of rural India, which every prospective marketer needs unleashing his product:
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to be aware
of
before
Low income influenced by seasonal fluctuations Low literacy Diverse customs, languages and social structures Resistant to change Price sensitive High brand loyalty Influenced by traditions
Moderate aspiration levels
Quality Conscious Low to moderate risk taking ability These typical characteristics of the rural market make it evident that there are huge challenges, which an advertiser will face. These challenges need to be tackled using appropriate strategies and proper planning. The major obstacles can be classified as follows: Poor infrastructure facilities, which hamper the effective distribution of products and make the task of reaching the target consumer difficult. Traditional media is ineffective due to illiteracy and non availability.
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There is insufficient past research to provide some insight about consumer behavior. Disposable income is highly dependent on good monsoons and a rich harvest. Varying linguistic and socio-cultural norms
compel the marketer to vary his marketing message for different parts of the same country.
Role of women in buying process is still not
independent of family constraints.

Inadequate credit availability hampers the ability
of rural retailers to carry stocks. Understanding the psyche of the rural consumer and gauging the complexity of the rural market has to be given utmost priority by marketer. Creative marketing Solutions need to be devised to combat these barriers. This apart, rural people also recognize different market places for purchase of different products and services. In short, this can be termed as hierarchy of markets for a rural consumer. Rural consumers have identified places for specific items of purchase. Following table broadly indicates the hierarchy of markets for a rural consumer.
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4.0
HIERARCHY OF MARKETS
A typical rural consumer has a clear identification of market places for different requirements. The first point of contact is the 'village shop', which stocks very essential manufactured goods like tea, beedi, cigarettes, salt, kerosene, matches, edible oils, etc. The next level of market in the hierarchy for a rural consumer is the weekly shandy or haat. These shandies or haats assemble in a particular village at a particular spot on a fixed day in a week. There are a number of such weekly markets in every state in the country. These shandies attract rural people from a radius of about 20 to 25 kms. For a rural consumer the shandy or haat is like a mini super bazaar.
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State Capitals Metros and Cities
Legal Matters and Casual Visits
Terminal Market
Fertilisers, Pesticides, Seeds, Durables, like Cycles, Mopeds, Sewing machines, Jewellery, Dry Battery Cells, Radios, Transistor Radios, Television, Watches, Electrical goods, Agricultural Finance, etc.
Secondary Wholesale Assembling Markets Primary Wholesale Assembling Markets Shandies, Haats Jathras and Melas Village Shops
Cloth, Cosmetics, Soaps, Services, Kitchen Equipments, Agricultural Tools, Bamboo Baskets etc Matchboxes, Cigarettes, Tea, Kerosene, Salt, Edible Oils, etc
Hierarchy of Markets for Rural Consumers
The next market place in the hierarchy is the Primary Wholesale Assembling markets. This is where a rural person goes to sell the agricultural produce soon after harvest. Sometimes these may be called as Secondary Wholesale Assembling markets or Terminal markets, depending upon the place of their location. These are also popularly called "Mandi" towns. In these places, there is a well-established market for selling and buying agricultural produce with a number of market functionaries. While the farmer sells his agricultural produce in these markets, he also purchases
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items like fertilizers, pesticides, seeds, etc. and consumer durables like watches, radios, clocks, etc. A rural consumer may also make an occasional visit to state head quarters or bit cities for any legal matter.
5.0
RURAL MARKET ENVIRONMENT

The rural market in India is much larger than the urban market in terms of population and number of households. The rural market consists of more than 100 million households with a total population of about 740 million. In spite of being larger in size, rural areas are characterized by low per capita income, low literacy, average agricultural productivity, and low level of industrialization. These characteristics of rural India have resulted in limited capacity for consumption of goods and services when compared to consumption levels in any advanced country. To successfully exploit potential offered by the rural market, there is a need to understand the market not just in terms of households and population, but in terms of their occupation pattern, income generation, marketing arrangements for agricultural produce, the process of rural and cottage
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industrialization,
communication
facilities,
infrastructure
development, rural buyer behavior, attitude and belief of rural people and their changing values and aspirations.
5.1 POPULATION
About 70 percent of Indians reside in rural areas. In other words, for every consumer in the urban area, there are three of them in rural areas. Rural population forms a major portion of the Indian population as seen from the following table.
Population in India - Proportion of Rural Vs. Urban Year Rural population in million Proportion to total population (%) Urban Population in million
1951 1961 1971 1781 1991
295.0 360.0 439.0 508.0 621.0
82.6 82.0 80.1 76.0 74.3
62.0 79.0 109.0 160.0 215.0
population (%)Proportion to total
17.4 18.0 19.9 24.0 25.7
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Total population in million 357.0 439.0 548.0 668.0 836.0
2001
741.0
72.2
285.0
27.8
1027.0
5.2 OCCUPATIONAL PATTERN

The main occupation for a vast majority of rural population is agriculture and allied activities. Following table gives the distribution of rural population as per their occupation pattern.
Sl. No. 1. 2. 3. 4. 5. 6. Occupation Agriculture Agricultural labour Business Non-agricultural labour Salary earners Not gainfully employed Total Rural Population Proportion to Total Rural Population (%) 50 27 10 9 2 2 100
Occupational Patterns in Rural India

9% 10% 50% 2% 2%
Agriculture Agricultural Labour Business Non-agricultural Labour Salary Earners Not Gainfully Employed
27%
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5.3
INCOME GENERATION
The occupation patter dictates the pattern of income generation also. The proportion of income generated in rural areas, sourcewise, is presented in following table: Sl. No. 1. 2. 3. 4. 5. 6. 7. Occupation Agriculture Agricultural wages Business and craft Non-agricultural wages Salaries Current transfers Others Total Rural Income Proportion to Total Rural Population (%) 59 16 9 7 3 2 4 100
2% 3% 7% 9% 4%
Agricuture Agricutural Wages Business and Craft Non-agriculturalwages Salaries Current Transfers Others
59% 16%
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5.4 LITERACY LEVEL

The following table shows the literacy level of rural and urban areas for males and female respectively.
Literacy levels 1981 1991 R U R U 41 66 58 81 18 48 31 64 30 57 45 73
Sl.No. 1. 2.
1971 R U Male 34 61 Female 13 42 Total 24 52
Sex
2001 R U 71 87 47 73 59 80
The high literacy rate implies that communication should not prove a hurdle with the rural population, provided appropriate means are chosen. Today, television has proved to be an effective mass medium for communication with the rural masses. The television network in the country today covers nearly 100 per cent of the population offering a greater reach when compared to any other mass medium.
5.5 INFRASTRUCTURAL FACILITIES

Infrastructural facilities like road and communications
network, rural electrification, public distribution system, cinema, television coverage, and the like have also received considerable attention in rural areas.
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A. Rural Electrification Rural electrification has been going on a big way. Statistic indicate tat 5,09,620 villages - which is about 88 percentnow have electricity connection. The rest are in the process of being electrified. B. Rural Communication i) Road Network: The road network of over three million kilometers in India is the largest in the world. By 2007, it can be expected that all the villages with at least 500 persons will be accessible by all-weather roads, which will facilitate the distribution and marketing of products across regional boundaries. ii) Rail Network: The railway network runs through rural areas connecting at least a few thousands of villages. It is estimated that by 2003-04, the total rail length would be 63,122 kilometers. The increase in rail length has also not been very significant and hence possibility of all the villages being networked by rail is currently remote. iii) Television:
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Telecast by Doordarshan covers almost the whole country including the entire rural population. In fact, the rural population covered by any television transmitter is more than the urban population, since a pre-requisite for television is availability of electricity and electricity is now available in 88 percent of the villages. In addition to Doordarshan, there are satellite channels catering to regional interests which also reach some of the villages. C. Rural Credit Institutions For a long time, cooperative societies were the only organized agency for disbursing credit in rural areas, apart from a host of private sources like money lenders, traders, commission agents and others. After banks were
nationalized, in 1969, a number of branches in rural areas have been opened for providing credit to agricultural operations. These agencies have enabled farmers to obtain credit at affordable interest rates for purchase of all
agricultural inputs. In fact, nearly 90 percent of tractor purchases in rural areas are out of the loans provided by State Agricultural and Rural Development Banks and nationalized and non-nationalized commercial banks.
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D. Rural Retail Outlets It is estimated that there are about 20 lakhs private retail outlets in rural areas. This is in addition to cooperative outlets. Nearly 5 percent of the outlets are fair price shops functioning under the public distribution system for supply of essential commodities like sugar, edible oils, food grains, etc. The above figures boil down to the fact that on an average there are about 4 to 5 shops per village. In other words, there is a rural retail outlet for every 350 to 400 persons. Thus, there is a place available for the marketers to store and exhibit their stocks. E. Print Media in Rural Areas The reach of print media in rural areas appears to be very poor except in certain pockets of the country. It is estimated that hardly 5 to 10 percent of newspaper reach rural areas.
F. Rural Areas Requirements The requirements of rural areas can be classified under the following heads: i) Household Consumables
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More and better food More and better clothing Medicines Toiletries and cosmetics Educational supplies Wines and spirits Beverages Cigarettes, beedies, etc.
ii) Household Durables

Furniture Cooking utensils Electrical appliances Radio and television sets Clocks and wristwatches Sewing machines Ornaments and jewellery
iii) Construction Materials

For residences For infrastructure facilities For rural and cottage industries For business establishments For society/community institutions
iv) Consumable Agricultural Inputs

Manure and fertilisers Seeds Insecticides/pesticides and other agro-chemicals
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Tools and implements Petrol, diesel, oil and lubricants Electricity
v) Capital Agricultural Inputs

Tractors and implements Trailers Harvesters, winnowers, threshers Pump sets - oil engine and electrically operated pipes and fittings for irrigation and drainage.
vi) Transportation Equipments

Bullock carts Bicycles, motor cycles and mopeds Jeep/Car Light commercial vehicles
vii) Services
Banking Health Education Transport and communication Electricity
6.0 UNIQUE FEATURES OF RURAL MARKETING IN INDIA

Marketing according to a leading management theorist Peter Drucker can be put in this way "The aim of marketing is to
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know and understand the customer so well that the product or service fits him and sell itself." We feel that the above quote is the gist of marketing, be it in rural areas or urban areas, western world or developing world. Marketing in nothing but creating customers and thus its concepts remain the same. But, due to the differences in the needs, buying behavior, values and aspirations of the customers the marketing concepts have to be modified to be successful. The unique features of rural India, which call for special attention and thus, subsequent changes in the application of marketing concepts, are as follows:
6.1 TRADITIONAL OUTLOOK:

The rural consumer values old customs d tradition. Basic cultural values have not yet faded in rural India. Buying decisions are highly influenced by social customs, traditions and beliefs in the rural markets.
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6.2 LEVELS OF LITERACY:

The literacy rate is low in rural areas as compared to urban areas. This comes in way of the marketer in promoting the product. Advertising is very expensive making it difficult to communicate with the target audience.
6.3 LACK OF PROPER COMMUNICATION AND INFRASTRUCTURE

FACILITIES:
Nearly fifty percent of the villages in the country do not have all weather roads. The Infrastructure Facilities like roads, warehouses, and communication system, financial facilities are inadequate in rural areas making physical distribution becomes costly.
6.4 MANY LANGUAGES AND DIALECTS:

The number of languages and dialects vary widely from state to state region to region and probably from district to district. Even though the numbers of recognized languages are only 16, the dialects are estimated to be around 850.
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6.5 LOW PER CAPITA INCOME:

Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas. Normally the rural consumers spent their income in basic necessities, which makes them very price sensitive.
6.6 UNDERDEVELOPED PEOPLE AND UNDERDEVELOPED MARKET

Rural markets, by and large, are characterized by under developed people and consequently under developed market. A vast majority of the rural people is tradition bound, fatalistic, are mired in age-old customs, traditions, habits, taboos and practices, and are nor financially stable.
6.7 MEDIA FOR RURAL COMMUNICATION

Amongst the mass media, radio was considered to be a potential medium for communication to the rural people in the late 50s or early 60s. A large number of rural families in prosperous areas owned radios and there were also
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community radio sets. Radio programs are being extensively used to diffuse agricultural technology to rural areas. The advent and expansion of television network, appears to be offering another potential medium for easy
communication with rural masses.
6.8 VASTNESS AND UNEVEN SPREAD

The number of villages in India is more than 5 lakh. Again, the villages are not uniform in size. Nearly 67 percent of the villages have only a population of less than 500 persons, which account for 26 percent of the rural population. About half of the rural population lives in villages with a population size ranging from 1,000 to 5,000 persons, such villages being considered as 'medium-sized'. Only 18 percent of the population live in villages with populations of 5,00 persons and above.
6.9 LOGISTICS, STORAGE, HANDLING AND TRANSPORT

Because of the widespread nature and varying size of villages, organising a distribution set-up poses a number of questions. Are there good storage facilities available in rural areas? It has already been seen that the transport facility in
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general is poor in rural areas. A leading company, which distributes its consumable products in rural areas, had even uses bullock carts and camel backs for physical
transportation of goods to inaccessible areas. In some villages there may not be even a shop from where the products can be made available to a rural consumer.
6.10 PRODUCT POSITIONING

In a highly heterogeneous market, product positioning becomes very difficult. Alternatively, the product range should be very large.
6.11 HIERARCHY OF MARKETS

As seen earlier, rural consumers have identified market places for different items of their requirements. So there cannot be uniform distribution policy for all products. It has been seen that 90 percent of the farmers visit the nearest town, where an agricultural-produce-assembling market is situated, at least once a quarter for either selling their produce or for purchasing their requirements. So towns/ mandi centers with large hinterland villages become the focal point. Thus, depending upon the purchase habits of rural
34
people, distribution network for different commodities needs to be different.
6.12 SEASONAL DEMAND

The distribution of any product in the rural areas - either agricultural inputs, consumables or durables should
necessarily follow a seasonal pattern. Since 75 percent of rural income is generated through agricultural operation which is seasonal, the demand pattern is also seasonal. The demand for consumables and durables will be during the peak crop harvesting and marketing seasons. This is the time at which the rural people have substantial cash inflows. Hence, the distribution should be fairly intensive during peak crop harvesting and marketing seasons. This arrangement would result in adequate sales realizations.
7.0
THE MARKETING MIX

The above points indicate the need for subsequent adoption of 'Marketing principles' as propounded by Kotler and other management thinkers, with requisite changes suiting the Indian Market. The marketing mix in the case of Indian rural markets consists of 4P's i.e. Product, Price, Promotion, Place
35
combined with 1 P that is Packaging and one R i.e. Retailer as special focus areas. However, at the base of this marketing mix will be 2 E's of Education and Empowerment.
Retai ler
Packaging
Product, Place, Price and Promotion
The traditional marketing hypothesis tends to ignore the requirement of a developing country's rural needs. The concept of marketing has to be taken in conjunction with economic, psychological and social implications. Hence, the concept of Mega-Marketing where all such factors are taken into consideration while developing the Marketing Mix is more relevant to succeed and build
36
enduring brands. In rural India's case the two most important considerations are Education and Empowerment
opportunities which traditional approaches of marketing fail to acknowledge. Then only the opportunity provided by the rural market can be fully tapped.
7.1 PRODUCT :
"Authentic marketing is the art of identifying and
understanding customer needs and creating solutions that deliver satisfaction to the customers, profits to the producers and benefits for the stakeholders." .Philip Kotler The product offerings have to be not only customized but also at a different plane altogether in case of rural markets. The various product levels as outlined by Philips Kotler, namely Core Benefit, Basic Product, Expected product, augmented product and Potential Product should be adequately taken into consideration and the product offerings should be henceforth customized according to the needs.
37
Potential Product Augmented Product Expected Product Basic Product Core Benifit
Most of the times in the urban market the product is offered at the augmented product level where the objective of the product offering is to exceed the customer expectation. But in the rural markets of India, which have been till date characterized by the absence of the choice, substandard products and cheap clones of their urban counterparts; the immediate level to be operated is the Expected product where his expectations are met. Also, due to the low level of incomes and literacy levels, it is imperative that the basic needs of the consumer are met. For e.g. today in India, 70 percent-of the shampoo market is
38
in sachets. Forty percent of rural workers are daily wage earners and have a daily purchase habit and could do so because of low unit price packs. In real terms because of these packs, shampoos cost less than 14 years ago. Here the product is meeting the basic level of need and providing the benefit of convenience and economy without enthralling or overtly exceeding his expectation. In case of durable goods the rural customers essentially look for a product that is frill free, sturdy and long lasting and in case of consumer goods he looks for products that operate at the basic level and can provide additional benefits in synchronization with their habits and lifestyle. For e.g. success of HLL in the soap category indicate the need to new product development after listening to customer's needs and not blindly applying the urban solutions to rural problems. Following table represents the contribution of rural market to All-India Market. The packaged products have been classified into six categories.
39
Contribution of Rural Market to all-India Market Sl. 1. Product Washing and Cleaning Material 2. Toiletries Name of Products Detergents Soap Cakes/Bars Washing Powders Premium Soaps Popular Soaps Tooth Pastes Tooth Powders Shampoos Safety Razor Blades Shaving Rounds Shaving Creams 3. Cosmetics Talcum Powders Hair Oils Acne Preparations 4. Food/Beverages Packaged Tea Coffee Milk Foods Weaning Foods Beverages 5. OTC Products (Over the counter) 6. Miscellaneous Glucose Powders Rubefacients Cold/Analgesics Batteries Torches Contribution in Percentage 45.5 68.0 55.0 26.0 50.5 39.0 24.5 6.5 50.0 31.0 5.0 43.0 22.0 23.0 40.5 15.0 20.0 18.0 8.0 42.0 38.0 45.0 56.0 33.0
No. Category
40
7.2 PROMOTION :
A. Effective Communication "If you're trying to persuade people to do something, or buy something, it seems to me you should use their language, the language in which they think." David Ogilvy Companies cannot rely on conventional advertising
techniques in India's rural areas where only one in every three households owns a television set and more than half of all villagers are illiterate. Instead, companies need to turn to more innovative methods of advertising to reach their potential customer base. Also what appeals to the urban customer may not appeal to the rural customer due to varying lifestyles. So again, even if the media reaches him, there might not be an impact as it may fail to attract him as fails to connect to it due to the lifestyles being different. Few of the available options in the traditional media are: o Puppetry, o Folk Theater & Song, o Wall Painting,
41
o Demonstration, o Posters, o Agricultural Games, o NGO's network o Elephant March o Rural Van The need for innovative means of communication in rural area can be appreciated by the case study where advertisement on hand pumps and ponds helped in selling more soaps to rural customers. B. Customization: Combining the above two points we would like to stress the need to concentrate on both product development and communication in order to win the mind space of the average rural Indian. Again a concept touted by the marketing gurus regarding product and promotion strategies in International markets (analogy extendable to domestic companies moving from urban to rural areas as well) can be used. Product
Do not change Product Adapt Product Develop new
42
Product Do not change promotion Adapt Promotion
Promotion
Straight Extension Communication Adaptation
Product Adaptation Dual Adaptation
Product Invention
In order to achieve Success Company should avoid straight extension. Rather some form of adaptation be it in preferably product or communication or both. In case of deep pockets, product inventions suited for Indian conditions would be able to generate more returns rather then a simple copied strategy from abroad or urban markets.
7.3 PLACE: PHYSICAL DISTRIBUTION AND CHANNEL MANAGEMENT

For most companies wanting to enter the rural markets, distribution poses a serious problem. Distribution costs and non-availability of retail outlets are major problems faced by the marketers. The various options in distribution in the rural markets, which will be out of the ambit proposed traditionally by the marketing gurus, would be: a.) Rural Marketing Vehicle (RMV) Marketers need to
make more on- ground contact with their target audience as well as make demonstration of products
43
as consumers in rural markets rely on the 'touch and feel' experience. One of the ways could be using company delivery vans which can serve both the purposes b.) Melas and Haats:- According to the Indian Market Research Bureau, around 8000 melas are held in rural India every year and annual sales at melas amount to RS.3,500 crore. Besides these melas, rural markets have the practice of fixing specific days in a week as Market Days when exchange of goods and services are carried out. Also, one satellite town where people prefer to go to buy their durable commodities generally serves every region consisting of several villages. Marketing managers can use these feeder towns they will easily be able to cover a large section of the rural population. The need for innovative distribution techniques to reengineer the existing distribution processes can be appreciated by studying the Project streamline as used by HLL in increasing its reach by adding sub-stockists in its existing distribution.
44
7.4 PRICING THE PRODUCT:

A significant portion of the rural population is paid in daily wages. Daily wage earners tend to have little stock of money, and therefore tend to make purchases only to meet their daily needs. The implication is that pack sizes and price points are critical to sales, and importantly, that rural consumers view the purchase-tradeoff dilemma across a much wider range of product categories. As a result, the nature of competition is much greater; a beverage manufacturer is not only competing with other manufacturers in its category, but also other products that consumers may consider one-off luxury purchases such as shampoo. So marketer will have to examine method by which he can make the product more affordable. In the case of consumer durable one way is to work through rural bank and offer higher purchase terms to consumer. In short, the Value for money is the most Important concept that will differentiate the successful brand from the rest. As explained above in the diagram, a budget-seeking consumer in the rural India takes into consideration first of all
45
the budget available to him and then warranty and after sales service before settling on the brand name and model. Thus, the concept of the product fitting into one's budget is most important consideration while making a purchase decision.
Status seeking Consumer Brand Name Model
Budget - conscious Consumer Budget
Warranty
Technology
After Sales
Image Budget
Brand Name Model
7.5 THE 5TH 'P' OF MARKETING- I.E. PACKAGING

The reason for putting packaging out of the product as a special focus area is that due to low literacy levels the importance Of symbols and packaging become more important in having a high brand recall. Thus, after the 4 p of
46
marketing, it is 5th P, which is packaging going to playa key role in rural markets. Also since the rural customers are usually daily wage earners and they don't have monthly incomes like the ones in the urban areas have. So the packaging is in smaller units and lesser-priced packs that they can afford given their kind of income streams.
7.6 RETAILER: THE COG IN THE WHEEL

Personal & Environmental Factors Psychologi cal Retail er
Problem Recogni tion
Personal
Evaluatio n of Alternati ves
Social
Purch ase Decisi on
Cultural
Informat ion Seeking
Post Purchase Evaluation
Marketing Factors
Product
Pricing
Promotion
Place
Data on rural consumer buying behavior indicates that the rural retailer influences 35% of purchase occasions. Therefore, sheer product availability can determine brand choice, volumes and market share. So, role of retailer is also very important in rural markets, because he would be one
47
who provides information regarding quantity of pack, promotional schemes, influences of advertisement,
consumer feedback etc to company. So the retailer plays a very big role here. The rural customer goes to the same shop always to buy his things. And there is a very strong bonding in terms of trust between the two. The buying behavior is also such that the customer doesn't ask for the things by brand but like -"paanch rupey waali chaye dena. Now it is on the retailer to push whatever brand he wants to push as they can influence the buyer very easily and very strongly on the preferences. Hence, there is the need to get his support through proper trade promotion activities to get more retail shelf and convincing on his side to make the customer buy the brand.
8.0
CORE PROBLEM
The two biggest problems that the rural India faces are Illiteracy and Unemployment. To integrate them in one's Marketing mix ensures that the product or service offered ensures wider participation and better chances of success. Hence, it gives the rise to the concept of two E's: Education and Empowerment at the core of our improved Marketing
48
Mix. This concept presents an opportunity to improve the life of rural Indians and thus, ensure that they actively patronize the company's products. A. Education: Since vast majority of rural India lacks even basic education levels and modern outlook, it is important that the company introducing a new product should look at building category and not just selling products. It is important to consistently drive home the point that the customer's life is going to be enhanced because of product's consumption. B. Empowerment: Because of huge disguised unemployment levels in
agriculture and lack of employment opportunities in other sectors, any concept which uses any scope for income generation would be favored more than the traditional marketing mix concepts. For eg HLL runs the program of Self-Help Groups (SHG), which operate like direct-to-home distributors. The model consists of groups of (1520) villagers below the poverty line (Rs.750 per month) taking microcredit from banks, and using that to buy HLL products, which they
49
will then directly sell to consumers. Similarly ITC aims to help improve farmers' incomes and then help it's own business. Case: E-Choupals ITC has started up to over 2,000 echoupals across India at a cost of about Rs 1.5 lakh (USD 3,400) each in villages. It is now adding 5 a day, with plans to cover 100,000 Indian villages in 5 years (India has a total of 600,000 villages). It is improving Incomes of farmers by: Wiring rural communities with computer access to its etrading platform Offering better on-line prices than auctions for produce Providing quality seeds and on-line agricultural advice. Next, it aims to help its own business by: Growing its commodities business overseas Gaining access to rural consumers Selling goods and services back to the farmers
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Low Production
Low Income
Low Investment in Farm
Low Consumption
High Production
High Income
High Investment in Farm
High Consumption
Thus, it is able to break the vicious circle of Low production, income investment and subsequently low production into high-high scenario as thus increasing consumption for its products.
9.0
RURAL MARKETING STRATEGIES

Like urban markets, it is possible to segment the rural market also on the basis of demographic profile, socioeconomic characteristics, exposure to modernization, and income levels. Given the rural occupation pattern, there are
51
certain specific characteristics, which have to be taken into account. Some of the typical characteristics, include o Landholding pattern (size of holding) o Irrigation facilities (irrigated/un-irrigated) o Progressiveness of the farmers (progressive/ semiprogressive/traditional) o Cropping pattern (predominantly commercial
crops/food crops) o Mix of enterprises (mono culture/diversified) o Education levels (educated/literate/illiterate) o Proximity to cities/towns (population in villages near cities/towns and mandi centers/ remote villages) o Sociological factors (landlord/ small farmers/tenants) o Occupation categories (farmers craftsmen and
artisans/ salaried employees) Since income is the deciding factors of the level of consumption, an income-based segmentation will be very appropriate in the case of rural market also. Where nearly 75 percent of the income-generation is from land in rural areas,
52
land holding pattern or size of holdings can be used in proxy as a basis for segmentation. The classification of farmers based on size of land holding is easily available from published sources and is generally adopted. The land-holding based segmentation is as follows o Marginal farmers holding up to one hectare. o Small farmers holding from 1 to 2 hectares. o Semi-medium farmers holding 2 to 4 hectares. o Medium farmers holding from 4 to 10 hectares. o Large farmers holding above 10 hectares. The landless consumers, like agricultural laborers and rural craftsmen and artisans, can be treated as one segment. Even though this method of segmentation is simple, it suffers from a few defects. These are: o Data pertains only to land owned and does not reflect the area operated, since there is a trend of leasing in or leasing out of land in rural areas. o Data does not say anything about the nature of land (whether irrigated or un-irrigated).
53
o Does not indicate the cropping pattern, like the area devoted to commercial crops and food crops. o Segmentation does not mention the subsidiary
enterprises on the farm like sericulture, dairy animals, sheep and goats. o Data also does not indicate the location of the land (situated in arid zones or in high rainfall areas). These factors can cause considerable different in income for a given size of holding. Yet, in the absence of data on these factors, segmentation based on land holding appears to be the best proxy for income. Gaikwad adopted a sociological basis to study the rural market by dividing it into six segments. These are o Proprietors of land - which includes feudal tribute gatherers like zamindars, rich money lenders and traders who acquired large tracts of land, and companies or persons who own large plantations. o Rich farmers who belong to the dominant caste of the area.
54
o Small
peasants
or
marginal
farmers
owning
uneconomic land holdings. o Tenant farmers operating on rented lands belonging to the large landholders and working on small,
uneconomic land holdings. o Agricultural laborers who work on the lands of landlords and rich farmers. o Artisans and others including the unemployed.
10.0 ADVERTISING SPEND

As per industry estimates, the total advertising spend in India in 2004 was approximately INR 118 billion, a growth of 13.4 percent over the last year. However, India continues to have a low 'advertising spend to GDP' ratio compared to other economies, underscoring the untapped potential.
Relative advertising spend for various countries (USD billion)
GDP Australia China Hong Kong India Malaysia Singapore 412 904 164 485 88 86
TOTAL SPEND 4 6 4 2 1 1
AD AD
SPENT
TO GDP 1.0% 0.6% 2.1% 0.5% 1.0% 0.9%
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South Korea USA France Germany United Kingdom
477 10,384 132 1,984 1560
4 134 1 16 14
0.8% 1.3% 0.8% 0.8% 0.9%
In 2004, the advertising spends for India stood at 0.50 percent of the GDP, up from 0.48 percent the previous year. This is expected to increase significantly due to rising consumerism and growing interest from global brands attracted by this huge and expanding market.
0.55 0.54 0.53 0.52 0.51 0.50 0.49 0.48 0.47 0.46 0.45 2003 2004 2005 2006 2007E 2008E 2009E 2010E
Total advertising spend and GDP
(In %)
Given the increasing number of media channels that consumers are exposed to, brands will have to advertise more frequently and across more channels to generate brand recall.
56
As television channels have multiplied and the content available has become more diverse in the last decade, their viewer ship has increased, niche channels have emerged targeting specific demographic segments and the cost of advertising on television has reduced.
14516 12759 10914 8994 7875 6830 4496 4774 8041 7673
3906
3973
While the broadcasters can dwell on this shared optimism, they must also recognize that advertising budgets are very sensitive to economic downturns. Advertising budgets are not only easily brought down, but the productivity of such expenses is also challenged. Companies are increasingly demanding their advertising agencies to link their fees to performance indicators such as
57
19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05
Number of brands advertised on television
sales increments. With increasing access to state-of-the-art technologies, addressability issues are being put to test, thereby exposing the limitations of current media research findings and measuring the true efficacy of media.
11.0 BROAD STRATEGIES OF RURAL ADVERTISING

The prevalent ways of advertising in rural areas through different existing media and all the alternative and innovative media broadly revolve around three strategies, namely, o Influencer strategy o Participatory strategy o Show-and-tell strategy
11.1 INFLUENCER STRATEGY:

The role of the influencer or influencing communication cannot be ignored as far as rural India is concerned. The advertisements that revolve around this very strategy actually depend on the influence of different influential people and/or events in the villages to put across the message powerfully with more effect and purchase intention. An example of this kind of advertisement may be brand
58
endorsement by any influential person in the village like the 'Mukhiya' or the 'school master'.
11.2 PARTICIPATORY STRATEGY:

Events like different festivals and different games and sports competitions actually have a high participation level in the rural India as other sources of entertainment are very less in those areas. So, these events and shows offer great opportunity to reach rural India cost effectively. Different brands sponsor different events and shows in rural villages which is actually a cost-effective way to advertise with the participatory strategy.
11.3 SHOW-N-TELL STRATEGY:

Many brands are venturing into different ways to educate their rural consumers about their brands and their usage through different shows and events. This kind of initiatives actually creates huge awareness about the brand among the interested people in the rural India. Different health related advertisements like Polio awareness and AIDS awareness programs involve a 'show-n-tell' strategy of advertising.
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12.0 EFFECTIVE COMMUNICATION

An important tool to reach out to the rural audience is through effective communication. "A rural consumer is brand loyal and understands symbols better. This also makes it easy to sell look-alike", says Mr. R.V Rajan, CMD, Anugrah Madison Advertising. The rural audience has matured enough to understand the communication developed for the urban markets, especially with reference to FMCG products. Television has been a major effective communication system for rural mass and, as a result, companies should identify themselves with their advertisements. Advertisements touching the emotions of the rural folks, it is argued, could drive a quantum jump in sales. There is a need to differentiate the brand according to regional disparities. The differentiation may not necessarily be in terms of product content. It may also be in terms of packaging, communication or association with the brand. The brand has to be made relevant by understanding local needs. Even offering the same product in different regions with different brand names could be adopted as a strategy.
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At times it is difficult to pass on an innovation over an existing product to the rural consumer unlike his urban counterpart - like increased calcium or herbal content or a germ-control formula in toothpaste. According to Mr. Shivakumar, HLL, the four factors which influence demand in rural India are - access, attitude, awareness and Affluence. HLL has successfully used this to influence the rural market for its shampoos in sachets. The sachet strategy has proved so successful that, according to an ORG - MARG data, 95 per cent of total shampoo sales in rural India is by sachets. The company had developed a direct access to markets through wholesale channel and created awareness through media,
demonstration and on ground contact. This changed the attitude of the 28 villagers. Today, the young and the educated in the villages are already large in number. And this number is increasing. Already, ~ O per cent of all those graduating from colleges are rural youth. They are the decision makers and are not very different in education, exposure, attitudes and aspirations from their counterparts at least in smaller cities and towns.
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Companies
cannot
rely
on
conventional
advertising
techniques in India's rural areas where only one in every three households owns a television set and more than half of all villagers are illiterate. Instead, companies need to turn to more innovative methods of advertising to reach their potential customer base. Also what appeals to the urban customer may not appeal to the rural customer due to varying lifestyles. So again, even if the media reaches him, there might not be an impact as it may fail to attract him as fails to connect to it due to the lifestyles being different. Few of the available options in the traditional media are o Puppetry, o Folk Theater & Song, o Wall Painting, o Demonstration, Posters, o Agricultural Games, o NGO's network 29
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PART III PROJECT OVERVIEW

1.0 INTRODUCTION
Rural and cottage industries and rural artisans are very significant to the rural economy. They have proved to be a source of employment and income-generation for the landless population who possesses certain skills and talents acquired over generations. Most states have specialized in products like lacquerware, bidriware, rosewood inlay and ivory items of Karnataka; metal craft and brassware of Uttar Pradesh; bandhani and jewellery of Rajasthan; carpets, tapestry and shawls of Kashmir; bell-metal lamps of Kerala; and bronze idols of Tamil Nadu and so on. Most of these skills are family oriented and passed on from generation to generation. Such products have aesthetic value, are priced higher and have a good export market. The significance of rural/cottage industries and rural artisan products can be enumerated as follows. o Provides population. a subsidiary occupation to the rural
63
o Enables the rural population to supplement their slender incomes. o Provides employment during off-season, droughts and famines. o Develops the rural talents, helps uphold our culture. o Reduces evils of urban industrialization. o Suits a country like India very well. There is tremendous scope for developing such rural, village and cottage industries to augment the employment and income of the people in rural areas.
2.0
OBJECTIVE
The Products in the rural market should essentially operate at the basic and expected level of product classification. They should essentially meet the basic needs of the consumer and should be a no-frill product, as the consumer would not be valuing much any further addition to the product concept. Companies also face a daunting task in
communicating about their products to the consumer due to lack of literacy and failure of traditional media to penetrate in the rural households.
64
Hence, the advertising mix has to be more towards non-conventional yet effective medium like Puppetry, Folk Theater & Song, Wall Painting, Demonstration, Posters, Agricultural Games, NGO's network, etc. Thus overall, either the product or communication or preferably both need to be customized to target the rural customer. The object of the research A Study on Consumer Behavior and Marketing Strategy for Rural India is to study: o The changing profile of rural consumers; o Importance of Rural Media and Distribution system- its problems and opportunities; o Knowing about latest advertisement and Message in the advertisement; o Effect of advertisements in the buying pattern (Product adaptation); and o Interpreting the information collected and
recommending the ways for effective marketing strategies.
65
3.0
RESEARCH METHODOLOGY
The project was completed in the following stages: A. Stage 1: Understanding the project: Firstly the detailed information about the working style, lifestyle, buying and consumption pattern in rural areas were collected from literatures and elaborated. This provides a better picture of the nature of work to be done. B. Stage 2: Problem definition and research design: The objectives, as briefed earlier, were set and sampling, methodology was determined along with the expert guidance of the project guide. C. Stage 3: Data collection: Villages, Kirana Shops, Chaupaals, etc were visited for end consumers and data was collected about: 1. The changing profile of rural consumers; 2. Importance of Rural Media and Distribution system- its problems and opportunities; 3. Knowing about latest advertisement; 4. Message in the advertisement;
66
5. Knowing about the media where they saw latest advertisements; 6. Effect of advertisements in the buying pattern (Product adaptation); 7. Is advertisement changing their life style? The respondent's were found to be extremely happy with their daily work at most of the places. However, it was indeed very thoughtful and cooperative of a few of them who gave adequate information to accomplish the project mission. D. Stage 4: Data analysis: Data until analyzed is of no good. Analysis was done and data was interpreted and inferences were drawn and transformed to meaningful information to help management to get a vivid picture and to make accurate decision thereafter. A descriptive approach has been adopted in the study. The data has been generated through extensive survey method. Sufficient time was given at each village for extracting the desired information.
67
4.0
LIMITATIONS
Sample size is very small. Accuracy of findings depends upon extent consumers disclose the information required. It is obvious that while interpreting the responses researcher may deviate and hence biasness would have occurred.
5.0
ANALYSING THE SYSTEM
5.1 METHODS FOLLOWED TRADITIONALLY

Traditional methods of rural marketing make an interesting study and they ought to be analyzed carefully to draw relevant conclusions. Conventionally marketers have used the following tools to make rural inroads: Use of few select rural distributors and retailers to
stock their goods but no direct interaction with prospective consumer. Use of print media or radio but no alternate form of
advertising for promoting their brands More focus on price of product but less attention
devoted to quality or durability Same product features for urban and rural setting with
no customization for rural areas despite differences in the
68
market environment. Low frequency of marketing campaigns.
Little uses of village congregations like haats and
me/as to sell the products. More focus on men as decision makers and buyers.
5.2 CHANGING ATTITUDE OF THE RURAL CONSUMERS: RURAL

CONSUMERISM
Due to the increase in literacy rates and the penetration of conventional media, the perception and attitude of the rural consumer is changing, moving towards proper consumerism. Not only this, attitude and consumption habits of rural consumers are also changing and becoming more modern in an urban sense. Changing Attitude Past Simple living and high thinking Poverty stricken chokes Collectivity Simplicity Security Achievement Patience Restrain
69
Present Consume While it lasts Urbane choices In d ivid u a lity Status driven Risk taking Achievem ent with accumulation Expediency, convenience Indulgence
Durability
Durability with aesthetic
5.3 WHAT IS NEED OF ADVERTISING
IN RURAL
I NDIA ?
o About 74% of the population resides in Rural India. o 50% of the national income comes from rural areas. o 60%of agriculture income share comes from rural India. o Metros and other principal cities, overwhelmed by the competition, are Getting saturated. o Necessity to penetrate the semi urban and rural markets. o These have financially grown better and carry great potential.
5.4 PROBLEMS/LIMITATIONS IN ADVERTISING RURAL I NDIA

A. Problems at strategic level:
AND MARKETING IN
o Unknown rural boundaries with potential markets -This is due to the lack of systematic data and mapping problems
70
o Unknown customer profile -Non familiarity with the customer's psyche, life style, dialect differences etc. creates problems in right messaging. o Unknown effectiveness of media tools -due to lack of information on the effectiveness of print, electronic and outdoor media, problems come in deciding the right media mix o Even if these problems are addressed by the conduct of local survey, marketers face problems at the implementation level. B. Problems at the implementation level: o Lack of infrastructure -Poor conditions of roads and limited means of transport or other connectivity related problems. o High cost inputs -due to non availability of route maps. o Non acceptability of rural audience in campaigns because of huge gap in the profile of the implementer and the target audience
71
o Lack of trust on the implementer because of absence of local references o Lack of structured monitoring and feedback
mechanism: As per 2001 census there are 6, 38,365 villages in India.
5.5 LIFESTYLE OF RURAL AREAS:

o Mainly mainly joint families consisting of 8 to 20 members characterize lifestyle. o Their main source of income is agriculture. During the harvesting season they are cash rich and do most of the shopping at haats and mandies. o Haats are main markets that are held twice or thrice a week, covering villages under 10 to 20km of radius. o Mandis are stationery markets held daily. It is where buying and selling of day-to-day commodities takes place.
5.6 MEDIA EFFECTIVENESS

A. Print media o Reading patterns are local in nature.
72
o National newspapers have negligible circulation. o Literate people like school teachers, gram pramukh or Sarpanch are opinion leaders. B. Electronic media: It is less effective due to Lack of power supply Lack of connectivity C. Outdoor media o Executed at the point of presence of the target audience o Static - Helps in long term brand recall. This includes tasveers, tin plates, posters and tiles etc. o Interactive - has a long lasting emotional appeal. o helps in understanding of the needs and expectations of the masses o This includes road shows, skits and other
entertainment oriented activities.
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5.7 SOME FACTS ABOUT THE RURAL MARKET

70 % of India's population lives in 627000 villages in rural areas. 90 % of the rural population is concentrated in villages with a population of less than 2000. According to the NCAER projections, the number of middle and high-income
households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Packaged consumer products: More than Rs. 2000 crores Market for Non-food items: Rs. 20000 crores growing at 2.5% p.a. Consumption of pesticides: 68,000 tonnes, growing at 12%p.a.
5.8 SHARE OF RURAL MARKET IN OVERALL CONSUMPTION

Toiletries Safety Razor Blades Premium Soaps Tooth Paste Hair Oil OTC products Medicated dress Cold Analgesic Antiseptic Creams Miscellaneous
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48% 24% 20% 20% 25% 42% 28%
Batteries Torches
52% 30%
5.9 PRODUCT ADOPTION

Hair products were introduced to rural India in an attempt to capitalize on a culture where hair grooming is taken extremely seriously by women. While rural women may wear faded saris and little jewelry, few step out without ensuring that their hair is in place. Consumer goods companies introduced a transplanted product from developed markets, the 2-in-1
shampoo/conditioner. Companies thought that women would be attracted to this product because it was cost-effective; however, initial sales were dismal. What companies failed to recognize is that most rural consumers had previously never used shampoo and did not value or understand the full benefits of conditioner. However, several years back, Hindustan Lever focused on product development strategies for rural consumers who still did not use shampoo in India. Their research indicated that a prevailing consumer habit in rural India was to use soap for hair and body care. Rather
75
than try to change instilled consumer behavior, product developers focused on creating an opportunity. Consumers wanted a product that was convenient and low-cost. The result was a new 2-in-1 soap, a product that cleans the hair and body, and is targeted towards consumers in rural areas.
6.0
CONCLUSION AND RECOMMENDATIONS

The paper presents the modified version of Philip Kotler's famous marketing mix consisting of 4P's. The focus is on its modification and subsequent customization to Indian rural market's perspective. The 4P's have to be modified to include 1 P i.e. Packaging and 1 R i.e. Retailer as special focus areas. Further to ensure the sustainability of the marketing mix two E's i.e. Education and Empowerment have to be at the core as they help in generating widespread participation from the rural clientele by enhancing their standard of living. The Products in the rural market should essentially operate at the basic and expected level of product classification. They should essentially meet the basic needs of the consumer and should be a no-frill product, as the consumer
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would not be valuing much any further addition to the product concept. Companies also face a daunting task in communicating about their products to the consumer due to lack of literacy and failure of traditional media to penetrate in the rural households. Hence, the advertising mix has to be more towards nonconventional yet effective medium like Puppetry, Folk Theater & Song, Wall Painting, Demonstration, Posters, Agricultural Games, NGO's network, etc. Thus overall either the product or communication or preferably both need to be customized to target the rural customer. In terms of physical distribution due to lack of infrastructure the costs are very exorbitant to reach the rural customer. Thus, mediums like rural marketing vehicles and meals and haats provide better opportunities to meet customer needs. Also the existing distribution would need a transformation to achieve the required penetration levels as success of Project Streamline of HLL has shown.
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Since, the value for money concept is more important rural customers, there has to be an approach of treating customer as budget seeking consumer. Here, fitting the consumer needs into an affordable price point is pursued first and then other features of product are fitted in. Similarly, packaging has to meet customer needs of better brand recall and introducing favorable price points. At the same time the importance of retailer has to be recognized where he is one of the most major influencer is customer's decision-making process. He acts as the friend and guide in this process and hence, needs to be managed effectively through promotion programs and incentives to promote the brand of a company. In order to bridge the gap between Philip Kotler and countryside Indian what is needed the appreciation of unique features of rural India and thus, responding to them by making adequate improvements in the application of the marketing concepts learnt in the class. For achieving the desired results of capturing the rural customer a comprehensive approach to the traditional marketing concepts has to be taken. This marketing mix has
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to be responsive to customer's needs and fit into his life as a tool of self-enhancement. To be successful the concept of marketing has to be taken in conjunction with its economic, psychological and social implications. As per NCAER projections, the number of middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India. The study on ownership of goods indicates the same trend. It segments durables under three groups - (1) necessary products Transistors, wristwatch and bicycle, (2) Emerging products B&W TV and cassette recorder, (3) Lifestyle products - CTV and refrigerators. Marketers have to depend on rural India for the first two categories for growth and size. Even in lifestyle products, rural India will be significant over next five years. Thus, according to us it is the application of the marketing concepts and not the concepts themselves that need to be looked at. Often, in the rural marketplace it is the application of these concepts, which differs the winning companies from
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the rest of the pack. They are in a position to view their marketing mix in the form of 4+1 P and 1 R, and thereby customize their offerings to the rural market. Further, to ensure a wider participation the Marketing mix at its base should have Education and Empowerment as its core. In order to bridge the gap between Philip Kotler and countryside Indian what is needed the appreciation of unique features of rural India and thus, responding to them by adequate improvements in the application of the marketing concepts learnt in the class.
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PART IV APPENDICES
1.0 CLASSIFICATION OF RURAL/ COTTAGE INDUSRTY
Broadly the rural/cottage industries can be classified under the following heads: a) Agro-based Ghani oil, processing of cereals and pulses, cane gur and Khandsari, palm gur, bee-keeping, coir, fruit processing and preservation and sericulture. Handlooms, polyvastra and Khadi. Match industry, carpentry, bamboo and cane work and handmade paper. Aluminium vessels, brassware, black smithy and agricultural tools. Leather processing.
b) c) d) e) f) g) h) i)
Textiles Wood related Metal wares Leather Pottery and ceramic Chemicals Fishing
Inks and dyes Dried fish
Miscellaneous Non-edible oil soaps, lime, gobar Gas, minor forest produces, shellac, gums and resins.
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2.0
STRANGE FACT: AMAZING INNOVATOR

With a queer psychology of purchase and usage, Indian rural market is still a puzzle to marketers. In many a case, it stretches its imagination to find surprisingly different uses of some of the products. And the red-faced marketers admit that they actually sell their products in areas they would otherwise find difficult, simply because there are other uses for them. For instance. Buffaloes displayed at the haats for sale are dyed an
immaculate black with Godrej hair dye. Horlicks is used as a health beverage to fatten up
cattle in Bihar. In villages of Punjab, washing machines are being
used to make frothy lassi in bulk. Iodex is rubbed into the skins of animals after a hard
day's work to relieve Muscular pain.
3.0
THOMPSON RURAL MARKET INDEX

A successful attempt in the direction assessing the potential of rural markets has been made by Hindustan Thompson Associates Limited. They have developed the 'Thompson Rural Market Index' as a guide to rural marketers. They
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made the first attempt in the year 1972. Since most of the data were available to district level, they collected these data for 334 districts. Then they identified 11 factors to assess the potential. This was not considered to be a very satisfactory approach, hence another attempt was made in the year 1986. During the second attempt, they considered 26 factors for constructing the rural market index. This has been published under the name 'Thompson Rural Market Index' in 1986. Herein they have considered 383 of the 412 districts in the country, since data was available for only these districts. Ultimately, Rural Market Index was worked out for 335 districts. The districts not taken into account either did not constitute rural areas or had a very small rural population. The data on the following indicators was taken for constructing the Rural Market Index. A. Indicators Considered for Rural Market Index
1. Area of the district in sq.km.
B. Demographics
2. 3. 4. 5. 6. Population : Rural No. Males : No. Females : Density per sq. km. Percentage distribution of population by population
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7. 8. 9. 10. 11. 12.
strata Number of Villages Percentage distribution of villages by population strata Literate : Percent of literacy Literate : Literate : Rural No. Males Females
C. Occupation Pattern
13. Cultivators No. 14. Agricultural laborers 15. Non-agricultural laborers
D. Agricultural Related Data

16. 17. 18. 19. Gross cropped areas in hectares Gross irrigated area in hectares Area under non-food crops in hectares Average size of operational holdings in hectares
E. Agricultural Inputs Data

20. Pump sets and tube wells No. 21. Fertilizer consumption in metric tones 22. No. o tractors
F. Rural Electrification Data

23. Percentage of villages electrified
G. Commercial Banks Data

24. No. of rural branches 25. Deposits in Rs. lakh 26. Advances in Rs. lakh
Since the major occupation in rural areas is agriculture, they also collected the value of agricultural output for each district from the Centre for Monitoring Indian Economy, which was
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the overall indicator of rural market potential. To validate the assumption that value of agricultural output is a holistic indicator of rural market potential, a statistical correlation analysis was conducted with 10 selected variables related to agriculture production. The selected ten agriculture variables were o Agricultural laborers o Gross cropped area o Gross irrigated area o Area under non-food crops o Pump sets o Fertilizer consumption o Tractors o Rural credit o Rural deposits and o Villages electrified. It was found that these ten variables had a very high correlation with the value of agricultural output ranging from 0.52 to 0.79. Thompson rural market index book also
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presents the data for each district on the 26 variables chosen. What is needed now is to update the data chosen to know the current potential. Based on the index number, districts have been classified as A, B, C, D and E class markets. The following table summarizes the classification of districts and the proportion of rural market they account for. It is significant to not that the index relies on the ten factors related to agriculture, which have been chosen for the correlation analysis. Any change happening in these variables like, increases in irrigated area or increase in area under commercial crops will have a positive impact on the potential. In other words, any change in these factors on the positive side will increase the value of agricultural output, there by increasing the income of the rural people.
Classification of rural markets Class of Markets A B C D E Index Range 60.00 to 100.00 40.00 to 59.99 30.00 to 39.99 20.00 29.99 Below 20.00 No. of Districts 22 39 54 86 154 Percentage of market 17.8 20.5 20.4 23.0 18.0
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TOTAL
355
100.0
The index can be easily updated with current data and can be used for evolving marketing strategies. One can probably add other factors like road length per sq.km. in the district, railway lines per sq.km. number of post offices, number of television sets, number of two wheelers, etc. to have further validation of the potential given by the index. To summarize, rural demand has peculiar characteristics in terms of its spread, literacy rate, hierarchy of markets, per capita income, etc., which differentiate it from urban demand. Since nearly 70 to 75% of income generation in rural areas is through agriculture and agriculture-related activities, the variables related to agriculture can be safely assumed to be the indicators of the potential of rural market. The Rural Market Index prepared by Hindustan Thompson Associates has proved to be a very useful guide for evaluating the potential of the rural market.
4.0 PRODUCT REDESIGN OR MODIFICATION NEEDS

There are a number of suggestions with regard to designing or modification of products for rural consumers. These
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suggestions need serious consideration if the rural market's potential has to be exploited. For example a suggestion with regard to pressure cookers suggests provision of two long handles on both sides taking into consideration the cooking habits of rural women. It is estimated by Hawkins pressure cooker manufacturers that nearly 43 percent of their pressure cookers are used in rural areas even though they were purchased in urban areas. Most urban households use LPG gas stove or kerosene stoves for cooking. When the cooker has to be removed from fire the flam can be controlled to avoid the hands getting burnt. This is not possible in rural households, since most of them use firewood or charcoal. This creates a risk of getting the hands burnt while removing the cooker. Hence the suggestion of having two long handles on both sides. Similarly no manufacturer has so far thought of a common soap for bathing and washing. Given the incomes of the rural people this may be a good idea. Even to get such ideas one has to observe and understand the habits, customs, traditions, beliefs and taboos followed by rural consumers. In use sophisticated washing machines as butter churners. Similarly
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many farmers in Uttar Pradesh used black hair dye to apply on the buffaloes before sale, to give them a healthy look.
5.0 TYPES OF COOPERATIVE ORGANISATIONS

Statistics indicate that there are about 5,03,9652 cooperatives at all levels and of this, 5,00,997 are primary or village level societies. This amounts to approximately a society of some type of other in every village. Of these, the Primary Agricultural Credit Societies (PACS) are
predominant, accounting for 1,39,512 societies. The rest are non-credit societies, engaged in milk collection, marketing of agricultural produce, agro processing and other activities. Other types of societies include: o Primary agricultural credit societies o Cooperative marketing societies o Cooperative processing societies. o Multi-purpose cooperative societies o Arts and craftsmen cooperative societies o Rural industrial cooperative societies.
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o Consumers cooperative societies o Cooperative fair price shops o Cooperative weaver societies o Cooperative cotton Procurement, ginning and baling societies o Farmers' service cooperative societies. The activities of the societies include: o Providing credit to farmers, artisans and crafts people o Supplying agricultural inputs like fertilizers, pesticides etc. o Marketing of agricultural produce o Processing and marketing of agricultural produce o Supply of essential commodities like sugar, edible oils, kerosene, etc. o Supply of raw materials to artisans, craftspeople and rural industries. o Marketing of rural industrial products o Serving as retail outlets for consumables and durables.
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6.0 SHARE OF COOPERATIVES IN NATIONAL ECONOMY

Since Cooperative organizations exist in every village in some form or another, their share in the national economy is high. As per the statistics maintained by National
Cooperative Union of India, the apex body of all Indian cooperatives, 100 percent of the rural network has been covered, and 67 percent of all rural households are members of one cooperative society or the other. In other words, over 50 percent of rural adults are members of cooperative societies. Since the cooperative organizations deal with several aspects, it is only pertinent to study the role played by them in the national economy. It can be seen from the table that in some sectors of economic activity, cooperatives have a commanding share as and processing, cotton procurement, ginning and baling and storage facility at village-level. For all the activities under the cooperative aegis, there is adequate support by the central and state governments. This apart, the loan availability to this sector is appreciable from NABARD and NCDC.
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7.0 IMPACT OF COOPERATIVES ON RURAL MARKETING

Cooperatives play a significant role in the rural economy. The strength of cooperatives should be understood and the already existing network of distributions had to be used in coverage and extension of rural market. The advantage offered by the cooperative organizations is in distribution and collection logistics because of their widespread nature. The points in favor of cooperative are: o They are widespread throughout the country and cover cent percent of villages, with nearly five lakh societies operating at the village or tehsil levels. o The membership extends to about 67 percent of the rural families and to more than 50 percent of rural adults. This in a way ensures loyalty to their societies. Share of cooperatives in National Sl. No. 1. 2. 3. 4. 5. Activity Rural network in terms of villages covered Agricultural credit disbursed Share in fertiliser distribution Share of nitrogenous fertilisers produced Share in phosphoric fertilisers
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Proportion Covered 100.00% 46.31% 36.60% 14.80% 23.50%
6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
produced Share in sugar production Capacity utilisation in cooperative sugar factories Share in wheat procurement Share in jute procurement Cooperative share of retail fair price shops Share of milk produced tot total production Share of edible oil-seeds procured and edible oils sold Share of spindleage in cooperative spinning and weaving mills Share of cotton produced and marketed Share of cotton procured and marketed Share of fish handled Village-level storage facility Share of soyabean production Proportion of salt manufactured
54.95% 85.70% 27.80% 21.50% 28.00% 6.70% 51.00% 10.00% 67.30% 55.00% 21.00% 62.50% 7.50% 7.40%
Due to the three-tier structure of operations there is a dependable inter-linkage among the organisations at
different levels. The apex body in the three-tier structure at state level, takes the responsibility of procurement, distribution, marketing and collection of dues. So, for a company which takes cooperatives into confidence, collection of orders, supply and
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realisation becomes easy. The contact is restricted to one central places instead of contacting several hundreds of societies. Even though the objective of the cooperatives is to help its members, they are also business organisations with a profit motive for further investment and growth. So, inducing the societies to deal in, and sell, consumables and durables should not pose any problem. The margins earned will only augment the financial position of the societies. The whole cooperative movement has the blessing and encouragement of the central and state governments. For organisations which depend upon rural areas for inputs procurement and output sales cooperatives offer an excellent opportunity. Cooperatives represent existing distribution channels with efficient networks. Since cooperatives are considered as organisations owned and run by the members, it may be easy to build brand loyalty. At the rural level, cooperatives command about 63 percent of the storage capacity.
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There could be a collective guarantee for any credit extended to the cooperative organisations in addition to the state government's. The benefits of dealing with cooperatives can be better understood from the proceeding paragraphs. But the critics of the cooperative movement also have valid arguments about their way of functioning. Since the initiative to promote the cooperatives comes from the governments, the
bureaucratic approach is inbuilt and there is political interference or control, which makes the organization inefficient and ineffective. However, with all these limitations, there are some successful cooperative organizations operating in country like AMUL, IFFCO, KRIBHCO and others. The development and growth of cooperatives depend upon the leadership qualities of the members and the board. It may not be out of place to mention the name of Dr. V. Kurien of Amul fame, who single-handedly elevated the dairy industry to what it is today. In fact, his organization has adequate strength to take on multinationals in various consumables like ice-cream, chocolates and of late, even pizzas?
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It is pertinent to not that cooperatives play an extremely important role in collection and distribution in the rural market and such organizations offer a viable solution for boosting the rural economy. The above facts clearly indicate the role the cooperative organizations play in rural areas in collection and distribution, as well as the potential for future growth.
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BIBLIOGRAPHY
Books and Publications 1. Mathew M. O., et. al., Consumer Motivation with reference to Rural Industries Products. 2. Gopalswamy T. P., Rural Marketing: Environment, Problems and Strategies. 3. Mahendra Mohan, Marketing in Rural India. 4. Mathur V. B. L., Serving the Rural Consumer. 5. Monga J. S., Rural Marketing Planning and Strategy. 6. Kapoor M. C., Profile of a Rural Consumer. 7. Doshi H. N., Promotion and Advertising in Rural Marketing. 8. Ganguly A. S., The Growing Rural Markets in India. Websites GoogleEarth.com
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COVER PAGE

Title of project report

A STUDY ON CONSUMER BEHAVIOR AND MARKETING STRATEGY FOR RURAL INDIA

A STUDY ON CONSUMER BEHAVIOR AND MARKETING STRATEGY FOR RURAL INDIA

(SHARAD KHARE) Reg. NO: 520619579

A STUDY ON CONSUMER BEHAVIOR AND MARKETING STRATEGY FOR RURAL INDIA

Is approved and is acceptable is acceptable in quality and from

Internal examiner (Name, qualification and designation)

External examiners (Name, qualification)

university study centre certificate

A STUDY ON CONSUMER BEHAVIOR AND MARKETING STRATEGY FOR RURAL INDIA

Masters of Business Administration Sikkim-Manipal university

PART I EXCUTIVE SUMMARY

recommending the ways for effective marketing strategies.

mechanism. o Reading patterns are local in nature. National

newspapers have negligible circulation. Literate people

CONCLUSION AND RECOMMENDATIONS

PART II LITERATURE REVIEW

DEFINITION OF RURAL MARKETING

CHARACTERISTICS OF RURAL MARKETS

Moderate aspiration levels

independent of family constraints.

State Capitals Metros and Cities

Legal Matters and Casual Visits

Hierarchy of Markets for Rural Consumers

RURAL MARKET ENVIRONMENT

1951 1961 1971 1781 1991

295.0 360.0 439.0 508.0 621.0

82.6 82.0 80.1 76.0 74.3

62.0 79.0 109.0 160.0 215.0

population (%)Proportion to total

17.4 18.0 19.9 24.0 25.7

Total population in million 357.0 439.0 548.0 668.0 836.0

5.2 OCCUPATIONAL PATTERN

Occupational Patterns in Rural India

5.4 LITERACY LEVEL

1971 R U Male 34 61 Female 13 42 Total 24 52

5.5 INFRASTRUCTURAL FACILITIES

ii) Household Durables

iii) Construction Materials

iv) Consumable Agricultural Inputs

Tools and implements Petrol, diesel, oil and lubricants Electricity

v) Capital Agricultural Inputs

vi) Transportation Equipments

6.0 UNIQUE FEATURES OF RURAL MARKETING IN INDIA

6.1 TRADITIONAL OUTLOOK:

6.2 LEVELS OF LITERACY:

6.3 LACK OF PROPER COMMUNICATION AND INFRASTRUCTURE

6.4 MANY LANGUAGES AND DIALECTS:

6.5 LOW PER CAPITA INCOME:

6.6 UNDERDEVELOPED PEOPLE AND UNDERDEVELOPED MARKET

6.7 MEDIA FOR RURAL COMMUNICATION

communication with rural masses.

6.8 VASTNESS AND UNEVEN SPREAD

6.9 LOGISTICS, STORAGE, HANDLING AND TRANSPORT

6.10 PRODUCT POSITIONING

6.11 HIERARCHY OF MARKETS

people, distribution network for different commodities needs to be different.

6.12 SEASONAL DEMAND

THE MARKETING MIX

Product, Place, Price and Promotion

Product Do not change promotion Adapt Promotion

Straight Extension Communication Adaptation