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Avish Sute

Rural Rural Marketing in India Importance of rural marketing Rural Marketing Framework Hurdles in Rural Marketing Opportunities Factors driving the growth 4 As Strategies for rural marketing Examples from the Indian corporates Facts & Figures Conclusion

Clear surveyed boundaries not having a municipality, corporation or board, with density of population not more than 400sq.km and at least 75 per cent of the male working population engaged in agriculture and allied activities 638,000 villages in the country 70% of the country's population lives in rural areas 121 crore Indians, 83.3 crore live in rural areas while 37.7 crore stay in urban areas, said the Census of India's 2011

The rural urban distribution is 68.84% and 31.16% respectively The level of urbanisation increased from 27.81% in the 2001 Census to 31.16% in the 2011 Census, while the proportion of rural population declined from 72.19% to 68.84% The number of births in rural areas have increased by 9 crore in the last decade The maximum number of people living in rural areas in a particular state is 15.5 crore in Uttar Pradesh Mumbai tops the list having the maximum number of people in urban areas at five crore 18.62% of the country's rural population lives in Uttar Pradesh and 13.48% urban population lives in Maharashtra

Not a separate entity in itself

It is highly influenced by the sociological and behavioural factors operating in the country Flow of goods from urban sectors to the rural regions as well as its marketing
'Go rural' is the slogan of marketing guru's The Rural population -Nearly 3 times of the urban

Factors driving the Growth

Agriculture revolution
Better Tax Structure Spread of education Improved infrastructure Better banking facilities (financial assistance given by NABARD) Increased penetration of electronic media

Increase in population, & hence increase in demand Large Inflow of Investment Development of Transport & Communication Network Changes in the land tenure system

Source:- http://www.ddegjust.ac.in/studymaterial/mba/mm-310.pdf


Source: http://www.nextbigwhat.com/plundering-rural-india-yes-thats-an-opportunity-297/




Category Penetration

Brand with highest penetration

Toilet Soap Washing cakes/Bars Tea Washing powder / liquid Salt Biscuits

91% 88% 77% 70% 64% 61%

Lifebuoy Wheel Lipton Taaza Nirma Tata Salt Parle G

Hurdles in Rural Marketing

Underdeveloped People & Markets Lack of Proper Physical Communication Facilities Media for Rural Communication Many Languages and Dialects Dispersed Market Low Per Capita Income Low Levels of Literacy Different way of thinking

Infrastructure In 50 years, 40% villages connected by road

More than 90 % villages electrified

Rural telephone density has gone up by 300% in the last 10 years Percentage of BPL families declined from 46% to 27% Rural Literacy level improved from 36% to 59%


First and the foremost challenge, India's 6,38,365 villages are spread over 3.2mn.sq.kms 83.3 crore live in rural areas, reaching them is not easy

Given the poor state of roads, it is an even greater challenge

With low disposable incomes, products need to be affordable to rural consumers, most of them are on daily wages. GODREJ Introduced Cinthol, Godrej and Fairglow in 50 gram packs priced at rs.4/Coca-cola introduced Sunfill ( a powdered soft drink concentrate ) 25 gram pack priced at rs.2/-

There is a need to offer products that suit the rural markets and

Coca-cola is providing low cost ice-boxes because of the lack of

electricity and refrigerators in the rural areas

With large parts of rural India

inaccessible to conventional advertising

media, building awareness is another

Companies like H.L.L uses posters, banners & Wall paintings to create awareness.

Low Per Capita Income

Lack of Formal retail & Distribution Network

Relative Cheapness of Labour Positioning Involves 3 tasks: Identifying the differences of the offer vis--vis competitors offers Selecting the differences that have greater competitive advantage Communicating such advantages effectively to the target audience
Source: http://www.ddegjust.ac.in/studymaterial/mba/mm-310.pdf

Geographic Demographic Psychographic


Source: http://www.ddegjust.ac.in/studymaterial/mba/mm-310.pdf

Source: http://www.indianmba.com/Occasional_Papers/OP219/op219.html

Increase in number of outlets from 80,000 in 2001 to 190,000 in 2005 resulting in increased market penetration from 13 % to 28 %. Tapping the local form of entertainment like annual haats and fairs and made huge investment in infrastructure for distribution & marketing.

Average price from Rs.10 to Rs.5 It doubled the spend on Doordarshan It concentrated its entire advertising towards the rural customer

Methods & strategies by HLLs Shakti

Target Small Villages Direct to home distribute Shaktiman Initiative Urban India accounts for 60% of total FMCG consumption Rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages


* Hariyali Kisaan Bazaar , was set up by DCM Shriram Consolidated Ltd. to facilitate sale of agri-inputs such as fertilizers, pesticides, farming equipment, seeds, animal feed, etc. * ITC 's internet-enabled rural interface to help sale of agri outputs, eChoupal, is presently operational in 6 states and there are 5200 kiosks. * TRIVENI KUSHALI Bazaar, a rural agri-inputs store run by Thriven Engineering Industries Ltd. in the sugarcane belt of U.P., is also used to sell cement and FMCG products. * HUL's Project SHAKTHI - Through the state governments and NGOs involved in microfinance, women entrepreneurs in villages are identified to act as local distribution and sales point

This company introduced the innovative technique of using video vans for marketing Nirma products.

1. 2.

Advantages Reach to interior parts Offer opportunity for personal interaction .

Similar strategies helped Ghadi to become the 3rd largest selling detergent.

The company figured that it needed new cheaper products to lure the rural buyers The company did this by introducing a cheaper range of TV's by the name of Sampoorna More offices in small town was the need of the hour The company went on in a office opening spree and currently it has 40 branch offices that will increase to 150 at the year end

The company introduced its igo range of t.vs priced cheaply at rs.5000 for 14 inches particularly to cater to the backward states like Bihar, Rajasthan and Uttar Pradesh

The companys e-chaupal initiative is a novel idea which bypasses the brokers between the Company and the farmers.

It is helping Indian agriculture to enhance its competitiveness by empowering Indian farmers through the power of internet This unique transformational strategy has become the subject matter of a case study at Harvard b school ,has created for I.T.C a huge rural distribution infrastructure ,significantly enhancing the companys marketing reach


Source: http://www.4psbusinessandmarketing.com/10022011/storyd.asp?sid=4385&pageno=3

Source: http://www.nextbigwhat.com/rural-india-has-31-million-internet-users-297/



Rural markets are for marketers with perseverance and creativity. The market is extremely attractive with its vast potential but also provides challenges It is a classic case of risk return situation. It is a high risk area but with the promise of a large customer following as the prize for those who succeed

The key to reducing the risk is to understand the market, the consumer need and behaviors


http://www.indiabix.com/groupdiscussion/indian-villages-our-strength-or-ourweakness/ http://www.scribd.com/doc/55654064/Major -Agricultural-Revolution-in-India

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