Rural Marketing in India

“India lives in villages”

- Mahatma Gandhi

Prepared by:-
Trivedi Divyesh
6,38,667 villages, 597 districts, 700 million people, myriad of
languages, many traditions and a rich culture.

A vibrant land with a long history. Rural Indian people are

known as much for their warmth as their diversity.

Welcome to the land of mysticism. The Real Bharat.

EXPLORE THE RURAL MARKETS,

DONOT EXPLOIT THEM
Definition of Rural
» Village with a population <5000
» with 75% male population engaged in agriculture
etc.
» population density <400 sq km
{By:- Government agencies like IRDA (Insurance
Regulatory and Development Agency and NCAER
(National Council for applied Economic Research)}
» 2/3rd of consumers in rural areas(700 million)

» 26% NI generated, increasing purchasing power

» India has 597 districts,

6,38,667 villages
32% connected with pucca roads
68% stilled untapped
EVOLUTION OF RURAL MARKETING

THE GLORIOUS PAST(1940-1990)

THE PULS OF THE PRESENT(1990-2000)
THE FURIOUS FUTURE (2000 onwards)
The glorious past(1940-1990)

1949- Asian Paints first entered

1960- HLL entered with Lifebuoy soap, dominates presence

in more than 1 lakh villages, Colgate, Dabur followed it.

1980- Nirma,Cavincare and Marico entered, Procter and

Gamble also entered.
» The pulse of Present(1990-2000)

70% of rural population lies in villages 1% increase

in purchasing power leads to increase of Rs 10,000
crores in government revenue.
Companies launching plethora of products to cater
changing life style in rural India.
» The Furious of Future(2000 onwards)

The media explosion and satellite invasion have

brought about drastic changes in the consuming
habits of rural Indians and the future would hold a
lot in store for companies entering rural markets.
Rural marketing involves the process of
developing, pricing, promoting,
distributing rural specific product and
a service leading to exchange between
rural and urban market which satisfies
consumer demand and also achieves
organizational objectives.

RURAL MARKETING
FROM / TO RURAL URBAN

URBAN AGRICULTURAL NOT CONCERNED

INPUTS
CONSUMABLES
CONSUMER
DURABLES
FMCG

RURAL Production carried AGRICULTURAL

out in Villages and PRODUCE
the products are
used in villages
Why companies go rural?
In the present scenario, companies operating in
India will have only two options: either to go
Global or go Rural .
Today rural markets are as critical as urban markets
for marketers.
Reasons: urban markets are getting saturated
a huge untapped market
rising disposable income
Impact of media
opportunities
» Infrastructure is improving rapidly. in 50 years only 40%
villages connected by road, in next 10 years another
30%.
» More than 90 % villages electrified, though only 44%
rural homes have Electric connections.
» Rural telephone density has gone up by 300% in the last
10 years; every 1000+ pop is connected by STD.
» Social Indicators have improved a lot between 1981 and
2001 Number of “pucca” houses doubled from 22% to
41% and “kuccha” houses halved (41% to 23%).
» Percentage of BPL families declined from 46% to 27%.
» Rural Literacy level improved from 36% to 59%.
Rural market environment

 The Rural Consumer

 The Rural Demand

 Other Aspests
The Rural Consumer A Detailed Profile
» Size of Rural Consumer Group (73%)(12 Crore
households )
» Literacy Level
˃ Rural India has a literacy rate of 28% compared to
55% of the whole country
» Lifestyle
˃ Conservative & tradition bound
˃ There has been a change in the same over the years though
with
– Increase in Income
– Growth in Education
– Greater Media Penetration
– Marketers efforts to reach and capture the rural market’s
The Rural Demand
» Some well established products
˃ Pressure Cooker
˃ Artificial Jewellery
˃ Cooking Utensils
˃ Medicines
˃ Batteries
˃ Tobacco Products
˃ Scooters, Motorcycles
˃ Soaps,Detergents
˃ Bicycles
˃ Electrical Goods (fan,light)
˃ Radio
˃ T.V
˃ Pesticides, Fertilizers
˃ Wrist Watches
˃ Tea
˃ Mobile Phones
˃ Sewing Machines
Problems in rural marketing

» Scattered population
» Underdeveloped people (136th from 156 )and
Underdeveloped markets.
» Lack of proper physical communication facilities
» Many language and dialects
» Low level of literacy
» Logistic problem and transportation problem
» Less retails outlets
» Seasonal demand
» Traditional life
Rural marketing
strategies
PRODUCT PRICE
» New product designs » High light value not
» Sturdy products price
» Brand name » Avoid sophisticated
» Small unit packing packing
» Low price packings » Product sharing
services
 DISTRIBUTION
» Use of cooperative society (4 L)
» Public distribution system
» Utilization of petrol pump
» Agricultural input dealer
» Shandies/haats/jatharas/melas
» Van in villages
» Syndicate distribution
PROMOTION STRATEGY
Conventional media or Local media
mass media

TV Wall panting
Hoarding
Radio Shandies
Haats
Cinema Mealas
Jatharas
Print Video van
Folk media
Personal selling
Opinion leader
 Mantra to success
4 Ps= 4 As
» Promotion Awareness
» Price Affordable
» Product Acceptable
» Place Available
» Coca cola
» Arvind mills
» Cavin Care
» Nirma

Example how they entered

Companies already into Rural Market

Company Rural Sales (% of total)

HUL 50
Colgate 50
Godrej 30
Cavinkare 33
Marico 25
Cadbury 25
Cipla 18
Conclusion:-

“The future lies with those

companies who see the poor
(Rural) as their customers.”
-CK Prahalad to Indian CEO's, Jan 2000.