9. Rural Marketing (Unit 9)

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RURALMARKETING IN

INDIA


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What is Rural area?

Government agencies like IRDA (InsuranceRegulatory and Development Agency and NCAER(National Council for applied Economic Research)define Rural as :

Village with a population


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What is Rural Marketing?

Rural marketing involves the process of

developing, pricing, promoting, distributingrural specific product and a service leading toexchange between rural and urban marketwhich satisfies consumer demand and also

achieves organizational objectives.

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It is a two-way marketing process

wherein the transactions can be:


URBAN RURAL

URBANRURAL

RURAL RURAL


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Urban to Rural:

A major part of rural marketing falls into

this category. It involves the selling ofproducts and services by urban marketers inrural areas. These include: Pesticides,FMCG Products, Consumer durables, etc.



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Rural to Urban:

Transactions in this category basically fall underagricultural marketing where a rural producer seeks

to sell his produce in an urban market. An agent or amiddleman plays a crucial role in the marketingprocess. The following are some of the importantitems sold from the rural to urban areas: seeds, fruits

and vegetables, milk and related products, forestproduce, spices, etc.



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Rural to Rural:

This includes the activities that take place

between two villages in close proximity(nearness in space) to each other. Thetransactions relate to the areas of expertisethe particular village has. These include

selling of agricultural tools, cattle, carts(horse-drawn vehicle for carrying loads) andothers to another village in its proximity.



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Evolution & Growth of Rural Marketing

Phase I ( from Independence to Green

Revolution): Before the advent of the Greenrevolution, the nature of rural market wasaltogether different. Rural marketing thenreferred to the marketing of rural products in

rural & urban products.



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Phase II (Green Revolution to Pre-

liberalization period): During these times,due to the advent & spread of the GreenRevolution, rural marketing representedmarketing of agriculture inputs in rural

markets & marketing of rural produce inurban areas.



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Phase III (Post-liberalization period on

20th century): The third phase of ruralmarketing started after the liberalization ofthe Indian economy. In this period, ruralmarketing represented the emerging, distinct

activity of attracting & serving rural marketsto fulfill the need & wants of ruralhouseholds, peoples & their occupations.

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Phase IV (21st century): Learning from its ruralmarketing experiences after the independence, the

corporate world has finally realized the quick-fixsolutions & piecemeal approaches will deliver onlylimited results in the rural markets. And, if anorganization wants to tap the real potential of the

rural market, it needs to make a long-termcommitment with this market. Its approach &strategies must not focus in just selling products &services, but they should also aim at creating anenvironment for this to happen.


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The objective of rural marketing in the

current phase is the improvement of thequality of life by satisfying the needs & wantsof the customers, not through attend-aloneproducts or services, but by presenting

comprehensive & integrated solutions whichmight involve a set of interrelated products &services.


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Market Control or Control

Operations

4 As approach of Indian Rural Market

For marketing goods and services intoIndian rural market, now days manycompanies apply the concepts of 4 As forcontrolling and marketing rural market.


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Key

Challenges

4A

Awareness

Affordability

Availability

Acceptability

4 Ps 4 AsPromotion Awareness

Price Affordable

Product Acceptable

AvailablePlace

Mantra of

SUCCESS


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Reasonsfor

Going Rural

Size of the market

Largely Untapped

Too crowded Urban Market

Income on therise/disposable income

Income from other thanagricultureIncome flow from urban/abroadBetter exposure - media

Great success storiesHLL 50%Colgate 50%LG 50%Asian Paints 60%Dabur 40%Videocon 40%Cadburys 25%


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Potential of Rural Market About 285 million reside in urban India as compared to 742 million in rural India.

The number of middle income and high-income household in rural India has grown

from 80 million to 111 million while urban India has grown from 46 million to 59

million.

53 per cent of all FMCGs and 59 per cent of all consumer durables are sold in rural

India.

Rural marketing involves addressing around 700 million potential consumers, over

40 per cent of the Indian middle-class, and about half the country's disposable

income.

The Indian rural market is almost twice as large as the entire market of USA or

Russia.

The rural market for FMCG is Rs. 65,000 crore, for durables Rs. 5,000 crore, for

tractors and agri-inputs Rs. 45,000 crore and two- and four-wheelers, Rs. 8,000

crore. In total, a whopping Rs. 1,23,000 crore.


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PROBLEMS

INRURAL

MARKETING

Low per capitaincome

Low disposable income

Inadequate fixed income

(daily wages)

Majority depends on Agricultural

Income

Acute dependence on monsoonConsumption linked to harvest

Infrastructure problems

Roads, power

Low awareness

Communication- difficult & expensive

Too many languages

Geographic Spread


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Ethical & Legal Aspects of

Marketing

Assignment: -

What do you mean by ethical & legalaspects of marketing? Being a student ofmanagement (i.e. Marketing Management)what kinds of marketing practices you will

adopt if a company hire you for a summerproject which will be related to marketing ofFMCG products into all types of market.


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9. Rural Marketing (Unit 9)

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