Rural Marketing

What is Rural?

Any habitation with a population density of less than 400 sq. km., where at least 75% of the male population is engaged in agriculture and where there exists no municipality or board (Census 2001).

The rural and semi urban area is defined as all other cities other than the 7 Metros (LG India).

Locations having shops or commercial establishments with up to 10,000 people are treated as rural (Sahara, ITC, HUL)

Rural Marketing

A function that manages all activities involved in assessing, stimulating, and converting the purchasing power of rural consumers into an effective demand for specific products and services and moving these products and services to the people of rural areas (Kashyap and Raut, 2008).

Urban Rural

Rural

Branded consumables and durables (Organised)

Farm and non -farm goods and services (Unorganised).

Urban X 

Handicrafts, Handlooms, textiles (Semi- organised)

Evolution Of Rural Marketing

Phase 1 (Before 1960s)

Phase 2 (1960s-1990s)

Phase 3 (1990s to present)

Size of the Rural Market

The total size of the rural market is estimated at Rs. 1,23,000 crore, which includes FMCGs, Durables, Agri products and 2/4 wheelers.

Estimated Annual Size : Rural Market

FMCG Rs.65000 crore

Durables Rs.5000 crore

Agri- Inputs Rs.45000 crore

2/4 Wheelers Rs.8000 crore

Total Rs.123000 crore

Source: Francis Kanoi 2002

Factors Affecting Consumer Behaviour.

1. Culture

2. Regional Influences

3. Social Factors

4. Product and Status Symbol

5. Technological Factors

6. Economic Factors

7. Political Factors

Product Strategy and the 4As

Availability Affordability Acceptability Awareness

Companies like HUL, Colgate Palmolive, Coca Cola and LG have been able to address these challenges successfully.

Pricing Strategy

Internal Influences - Cost - Pricing Objective * Profit Maximization in the long run * Minimum Return on Sales Turnover * Deeper Penetration of the Market * Increase Sales Volume and Market Share External Influences - Customers - Suppliers - Competitors - Legal Environment (in India companies need not worry)

Cont.

Optional Product Pricing Captive Product Pricing Low Price Points Avoid Sophisticated Packaging Highlight value, not price

Market Entry Strategies - Penetration Pricing - Coinage Pricing - Psychological Pricing

Distribution Strategy

Problems-1. Large number of small markets2. Poor connectivity3. Multiple tiers (intermediaries) leading to

higher cost. 4. Low density of shops per village.5. Poor stocking system6. Poor visibility and display of products

Target the!

Wholesalers Retailers Haats NGOs having SHGs Mobile Vans Direct to Home Cooperatives

Communication Strategy

Problems

- Heterogeneity and spread

- Understanding the rural Audience Proper profiling of the target audience is required-

* Who uses the brand?

* Who buys the brand and Why?

* Who decides which brand is to be bought?

Rural Media

Conventional Mass Media

Non-conventional Media Personalized Media

Television Haat and Mela Direct Mailer

RadioFolk Media (Puppet

Sows)Demonstrations and

leaflets

Press Video Van Word of Mouth

Cinema Mandi  

Outdoor: Wall Painting, Hoarding Opinion Leaders   

Brand Building

In rural India the first mover brands have become generic brands- detergent powder came to be identified with Surf, vegetable oil with Dalda.

Issues to be considered-

* Brand Name Development

* Creating a Brand Identity

* Building a brand Image

* Stickiness

References

Pradeep Kashyap and Siddhartha Raut, The Rural Marketing Book, 2008.

Sanal Kumar Velayudhan, Rural Marketing : Targeting the Non-urban Consumer,2002

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