Introduction to Rural MarketingMarket – Rural – “any market that exists in an area with less than 10,000

population, low density of population and without significantinfrastructure facilities is a rural market.”

Rural Marketing

1. Agricultural marketing – agricultural produce2. Agricultural inputs marketing – green revolution, use of high

yielding seeds, fertilisers, pesticides and agricultural machinery.3. Consumer goods marketing – consumer durables and goods

Profile of rural demand

1. Rural v/s urban demand2. Rural markets – classification of goods and services3. Traditional and new products4. Composition of rural demand5. Size of rural demand6. Consumption of Goods – rural v/s urban7. Ownership of assets8. Rural contribution to product – wise sales

Rural Development

Rural Environment

Rural Infrastructure1. Housing2. Water supply3. Health4. Road network5. Rural electrifications6. Communication facilities

Government initiativesRural infrastructure development programmeNational Food for Work programmeSampoorna Gramin Rozgar YojanaPradhanmantri Gram Sadak YojanaRashtriya Bal Swasthya YojanaSwarnajayanthi Gram Swarojgar YojanaSwachh Bharat AbhiyanNational Rural Employment Guarantee SchemeRural Housing projectKutir Jyoti ProgrammeRural Health MissionNational Food Security Mission – increase production of wheat, rice and pulsesNational Agricultural Extension System – training to farmersNational horticulture Mission – increase production of fruits, vegetables and flowersDevelopment of Rural Artisans

Transition in Rural Society

Rural Consumer Behaviour

Factors influencing consumer behaviour

Environmental• Economic• Political• Technological development• Legislative measures –

moneylenders, consumerprotection, agricultural inputs,essential commodities,regulated markets and

Cultural• Culture – traditional life and

family values• Subculture – religion and castes• Social Class

Social • Reference groups• Family• Roles and Status

Personal• Age and life cycle stage• Occupation• Economic• Circumstance• Lifestyle• Personality and self - concept

Psychological

• Motivation• Perception• Learning belief and

Attitudes

Shopping Habits

• Village markets• Shandies / Haats / Weekly Markets• Mandi

Consumer buying process

1. Initiator2. Influencer3. Decider4. Buyer5. User

Purchase decision making process for newproduct1. Awareness2. Interest3. Evaluation4. Trial5. Adoption

Adopter groups

1. Innovators2. Early adopters3. The early majority4. Late majority5. LaggardsTea, shampoo, soft drinks

Opinion leaders

• Credibility• Positive and negative product information• Information and advice• Opinion leadership is category –specific

Rural marketing mix

Features of marketing mix

• Marketing variables are interdependent• Flexible and dynamic concept• Customer is the focus point• Consumer – oriented activity

4 A’s in RM

Case studies

Product and Pricing

Product Market Strategies

Product Strategies - FMCG

1. Sturdy products – bullet, ambassador2. Designing products – TV, refrigerators, cellphones3. Small unit packing – pepsodent, chik shampoo, rasna, good knight

coil4. Utility products – HMT watches, Exide, Free Power Philips Radio

Services

• Micro finance• Micro insurance

Branding

Importance of Branding

• Image• Market share• Differentiates products from rivals• New product added to line of products

Reasons for branding1. Branding helps distinguish you from your competitors.2. Branding means communication. Done right, your brand can

easily communicate your company’s values, principles,message, and even characteristics.

3. Branding helps you establish a reputation.4. Brands promote customer loyalty.5. Brands make it easier for you to introduce a new product.6. Brands insulate you in times of crisis.7. Brands help you in times of trouble.8. A strong brand can help you win in your consumers’

purchasing decisions.9. Branding helps product recall.

Types of brands

• Individual brand name – naming each product differently P&G,facilitates market segmentation and no overlap.

• Family brand name – all products are branded with the same name,or part of a name, example Nokia, promotion of one item alsopromotes other items.

• Umbrella brand – all under one.• Combination device – different types.• Private or middleman’s brands – a brand name owned by a

wholesaler or retailer.

Branding and marketing programme

1. Product differentiation2. Brand image3. Brand personality4. Creation of market5. Brand preference6. Brand patronage7. Brand loyalty8. Brand equity9. Brand associations10. Expanding the product - mix

Branding and consumers

Popular brands in Ruralmarkets

Competition in rural markets

• National brands• Local brands• Regional brands• Spurious products

PackagingPackaging maybe defined as formulating a design of the package

and producing an appropriate and attractive container or wrapperfor a product,

Attributes of a good package1. Protect the contents from breakage or spoilage.2. Be easy to open, dispense from and close.3. Be safe to use.4. Keep the product from deteriorating.5. Be of proper size and shape.6. Be resuable, able to be recycled or be biodegradable.7. Be economical.8. Be available in the sizes appropriate to the market segments served.9. Be attractive.10. Project a favourable image of the product.11. Play the role of silent salesman.12. Be identifiable in a shopping situation.13. Act as a unique selling proposition.14. Have a clearly readable description of the contents.15. Offer information on assembly, preparation and use.16. Communicate the benefits of the product to the targeted market segment.17. Not be deceptive or misleading in size, contents, etc.18. Should be distinct and stand out in the shelf against competitive products.

Innovative Packaging (value added package)

Package Design

Social view of Packaging

1. Pollution control.2. Resource scarcity is another problem.3. Energy sources

Consumer problems with packaging1. Packaging is not transparent.2. Specific quantities are not available.3. Cannot check weight and volume of the contents.4. Package sizes and designs inflate the contents.5. Deceptive packages have several room – mates in trade

practices.6. Packages are same, contents are reduced and apparently

same prices are charged.7. Packages may create health hazards for consumers.

LabellingVerbal information about the product and the seller.

PricingExchange value of a product or service always expressed in money.

Importance of pricing

1. Sales volume2. Profit margins3. Rate of return on investment4. Trade margins5. Advertising and sales promotion6. Product image7. New product development

Typical pricing objectives

1. Growth in sales2. Market share3. Predetermined profit level4. Counter competition5. Control cash flow6. To penetrate the market

Factors influencing Pricing decisions1. Objectives2. Cost of production3. Demand4. Competition5. Distribution channels6. Supply of the product7. Achieve planned ROI8. Availability of raw materials9. Profit expectations10. Trade barriers11. Popular brand12. Purchasing power13. Promotion cost14. Research and development15. Legal constraints, government interference

Kinds of pricing1. Odd pricing2. Psychological pricing3. Prestige pricing4. Consumer expectations5. Geographic pricing – FOB pricing, zone pricing and Base

point pricing6. Price lining7. Dual pricing8. Company policy9. Monopoly pricing10. Penetration pricing11. Negotiated pricing12. Mark – up pricing13. Sealed bid pricing14. Skimming pricing

Pricing strategies

1. Low price2. No frills product3. Refill package4. Credit facilities5. Discounts – trade discounts, cash discount, quantity discount, off –

season discount, promotion allowances, promotion schemes andvalue engineering.

Chap – 9 - Distribution inRural Market

Obstacles to reach the RuralConsumer

1. Large number of intermediaries2. Non – availability of dealers

3. Poor viability of retail outlets.4. Inadequate village roads get flooded during

monsoon.5. Transport and communication facilities are generally

poor.6. Credit requirement of channel members.

Channels of Distribution

Distribution Models• Star Sellers (HUL)• Project Shakti• HUB and Spoke Method• LPG Distribution (HPCL)• The bicycle distribution model• Satellite distribution• Pre – fabricated showrooms• Organised rural retailing – Choupal Sagar, Hariyali Kisan

Bazar, TATA Kisan Sansar, Aditya Birla Group, Warna Bazaar,Indian Oil and Bharati Petrol, Mahindra Shublabh ServicesLtd.

Prefabricated showrooms

Traditional Methods

• Haats• Melas• Mobile Traders

Development of Retailers in Rural Market

• Co – operative Socities• Public Distribution System• Agricultural Input Dealers• Potential Villages• Feeder markets• Post office• Small towns

Physical distribution

• Company owned delivery vans• Hired vans• Bullock carts• Syndicate Van distribution

Modern retailing of Agricultural produce

• Reliance• Pantaloons• Aditya birla group• The TATA group• Godrej• NDDB• Farmers market• The state of J & K

Use of IT and Internet

• Agricultural MIS• Price forecasting system• Creation of National market atlas• Electronic auctioning system• Electronic displayer system• E – commerce• Information Kiosks

ITC – E – ChoupalThe project E – Choupal is a unique initiative for carrying out

agricultural commodity trading in a number of locations.

ITC has set up E – Choupal which is an internet kiosk locatedin the house of an influential person in the village.

A village person is appointed by the company and is known asSanchalak.

He acts as an interface between the farmer and the computerterminal.

For Soyabean exports. Profits 20 million from 50 million ofinvestment.

Thank you