rural marketing in india.ppt

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What is Rural? Any habitation with a population density of less than 400

sq. km., where at least 75% of the male population isengaged in agriculture and where there exists nomunicipality or board (Census 2001).

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

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



What is Marketing?

The Chartered Institute of Marketing definemarketing as 'The management process

responsible for identifying , anticipating andsatisfying customer requirements profitably.’

Marketing is not about providing products or

services it is essentially about providingchanging benefits to the changing needs anddemands of the customer



Introduction to Rural Marketing

Developing of the market in the area as defined asRural. Hence it could be aptly said that itencompasses the activities such as developing the

process. To meet this Objective –

1. Right product at the right price to the right

people at the right time.2. Exchange between Rural and Urban is a factorcould be Urban to Rural, Rural to Urban, Ruralto rural.



Evolution Of Rural Marketing Phase 1 (Before 1960s) Before the advent of the Green

revolution, the nature of rural market was altogetherdifferent. Rural marketing then referred to the marketingof rural products in rural & urban products.

Phase 2 (1960s-1990s)During these times, due to theadvent & spread of the Green Revolution, rural marketingrepresented marketing of agriculture inputs in ruralmarkets & marketing of rural produce in urban areas.

Phase 3 (1990s to present)The third phase of ruralmarketing started after the liberalization of the Indianeconomy. In this period, rural marketing represented theemerging, distinct activity of attracting & serving ruralmarkets to fulfill the need & wants of rural households,peoples & their occupations.



47% of the total population.(Urban- 28%, Semiurban- 25%).

More than 570 Million people.

The annual rural household income of Rs 56,630(as per NCAER, IMDR 2009)

Changing consumption patterns and lifestyles

Unfold tremendous opportunities for ruralmarketing.

Indian Rural Market



RURAL & URBAN

DISTRIBUTION POPULATION

0

20

40

60

80

100

RURAL URBAN TOTAL

POPULATION %

TRU RURAL URBAN TOTAL

MALE 381,602,674 150,554,098 532,156,772

FEMALES 360,887,965 135,565,591 496453556

BOTH 742,490,639(72%)

286,119,689(28%)

1,028,610,328(100%)

ACCORDING

TO CENSUS

2001



first challenge is to ensure availability of the product or

service.

Around 700 million indians live in 627,000 villages & are

spread over 3.2 million sq km

Poor state of roads,

Greater challenge is to regularly reach products to the far-flung

villages.

Marketers must trade off the distribution cost with incremental

market saturation. India's largest MNC, Hindustan Lever, a subsidiary of

Unilever, has built a strong distribution system which helps its

brands reach the interiors of the rural market.

Availability



Stockiest use autorickshaws, bullock-carts and even boats in

the backwaters of Kerala to serve remote villages.

Coca-Cola considers rural India a future growth driver, has

evolved a hub and spoke distribution model to reach thevillages.

To ensure full loads, the company depot supplies, twice a week,

large distributors which who act as hubs. These distributors

appoint and supply, once a week,

LG Electronics has set up 45 offices in urban and semi-rural

areas and 59 rural/remote area offices.

Contd......



The second challenge is to ensure affordability of the

product or service.

Most of rural people earn daily wages

With low disposable incomes, products need to be

affordable to the rural consumer, Some companies have addressed the affordability problem

by introducing small unit packs.

Shampoos, Fair and lovely, Colgate toothpaste and many

others launched its smaller packs to cater most of the ruralconsumers.

Godrej recently introduced three brands of Cinthol, Fair

Glow and Godrej in 50-gm packs, priced at Rs 4-5.

Affordability



Hindustan Lever, among the first MNC’s targeted the rural

market has launched a variant of its largest selling soap brand,

Lifebuoy at Rs 2 for 50 gm.

Coca-Cola has addressed the affordability issue by introducing

the returnable 200-ml glass bottle priced at Rs 5.

Eighty per cent of new drinkers come from the rural

markets.

Coca-Cola has also introduced Sunfill, a powdered soft-drinkconcentrate. The instant and ready-to-mix Sunfill is available in

a single-serve sachet of 25 gm priced at Rs 2 and multi serve

sachet of 200 gm priced at Rs 15.

contd....



Acceptability The third challenge is to gain acceptability for the product or

service.

Need to offer products that suit the rural market.

In 1998 LG Electronics, developed a customized TV for the

rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year.

lack of electricity and refrigerators in the rural areas

Coca-Cola provides low-cost ice boxes-a tin box for new outlets

and thermocol box for seasonal outlets.



contd....

The insurance companies that have tailor-made products for the

rural market have performed well.

HDFC Standard LIFE topped private insurers by selling policies

worth Rs 3.5 crores in total premium. large parts of rural India inaccessible to conventional advertising

media — only 41 per cent rural households have access to TV —

building awareness is another challenge. Fortunately, however, the

rural consumer has the same likes as the urban consumer — movies

and music — and for both the urban and rural consumer, the familyis the key unit of identity. However, the rural consumer expressions

differ from his urban counterpart.



continued...... Coca-Cola uses a combination of TV, cinema and radio to reach

53.6 per cent of rural households.

Coca-Cola doubled it’s spend on advertising on Doordarshan,

which alone reached 41 per cent of rural households.

Use of banners, posters and all the local forms of entertainment.

Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.

LG Electronics uses vans and road shows to reach rural

customers.

The company uses local language advertising.

Philips India uses wall writing and radio advertising to drive its

growth in rural areas.

The key dilemma for MNC’s ready to tap the large and fast-

growing rural market is whether they can do so without hurting

the company's profit margins.



Rural facts The average Monthly per capita Consumer

Expenditure (MPCE) for rural areas is Rs 495 and thatfor urban areas is Rs 914.

93% people in Rural Area live in their own houses ascomparative to 61% of Urban.

Food Expenditure in Rural Area is 56% as in Urban it is

44%.



Contd……… 9 in 10 Rural households use branded washing powder

or cakes

2 in 5 uses more than 1 brand of soap

More than 1/2 of households use branded skin creams.

Rural contribution is 40% in sales to top 7 cities ofFrost Free refrigerator

More than 70 Million Kisan Credit Cards are alreadyissued by Banks to rural households.

(Source: ORG- MARG Survey / NSSO Survey).



Size of the Rural Market

The total size of the rural market is estimated at Rs.1,23,000 crore, which includes FMCGs, Durables, Agriproducts 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 2009



Rural customer…. Understand

them

Illiterate but not fools



Agro Advertising

No brands, no advertising

Posters

Farmer meets

Leaflets

R l M k ti C



Rural Marketing Common..

One follows other…



CASE STUDIES



LG’s advertising strategies for rural

Market…

LG launched its first low pricedTV for rural consumers..

-Sampoorna- Rs.3000-Cineplus- RS 4900

Promotion

Mobile Vans

Exhibition Road Shows



Coca cola

“THANDA MATLABH COCA COLA” COCA COLA CAPTURE 17.34% RURAL MARKET TILL

2009.



Lux at Rs.5,

Lifebuoy at Rs.2,

Surf Excel sachet at Rs.1.50,

Pond's Talc at Rs.5,

Pepsodent toothpaste at Rs. 5,

Fair & Lovely Skin Cream at Rs.5,



ITC - eCHOUPALITC-eChoupal Sagar records an average footfalls of 1,200 a day and

nets Rs 2 lakh; the company will be launching 50 such rural mallsby the end of the next fiscal; it stacks almost all the leadingdurables and non-durables brands.



Key Success Factor

Self Sufficient Infrastructure

Power Connectivity

Training



IDEA

Has a customer base of over 17 million.

Promotional Strategy (An Idea can change your life!)

‘Idea’ as an instrument of democracy, bringing power to thepeople.

Social messaging to reach the hearts and minds of ruralIndia.

Abhishek Bachchan- presented as a humble public servant,an agent of change.



W d ’t



We don’t

consider

other service

providers,

only IDEAworks here..”

IDEA What an idea sir ji?



IDEA- What an idea sir ji?

Combi pack- sim + mobile

At only Rs. 1199.00



Nokia Variety of product

Number of low Priced phones

Airtel sim free with nokia cell Teaching them how to use

Low priced phones, easy to use



NOKIA RURAL MARKET



Hero Honda Free trials

On the spot finance

Broad servicing range



In 2001-02, LIC sold 55% of its policies in rural India.

Of two million BSNL mobile connections, 50% are in smalltowns / villages.

Of the 20 million Rediffmail sign-ups, 60% are from small

towns. 50% of transactions from these towns are on

Rediff online shopping site. 42 million rural households are availing banking

services in comparison to 27 million urban HouseHolds.

Investment in formal savings instruments is 6.6million HouseHolds in rural and 6.7 million HHs inurban.



Current Scenario

Rural India, which accounts for more than 70 per cent of thecountry’s one billion population is not just witnessing an increasein its income but also in consumption and production.

The Union Budget for 2009-10 hiked the allocation for the

National Rural Employment Guarantee Act (NREGA) to US$ 8.03billion, giving a boost to the rural economy. This is in addition tothe ambitious Bharat Nirman Programme with an outlay of US$34.84 billion for improving rural infrastructure.

According to a study on the impact of the slowdown on ruralmarkets commissioned by RMAI and conducted by MART, therural and small town economy which accounts for 60 per cent ofIndia’s income has not been impacted by the global economicslowdown,



The rural consumer market, which grew 25 per cent in 2008 when

demand in urban areas slowed due to the global recession, isexpected to reach US$ 425 billion in 2010-11 with 720-790 millioncustomers

Several FMCG companies such as Godrej Consumer Products,

Dabur, Marico and Hindustan Unilever (HUL) have increasedtheir hiring in rural India and small towns in order to establish alocal connect and increase visibility.

GlaxoSmithkline Consumer Healthcare (GSK) and Nestle and are

now launching products specifically for rural markets

At present 53 per cent of all FMCGs and 59 per cent of allconsumer durables are being sold in rural India. The biggestFMCG Company in India HLL derives more than half of its Rs.

12,000 crore revenues from the rural markets

Contd....



RuralMarketing In INDIA- A Strategy

To Fight global RECESSION” Rural India accounts for more than 70 per cent of the

country's one billion population (according to the

Census of India 2001). Witnessing an increase in its income but also in

consumption and production.

The rural consumer market, grew 25 per cent in 2008

Demand in urban areas slowed due to the globalrecession.

The rural economy had not been impacted by the

global economic slowdown.



Maruti Suzuki

The industry posted a growth rate of 11% from April toOctober 2007 which fell to just 3% in 2008.

The sale of small cars (the entry-level segment) alsodecreased in the face of the credit squeeze.

Maruti planned to tap the rural market. Maruti appointed 2,000 sales executives

Target rural areas and started special schemes for villagepanchayats, rural teachers and rural officers.

A mobile van was put on standby to provide car servicing atthe villagers doorstep.

Discounts from Rs 3,000 to 8,000 on various models in ruralmarkets.Rural areas and middle class cities pushed the

company’s sales during the period of recession thereafter.



Mobile Industry Stock markets crashed Nasscom lowered its expectations for IT-BPO to 16-17%, The mobile markets didn’t got affected but on the other hand

reported a record growth, especially the rural mobile market inIndia.

The industry ‟s overall subscriber base grew 48 per cent in2008 to 347 million customers.

25 million new mobile subscribers added during April 2008 to June 2008.

8 million were from the villages, that is more than 30%. The mobile subscriber base is growing in leaps and bounds.

Bharti Airtel saw its profit in the three months to December 31climb to 22 billion rupees , up 25 per cent from a year earlier, asit drew in a record number of new subscribers.



Tata tea During the time of recession, Tata Tea also invested in rural India.

Tata Tea‟s shares incresed from 18 percent in January-March 2006to 21.4 percent in January-March 2008.

Tata Tea realized that it was not selling in more than 1,00,000

villages in UP. Tata Tea decided to tie up with NGOs.

Tata Tea created a unique channel of distribution with NGOsacting as the first tier and followed by 2 tiers from villages thusproviding a means for funding to NGOs and as a source of steady

income to youths who became distributors at level 2 and 3. In the same period of time.HUL lost its market share from 21.2

percent to 18.9 percent and Tata Tea consolidated its market sharefrom 18.1 percent to 26.6 percent.



Conclusion“Rural market has an untapped potential like rainbut it is Different from the urban market so itrequires the defferent marketing strategies andmarketer has to meet the challenges to besuccessful in rural market.”



Sat Shiri Akal

Thank You!

rural marketing in india.ppt

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