SUBMIT TOPROF. Mukesh Ranga

SUBMITTED BYSaurabh KashyapRohit YadavM.B.E 3rd SEMESTER

RURAL MARKETINGRURAL MARKETINGRural marketing is the study of all the Rural marketing is the study of all the

Activity , agency and policy involved inActivity , agency and policy involved in

The procurement of farm inputs by the The procurement of farm inputs by the Farmers and the movement of rural Farmers and the movement of rural

products from farmers to consumers.products from farmers to consumers.

_ G.N. MURTHY_ G.N. MURTHY

NATURE OF RURAL MARKETINGNATURE OF RURAL MARKETING

The rural market is quite different from The rural market is quite different from urban markets.urban markets.Agriculture is the chief economic Agriculture is the chief economic activity in rural areas, the entire village activity in rural areas, the entire village population is associated directly or population is associated directly or indirectly to agriculture.indirectly to agriculture.In the process of development of In the process of development of civilization agriculture and pastoral life civilization agriculture and pastoral life along river banks are the first of settled along river banks are the first of settled life. life.

Importance of rural marketingImportance of rural marketing Size of rural marketSize of rural marketRural target populationRural target populationEmployment Employment Better living Better living Contribution to national incomeContribution to national income Increase in farm incomeIncrease in farm income

Rural v/s UrbanRural v/s Urban

OCCUPATION:OCCUPATION:

Rural:Cultivators n few non –Rural:Cultivators n few non –agricultural pursuits.agricultural pursuits.

Urban:manufacturing,trade,comUrban:manufacturing,trade,commerce,professionsmerce,professions

Size of communitySize of community

Rural:open farms & small Rural:open farms & small community are –vly co-community are –vly co-relatedrelated

Urban:urbanity & size of Urban:urbanity & size of community are +vly co-community are +vly co-relatedrelated

Problem and difficulties faced in Problem and difficulties faced in rural marketingrural marketing

Lack of proper communicationLack of proper communication

Distribution problemDistribution problem

Seasonal demandSeasonal demand

Low literacy levelLow literacy level

Rural products Rural products

Rural products are the results of the Rural products are the results of the art of agriculture and allied activities.art of agriculture and allied activities.

In a narrow sense,rural products refer In a narrow sense,rural products refer to the products arising out of the to the products arising out of the cultivation, namely various crops, cultivation, namely various crops, vegetables and fruits etc.vegetables and fruits etc.

Types of rural goodsTypes of rural goods

Industrial goods Industrial goods

consumer goodsconsumer goods

Industrial goods:-industrial rural goods are Industrial goods:-industrial rural goods are those use for further industrial those use for further industrial processing. e.g. tabacoo, fibre crops like processing. e.g. tabacoo, fibre crops like cotton and jute.cotton and jute.

Consumer goods:-goods are mean for Consumer goods:-goods are mean for direct use like all foodgrains, dairy direct use like all foodgrains, dairy product, poultry products vegetables product, poultry products vegetables and fruits.and fruits.

Attractiveness of rural marketAttractiveness of rural market Rural markets have become the new targets to Rural markets have become the new targets to

corporate enterprises for two reasons :corporate enterprises for two reasons : 1. Urban market has become congested with 1. Urban market has become congested with

too many competitors.too many competitors. 2. The market have reached a near saturation 2. The market have reached a near saturation

point.point.

Various factors which have made rule Various factors which have made rule markets viable:-markets viable:-

1.1. Large population Large population 2. Raising prosperity2. Raising prosperity 3. Growth in consumption3. Growth in consumption4. Life-style changes4. Life-style changes5. Life-cycle advantages5. Life-cycle advantages6. Market growth rates higher than 6. Market growth rates higher than urbanurban7. Rural marketing is not expensive7. Rural marketing is not expensive8. Remoteness is no longer a problem8. Remoteness is no longer a problem

Now for some facts and figures. The Indian Now for some facts and figures. The Indian rural market today accounts for only about Rs rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead.clearly there seems to be a long way ahead.Time and again marketing practitioners have Time and again marketing practitioners have waxed eloquent about the potential of the rural waxed eloquent about the potential of the rural market. But when one zeroes in on the market. But when one zeroes in on the companies that focus on the rural market, a companies that focus on the rural market, a mere handful names come to mind. Hindustan mere handful names come to mind. Hindustan Lever Limited (HuL) is top of the mind with Lever Limited (HuL) is top of the mind with their successful rural marketing projects like their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. 'Project Shakti' and 'Operation Bharat'.

RURAL MARKETING CHANNELSRURAL MARKETING CHANNELS Marketing channels are routes through which Marketing channels are routes through which

rural products move from producers to rural products move from producers to consumersconsumersCleary the main challenge that one faces while Cleary the main challenge that one faces while dealing with rural marketing is the basic dealing with rural marketing is the basic understanding of the rural consumer who is understanding of the rural consumer who is very different from his urban counterpart. very different from his urban counterpart. Also distribution remains to be the single Also distribution remains to be the single largest problem marketers face today when it largest problem marketers face today when it comes to going rural. "Reaching your product comes to going rural. "Reaching your product to remote locations spread over 600,000 to remote locations spread over 600,000 villages and poor infrastructure - roads, villages and poor infrastructure - roads, telecommunication etc and lower levels of telecommunication etc and lower levels of literacy are a few hinges that come in the way literacy are a few hinges that come in the way of marketers to reach the rural market of marketers to reach the rural market

In 1998 HuL’s personal products unit initiated In 1998 HuL’s personal products unit initiated Project Bharat, the first and largest rural home-Project Bharat, the first and largest rural home-to-home operation to have ever been prepared to-home operation to have ever been prepared by any company. The project covered 13 by any company. The project covered 13 million rural households by the end of 1999.million rural households by the end of 1999.During the course of operation, HuL had vans During the course of operation, HuL had vans visiting villages across the country distributing visiting villages across the country distributing sample packs comprising a low-unit-price pack sample packs comprising a low-unit-price pack each of shampoo, talcum powder, toothpaste each of shampoo, talcum powder, toothpaste and skin cream priced at Rs. 15. This was to and skin cream priced at Rs. 15. This was to create awareness of the company’s product create awareness of the company’s product categories and of the affordability of the categories and of the affordability of the products.products.

Khaitan fans' ad on a horse cartKhaitan fans' ad on a horse cart

The greatest challenge for advertisers and The greatest challenge for advertisers and marketers continues to be in finding the right marketers continues to be in finding the right mix that will have a pan-Indian rural appeal. mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad Coca Cola, with their Aamir Khan ad campaign succeeded in providing just that. campaign succeeded in providing just that.

"Yaara da Tashan...” ads with "Yaara da Tashan...” ads with Aamir Khan created universal Aamir Khan created universal

appeal for Coca Colaappeal for Coca Cola

"Yaara da Tashan..." ads with Aamir Khan "Yaara da Tashan..." ads with Aamir Khan created universal appeal for Coca Colacreated universal appeal for Coca ColaCoca-Cola India tapped the rural market in a Coca-Cola India tapped the rural market in a big way when it introduced bottles priced at Rs big way when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The 5 and backed it with the Aamir Khan ads. The company, on its behalf, has also been investing company, on its behalf, has also been investing steadily to build their infrastructure to meet the steadily to build their infrastructure to meet the growing needs of the rural market, which growing needs of the rural market, which reiterates the fact that this multinational has reiterates the fact that this multinational has realised the potential of the rural market is realised the potential of the rural market is going strength to strength to tap the same.going strength to strength to tap the same.

For HLL, a one rupee or a five rupee sachet or For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in the Kutti Hamam (the small Hamam) helps in giving the consumers a trial opportunity. giving the consumers a trial opportunity. While it does help in generate volume but not While it does help in generate volume but not in terms of values. "Till the time that volume - in terms of values. "Till the time that volume - value equation is managed better. value equation is managed better. Ultimately, the ball lies in the court of rural Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches marketers. It's all about how one approaches the market, takes up the challenge of selling the market, takes up the challenge of selling products and concepts through innovative products and concepts through innovative media design and more importantly media design and more importantly interactivity.interactivity.

Amul is another case in point of aggressive Amul is another case in point of aggressive rural marketing. Some of the other corporates rural marketing. Some of the other corporates that are slowly making headway in this area that are slowly making headway in this area are Coca Cola India, Colgate, Eveready are Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.and Hero Honda to name a few.

Interestingly, the rural market is growing at a Interestingly, the rural market is growing at a far greater speed than its urban counterpart. far greater speed than its urban counterpart. "All the data provided by various agencies like "All the data provided by various agencies like NCAER, Francis Kanoi etc shows that rural NCAER, Francis Kanoi etc shows that rural markets are growing faster than urban markets markets are growing faster than urban markets in certain product categories at least. The share in certain product categories at least. The share of FMCG products in rural markets is 53 per of FMCG products in rural markets is 53 per cent, durables boasts of 59 per cent market cent, durables boasts of 59 per cent market share. Therefore one can claim that rural share. Therefore one can claim that rural markets are growing faster than urban marketsmarkets are growing faster than urban markets

Satellite dish antennas reach rural Satellite dish antennas reach rural IndiaIndia

In 2000, ITC took an initiative to develop In 2000, ITC took an initiative to develop direct contact with farmers who lived in far-direct contact with farmers who lived in far-flung villages in Madhya Pradesh. ITC's E-flung villages in Madhya Pradesh. ITC's E-choupal was the result of this initiative.choupal was the result of this initiative.

So the fact remains that the rural market in So the fact remains that the rural market in India has great potential, which is just waiting India has great potential, which is just waiting to be tapped. Progress has been made in this to be tapped. Progress has been made in this area by some, but there seems to be a long way area by some, but there seems to be a long way for marketers to go in order to derive and reap for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so not so poor as it used to be a decade or so back. Things are sure a changing back. Things are sure a changing

Typical shop in rural India stocked Typical shop in rural India stocked with sachets, etcwith sachets, etc