Rural marketing is necessary for developing India

Defining Rural Marketing:-

Corporate Rural Marketing “Function that manages all activities
involved in assessing, stimulating and converting the purchasing
power of rural consumers into effective demand for specific
products and services to create satisfaction & a better standard of
living for achieving organizational goals”

National Commission on Agriculture “Decisions to produce

saleable farm commodities involving all the aspects of the market
system or structure, both functional and institutional, based on
technical & economic considerations and includes the pre & post
harvest operations

• Organizat • Definition • Limitations

ion
• GOVT • • Rural not defined
(agencies) like Population of less
IRDA, NCAER than 5000 with 75
(NATIONAL percent of the male
COUNCIL FOR working population
APPLIED is engaged in
ECONOMIC agriculture
RESERCH) Two third of the
country consumers
(more than 700
million) live in rural
areas and almost
26% percent of the
national income is
generated
• Planning • Towns up to • Town characteristics not
Commission 15,000 population defined
are considered rural
Phases in Rural Marketing

Sr. No Time Frame Key Events & Trends

1 Phase One( Pre 1960’s) • Marketing rural products in

rural and urban areas
• Agricultural inputs in rural
areas
• “Agricultural marketing”
• Farming methods were
primitive and
mechanization was low
• Markets unorganized

2 Phase Two (1960s to • Green Revolution

1990s) Companies like Mahindra and Mahindra,
Sri Ram Fertilizers

3 Phase Three (1990s to • Demand for consumables and

Present) durables rise
Companies find growth in urban markets
stagnating or falling
RURAL BUSINESS MODEL
Rural

R:Retail Business for Rural Community As

(Consumer & Producer)
U: Urban Facilities(PURA), Investment,
Infrastucture
R: Animal Hubandry & Allied Activities
A: Agri-Production(Field Crops, Plantation )
L: Linkages & Synergy

Domain of Rural Marketing

Urban to Rural Rural from Urban

example Transactions in this category basically depend middle

pesticides, fertilizers, man plays a crucial role in marketing process such as
seed ,product factors milk (Saras, Amul)
bicycles

Rural to Rural
Example handicraft, Rural management
bullock, carts dress
material etc
Rural Market Potential
India is an agro-based economy and the growth of most of the other sectors
of economy is driven by rural demand. Urban market is reaching towards the
saturation point, thus bringing in and urgent need to focus on rural
development. Moreover, more than 70% of India's population lives in
villages and constitutions a big market for industry because of increasing
disposal incomes and awareness level.

In comparison to just 5,161 towns in India there are 6,38,365 villages in

India. This in itself is an indicator where the real India resides. Companies
are realizing slowly but surely that the key to gain true market leadership lies
in tapping the rural potential. However, the rural sector in India suffers from
different kinds of problems. Some areas are having enough money but their
level of awareness and hence consumerism is very low. But there are many
areas where economic empowerment, education, health etc., are major
problems

Challenges in rural marketing

Low Literacy

There are not enough opportunities for education in rural areas. The literacy
level is as low (36%) when compared to all- India average of 52%.

Seasonal Demand

Demand for goods in rural markets depends upon agricultural situation, as

agriculture is the main source of income. Agriculture to a large extent
depends upon monsoon and, therefore, the demand or buying capacity is not
stable or regular.

Transportation

Many rural areas are not connected by rail transport. Kacha roads become
unserviceable during the monsoon and interior villages get isolated.
Distribution

An effective distribution system requires village-level shopkeeper, Mandal/

Taluka- level wholesaler or preferred dealer, distributor or stockiest at
district level and company-owned depot or consignment distribution at state
level. The presence of too many tiers in the distribution system increases the
cost of distribution.

Communication Problems

Facilities such as telephone, fax and telegram are rather poor in rural areas.

Traditional Life

Life in rural areas is still governed by customs and traditions and people do
not easily adapt new practices. For example, even rich and educated class of
farmers does not wear jeans or branded shoes.

Buying Decisions

Rural consumers are cautious in buying and decisions are slow and delayed.
They like to give a trial and only after being personally satisfied, do they buy
the product.

Life style

The rural customer lives fairly simply compared to his urban counterpart.
They don’t have any type of comparison with another person.

Media for Promotions

Television has made a great impact and large audience has been exposed to
this medium. Radio reaches large population in rural areas at a relatively low
cost. However, reach of formal media is low in rural households; therefore,
the market has to undertake specific sales promotion activities in rural areas
like participating in meals or fairs
Cultural Factors

Culture is a system of shared values, beliefs and perceptions that influence

the behavior of consumers. There are different groups based on religion,
caste, occupation, income, age, education and politics and each group exerts
influence on the behavior of people in villages

Deprived people and markets

The number of people below in poverty line. A vast majority of people is

tradition-bound and fatalististic.They believe in old customs,tradition,habits
and practices

Low per Capita Income

Even though about 26 percent of GDP (gross domestic product) is generated

in rural areas, it is shared by 74 percent of the population. So per capita
income are low compared to the urban areas.

Future Trends

Markets which are not able to face the stiff competition posed by MNCs, can
restore their profits in the rural sector. The market share of urban market
when compared to the rural market is low, hence if Indian industries
concentrate on rural markets their sales will increase. If rural markets are
brought into the limelight of development, they pave way to prosperity.
Prosperity of India lies in the prosperity of every Indian, hence no rural
segment should be left untapped.

Availability of choices

In the Rural area only on two and three types choices is available but in the
Urban area many choices available so in the rural area people choice the
product in limited availability.
Significance
In recent years, rural markets have acquired significance in countries like
China and India, as the overall growth of the economy has resulted into
substantial increase in the purchasing power of the rural communities. On
account of the green revolution in India, the rural areas are consuming a
large quantity of industrial and urban manufactured products.

Rural market is getting an importance because of the saturation of the urban

market. As due to the competition in the urban market, the market is more or
so saturated as most of the capacities of the purchasers have been targeted by
the marketers. So the marketers are looking for extending their product
categories to an unexplored market i.e. the rural market. This has also led to
the CSR activities being done by the corporate to help the poor people attain
some wealth to spend on their product categories. Here we can think of HLL
(now, HUL) initiatives in the rural India. One of such project is the Project
Shakti, which is not only helping their company attain some revenue but
also helping the poor women of the village to attain some money which is
surely going to increase their purchasing power. Also this will increase their
brand loyalty as well as recognition in that area. Similarly we can think of
the ITC E-Chaupal, which is helping the poor farmers get all the information
about the weather as well as the market price of the food grains they are
producing.In other view these activities are also helping the companies
increase their brand value. So as it is given above the significance of the
rural market has increased due to the saturation of the urban market as well
as in such conditions the company which will lead the way will be benefited
as shown by the success of HUL and ITC initiatives.

Strategies
Rural markets and rural marketing involve a number of strategies,
which include:

Client and Location specific promotion involves a strategy designed to be

suitable to the location and the client.

Joint or co-operative promotion strategy involves participation between

the marketing agencies and the client.
Bundling of inputs' denote a marketing strategy, in which several related
items are sold to the target client, including arrangements of credit, after-sale
service, and so on.

Management of demand involve continuous market research of buyer’s

needs and problems at various levels so that continuous improvements and
innovations can be undertaken for a sustainable market performance.

Developmental marketing refer to taking up marketing programs keeping

the development objective in mind and using various managerial and other
inputs of marketing to achieve these objectives.

Media, both traditional as well as the modern media, is used as a marketing

strategy.

Unique Selling Propositions (USP) involves presenting a theme with the

product to attract the client to buy that particular product. For examples,
some of famous Indian Farm equipment manufactures have coined catchy
themes, which they display along with the products, to attract the target
client that is the farmers. English version of some of such themes would read
like:

• The heartbeats of rural India

• With new technique for a life time of company
• For the sake of progress and prosperity

Extension Services denote, in short, a system of attending to the missing

links and providing the required know-how.

Ethics in Business. form, as usual, an important plank for rural markets and
rural marketing.

Partnership for sustainability involve laying and building a foundation for

continuous and long lasting relationship