MARKETING TO RURAL INDIA

FLOW OF PRESENTATION

• SWOT Analysis of Rural India with Corporate perspective.• Making a dent in Rural India.

SWOT ANALYSIS OF RURAL INDIA corporate perspective

Marketing to Rural India :

IS IT A CRAZY CONCEPT?•70% of Indian Population lives in Rural India.•Mostly depend on Agriculture.•Largely Illiterate.•Earn as low as $2 Per day.• Live with minimum infrastructures.• Language changes per few kms.•Villages are sparsely populated and sparsely located.

STRENGTH

647 Million population largely uncovered.72% population contributes to half of India’s GDP’s. Approximate size of Rural Market 123000 Crores.Rural India has seen growth in income due to rice in agriculture prices.Less exposure to various brands so less competition.Rise in Expenditure is 9% since 2002.Government Initiatives like Bharat nirman, NAREGA and Loan waivers have made Rural Indian approachable and very marketable.

WEAKNESS

Low literacy rate. Lack of Infrastructure facilities like power, Roads etc. Fake products in the market. No common language across area.Sparsely located population.Low Earning per household.Low penetration of traditional media.Traditional outlook of Rural consumers which makes them resist change.

OPPORTUNITIES

Government spending in Rural India is on increase• 41 Million Kisan credit cards issued providing a cumulative credit of 977

Billion to Rural India.• Bharat Nirman and Pradhanmantri Grameen Sadak Yojna has resulted in

Increased Rural Connectivity.• 90% Villages are electrified.• Schemes like Rural Employment Gurantee act (NREGA) & loan waiver

have pumped Liquidity.Rural Markets are ripe and fresh. A new brand can enter easily as competition is low.Rural India’s resistance to change gives established brand a leverage.

THREATS

Creating products for Rural India is tricky. Only corporate with deep pockets can enter as huge infrastructure is required.Tough rural terrain requires extra handling. To reach sparsely located population a very scattered distribution network is required. Low availability of infrastructure facilities can cause loss of investment. Initial entrants in Rural India are exposed to more risks. Rural population is mostly illiterate, Communicating message to them is a real challenge.

MAKING A DENT

IN RURAL BAZAAR

PRODUCT DIFFRENTIATIONIntroducing variations in products or all together new products for Rural needs based on price sensitivity, requirements and tough rural terrain

USE OF TECHNOLOGY

Use of technology for reaching far reached rural customers. Smart cards for villagers for accessing bank accounts. ITC E- Chaupal where farmers keep in touch with latest prices. Amul using refrigeration units at collection points.

COMMUNICATE IN THEIR LANGUAGEMessage to Rural consumers should be in their language and comprehensible to them. Lifebuoy swasthya chetna campaign Vodafone Wall paints

THINKING DIFFERENTLYNew concepts to reach and serve rural consumers have to be thought for making rural consumers buy your products. Grameen Bank introduced Microfinance and Micro Credit for poor. Bajaj Allianz’s Micro Insurance.

GRAMEEN BANK

SUPPLY CHAIN MANAGEMENTRural Markets are sparsely located and are not connected with good roads. Supply chain management needs to be effective and efficient. HUL Shakti--- Using Rural woman as distributor of HUL Products. Tata using NGO network in UP to supply its product in Villages. Reliance retail procuring from local villages to supply in neighboring cities.

REAPING BENEFITS

In 2001-02, LIC sold 55 % of its policies in rural India.Of two million BSNL mobile connections, 50% in small towns/villages .Herohonda’s 43% sales comes from Rural India.Maruti Suzukis Rural sale increased from 3.5 to 10% in one year.HUL’s one of the initiators in rural India has more than 45% sale coming from Rural India.Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions from these towns on Rediff online shopping site. 42 million rural HHs availing banking services in comparison to 27 million urban HHs. LG sold 55% of its color television in Rural India.

RURAL INDIAIts waiting to be explored

Are you

READY?