Presented by:Presented by:

Neelam SinghNeelam Singh

Introduction to Introduction to Rural Marketing Rural Marketing

““The first five years of the new millennium will The first five years of the new millennium will belong neither to the urban markets which have belong neither to the urban markets which have reached saturation and where margins are under reached saturation and where margins are under pressure not to the export markets, which suffer from pressure not to the export markets, which suffer from inadequate infrastructure back home, and inadequate infrastructure back home, and uncompetitive prices overseas. It will belong to rural uncompetitive prices overseas. It will belong to rural marketing.”marketing.”

RURAL MARKETINGRURAL MARKETING

In the India context, the word ‘RURAL’ is so much In the India context, the word ‘RURAL’ is so much associated with agriculture and farmers that rural associated with agriculture and farmers that rural marketing tends to be seen as a marketing of inputs or marketing tends to be seen as a marketing of inputs or

outputs related to agricultureoutputs related to agriculture..

What is Rural What is Rural Marketing?Marketing?

Rural marketing is a function which manages all those Rural marketing is a function which manages all those activates involved in assessing, stimulating and activates involved in assessing, stimulating and converting the purchasing power into an effective converting the purchasing power into an effective demand for specific products and services, and demand for specific products and services, and moving them to the people in rural area to create moving them to the people in rural area to create satisfaction and a standard of living to them and satisfaction and a standard of living to them and

thereby achieves the goals of the organizationthereby achieves the goals of the organization..

Rural v\s UrbanRural v\s Urban

OCCUPATION:OCCUPATION:RuralRural: Cultivators n few non –agricultural : Cultivators n few non –agricultural pursuits.pursuits.

Urban: Urban: manufacturing, trade, commerce, manufacturing, trade, commerce, professionsprofessions

Size of communitySize of community

RuralRural: : open farms & small community are open farms & small community are –vly co-related–vly co-related

UrbanUrban: urbanity & size of community are : urbanity & size of community are +vly co-related+vly co-related

Density of populationDensity of populationRural:density of population is lower Rural:density of population is lower than urbanthan urban

MobilityMobility

Rural:Rural: social mobility less. More social mobility less. More migration from villages to town.migration from villages to town.

Urban:Urban:social mobility inreases with social mobility inreases with urbanityurbanity..

System of interactionSystem of interactionRural: Rural: less numerous contacts per less numerous contacts per man. Predominance of personal & man. Predominance of personal & relatively durable relations.relatively durable relations.

Urban: Urban: Greater complexity, superficiality Greater complexity, superficiality & standardized formality in relations.& standardized formality in relations.

Attractiveness of rural Attractiveness of rural marketmarket

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 viablemarkets 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 - 8 billion (53 per cent - FMCG sectorFMCG sector, 59 per , 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. mere handful names come to mind. Hindustan Hindustan Lever Limited (HuL) Lever Limited (HuL) is top of the mind with 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'.

In 1998 In 1998 HuL’sHuL’s personal products unit initiated 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.

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

"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

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.

Amul is another case in point of Amul is another case in point of aggressive rural marketingaggressive rural marketing

Coca Cola India, Coca Cola India,

Colgate,Colgate,

Eveready Batteries,Eveready Batteries,

LG Electronics, LG Electronics,

Philips, BSNL,Philips, BSNL,

Life Insurance Corporation,Life Insurance Corporation,

Cavin Kare, Cavin Kare,

Britannia and Hero Honda to name a few.Britannia and Hero Honda to name a few.

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.

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