INTRODUCTION

India lives in her villages. As described by Adi Godrej, Chairman, Godrej Group The rural consumer is discerning and the rural market is vibrant. At the current of growth, it will soon outstrip the urban market. The rural market is no longer sleeping but we are.Before gamboling into issues like where the Indian rural market stands and the opportunities for corporates to explore there... let's look at the definition of urban and rural India. The Census defined urban India as - "All the places that fall within the administrative limits of a municipal corporation, municipality, cantonment board etc or have a population of at least 5,000 and have at least 75 per cent male working population in outside the primary sector and have a population density of at least 400 per square kilometer. Rural India, on the other hand, comprises all places that are not urban!" In our country over 70%of the total population live in villages. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies from 8 to 9percent. Agriculture and agriculture related activities contribute to about 75%of the income in rural areas. The general impression is that the rural markets have potential only for agricultural inputs like seeds, fertilizers and pesticides, cattle feed and agricultural machinery. More than 50%of the national income is generated in rural India and there are opportunities to market modern goods and services in rural areas and also market agricultural products in urban areas. Infect it has been estimated that the rural markets are growing at five times the rate of urban markets. About 70% of bicycles, mechanical watches and radios and about 60%of batteries, sewing machine and table fans are sold in rural India. At the same time the sales of color television, washing machines, refrigerators, shampoos, face cream, mosquito repellent and tooth paste are very low and there is tremendous potential for such products in rural markets. Now for some facts and figures The Indian rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead.Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. Hindustan Lever Limited (HLL) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin of HLL's strategy has been to focus on penetrating the market down the line and focusing on price point. Furthermore, activating the brand in the rural market through activities, which are in line with the brand itself, is what sums up HLL's agenda as far as the rural market is concerned informs MindShare Fulcrum general manager R Gowthaman. Amul is another case in point of aggressive rural marketing. Some of the other corporates that are slowly making headway in this area are Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.

We can safely say that until some years ago, the rural market was being given a step-motherly treatment by many companies and advertising to rural consumers was usually a hit and miss affair. More often than not, the agenda being to take a short-cut route by pushing urban communication to the rural market by merely transliterating the ad copy. Hence advertising that is rooted in urban sensitivities didn't touch the hearts and minds of the rural consumer. While, this is definitely changing, the process is slow. The greatest challenge for advertisers and marketers continues to be in finding the right mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad campaign succeeded in providing just that.Lifebuoy's wall painting in rural India

orporates are still apprehensive to "Go Rural." A few agencies that are trying to create awareness about the rural market and its importance are Anugrah Madison, Sampark Marketing and Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M Outreach, Linterland and RC&M, to name a few. Also, the first four agencies mentioned above have come together to form The Rural Network. The paramount objective of the Network is to get clients who are looking for a national strategy in rural marketing and help them in executing it across different regions.Interestingly, the rural market is growing at a far greater speed than its urban counterpart. "All the data provided by various agencies like NCAER, Francis Kanoi etc shows that rural markets are growing faster than urban markets in certain product categories at least. The share of FMCG products in rural markets is 53 per cent, durables boasts of 59 per cent market share. Therefore one can claim that rural markets are growing faster than urban markets," says Sampark Marketing and Advertising Solutions Pvt Ltd managing director R A Patankar.

"Yaara da Tashan..." McCann Erickson's ads with Aamir Khan created universal appeal for Coca Cola

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

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

Clearly the main challenge that one faces while dealing with rural marketing is the basic understanding of the rural consumer who is very different from his urban counterpart. Also distribution remains to be the single largest problem marketers face today when it comes to going rural. "Reaching your product to remote locations spread over 600,000 villages and poor infrastructure - roads, telecommunication etc. and lower levels of literacy are a few hinges that come in the way of marketers to reach the rural market," says MART managing director Pradeep Kashyap.Citing other challenges in rural marketing, Patankar says, "Campaigns have to be tailor made for each product category and each of the regions where the campaign is to be executed. Therefore a thorough knowledge of the nuances of language, dialects and familiarity with prevailing customs in the regions that you want to work for is essential. The other challenge is the reach and the available means of reaching out to these markets, hence the video van is one of the very effective means of reaching out physically to the rural consumers."The fact of the matter remains that when compared to the Indian urban society, which is turning into a consumerism society; the rural consumer will always remain driven by his needs first and will therefore be cost conscious and thrifty in his spending habits. "Decision-making is still conscious and deliberated among the rural community. But nevertheless, the future no doubt lies in the rural markets, since the size of the rural market is growing at a good pace. There was a time when market predictions were made on the basis of the state of the monsoon but this trend has changed over the years; there is a large non farming sector, which generates almost 40 per cent of the rural wealth. Hence the growth in the rural markets will be sustained to a large extent by this class in addition to the farmer who will always be the mainstay of the rural economy," affirms Patankar.

"Although the melting of the urban - rural divide will take a while, this is not for want of the availability of the means but for want of the rural consumer's mindset to change; which has its own logic, which is driven by tradition, custom and values that are difficult to shed," he points out.

Satellite dish antennas reach rural India

Fulcrum's Gowthaman says, "The biggest impending factor or deterrent on rural monies going up is that there is a general sense of trying to benchmark cost per contact (CPC). The television CPC is going to anyways be cheaper to rural CPC and unless and until the volume - value equation turns the other way round, you will not be able to spend disproportionate monies in the rural market."For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in giving the consumers a trial opportunity. While it does help in generate volume but not in terms of values. "Till the time that volume - value equation is managed better, the CPC is preventing anybody to look at rural at a large scale activation programme," reiterates Gowthaman.Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactivity.

Anugrah Madison's chairman and managing director RV Rajan sums up, "There is better scope for language writers who understands the rural and regional pulse better. I also see great scope for regional specialists in the areas of rural marketing - specialists like Event Managers, Wall painters, folk artists, audio visual production houses. In fact all those people who have specialized knowledge of a region are bound to do well, thanks to the demands of the rural marketers."So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by some, but there seems to be a long way for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so back. Things are sure a changing!

OBJECTIVES OF THE STUDY

Any task without sound objectives is like Tree without roots. Similarly in case of any research study undertaken, initially the objectives of the same are determined and accordingly the further steps are taken on. A research study may have many objectives but all these objectives revolve around one major objective which is the focus of the study. In this study, the focus is on the emergence of rural markets as the most happening market on which every marketer has an eye. And so this study will be based on studying the emergence of rural market in various contexts. The main objective of the study is to analyse and present the marketing of consumer products in rural areas. The following objectives have been set forth. They are to:1. Present a rural marketing perspective.1. Present a profile of Indian Rural market.1. Study and analyse the consumer behavior in rural areas.1. Examine the product and brand penetration in rural markets.1. Analyze marketing of consumer product in rural markets.1. Present marketing strategy frame for marketing consumer products in rural areas.

SCOPE OF THE STUDY: The study is restricted to selected districts of UTTAR PRADESH. Further, product and brand penetration is examined. As regards marketing of consumer products in rural areas, the study analyzes products from non durable category (a bathing soap, detergents, tea, coffee, shampoo) and from durable category (a wrist watch, television, refrigerator, fan and bicycle).

Data collection

Sample unit:1. Working people (including men &women), basically farmers.2. College students3. School students4. Senior citizen

Sample size:1. Working people : 32%2. College students: 29%3. School students : 23%4. Senior citizens : 16%

Sampling region:1. I have selected Uttar Pradesh, of Uttar Pradesh as the area of study.1. I have chosen BHOWAPUR, MORTI, SHAHPUR and ATTOR as areas of research. The population status of these areas can be shown in a tabulated manner, which is given as follows:

Area Population

BHOWAPUR2500

MORTI3000

SHAHPUR5000

ATTOR4000

Data collection method:1. Primary data: it will be collected with the help of a self administered questionnaire. This questionnaire aims to gather information related to various Branded products.

Questionnaire design:As the questionnaire is self administrated one, the survey is kept simple and user friendly. Words Used in questionnaire are readily understandable to all respondent. Also technical jargons are avoided to ensure that there is no confusion for respondents.

2. Secondary data: it will be collected with the help of books, research papers, magazines, news papers, journals, Internet, etc.

REVIEW OF LITERATURE

Rural market is one of the best opportunities for the FMCG sector. In some sense we can say that rural market is future of FMCG.

1. Basu Purba (2004), suggested that the lifestyle of rural consumers is changing. Rural Indian market and the marketing strategy have become the latest marketing buzzword for most of the FMCG majors. She added the strategies of different FMCG companies for capturing rural market like Titans Sonata watches, Coco Colas 200mlbottle, different strategies of HUL and Marico etc. She takes into consideration the study of National Council for Applied Economic Research (NCAER).According to the NCAERprojections, the number of middle and high-income households in rural area is expected to grow from 140 million to 190 million by 2007.In urban India, the same is expected to grow from 65 million to 79 million. Thus, the absolute size of rural India is expected to be double that of urban India.

2. Tognatta Pradeep (2003), suggested that, the economic growth in India's agricultural sector in last year was over 10%, compared with 8.5%in the industrial sector. This implies a huge market potentiality for the marketer to meet up increasing demand. Factors such as village psyche,strong distribution network and market awareness are few prerequisites for making a dent in the rural markets. The model is of the stolid Anglo-Dutch conglomerate Unilever Group, which has enjoyed a century-long presence in India through its subsidiary Hindustan Lever Ltd. It was Hindustan Lever that several years ago popularized the idea of selling its products in tiny packages. Its sachets of detergent and shampoo are in great demand in Indian villages. Britannia with its low priced Tiger brand biscuits has become some of the success story in rural marketing.

3. Dr. N. Rajendhiran(MBA, PhD)/ Mr. S. Saiganesh(MBA, MA, M.Phil)/ Ms. P. Asha(MBA)Prime Minister Dr. Manmohan Singh recently talked about his vision for rural India: "My vision of rural India is of a modern agrarian, industrial and services economy co-existing side by side, where people can live in well-equipped villages and commute easily to work, be it on the farm or in the non-farm economy. There is much that modern science and technology can do to realise this vision. Rural incomes have to be increased. Rural infrastructure has to be improved. Rural health and education needs have to be met. Employment opportunities have to be created in rural areas." 'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in villages. The Rural population is nearly three times the urban, so that Rural consumers have become the prime target market for consumer durable and non-durable products, food, construction, electrical, electronics, automobiles, banks, insurance companies and other sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Although a lot is spoken about the immense potential of the unexplored rural market, advertisers and companies find it easier to vie for a share of the already divided urban pie.

RESEARCH METHODOLOGY

Research methodology is simple framework or plan for the study that is as guide in collection and analyzing the data. It is the blue print that is followed in completes the study. Thus, good research methodology ensures the completion of project efficiency and affectivity. Since there are many aspect of research methodology, the line of action has to be chosen from the variety of alternatives, to choose the suitable method through the assessment from various alternatives. Research methodology gives the researcher an opportunity to put forward his argument for having opted for certain alternatives and also at the same time he can justify his ruling out some other possibility likes. Why research study has been undertaken, how the research problem has been formulated what data has been collected, what particular technique if analyzing the data has been used and lot of similar type question are usually answered when we talk of research problem in study. Keeping in view the above stated objectives the following methodology was adopted:The Marketing Research ProcessDefine the problem and Research Objectives: - The first and main step of any research is to define the relevant problems or objective for which the researcher wants to do research.Develop the research plan: -.To makes the plan for overall research as how, when, where and from whom researcher will collect the dataCollect the information: -The information can be collected by primary data or secondary data, or by the combination of both methods.

METHODS OF DATA COLLECTION:-

PRIMARY DATAMarket Survey Personal Interview SECONDARY DATA Internet Business Journal

Analyze the information: -After collecting the data the next step is to analyze the information.Present the findings: -To make a summary on the basis of analyzing the collect data and find out the situationMake the decision: -The last step is to take a decision on the basis of finding that what action should be regarding the findings

INDIA INFRASTRUCTUREThe best barometer of countrys economic standing is measured by its GDP. India, the second most populated country of more than 1100 million has emerged as one of the fastest growing economies. It is a republic with a federal structure and well-developed independent judiciary with political consensus in reforms and stable democratic environment .In 2008-09 Indias economy-GDP grew by 6.5% due to global recession. In the previous four years, economy grew at 9%.The Indian economy is expected sustain a growth rate of 8% for the next three years up to 2012. With the expected average annual compounded growth rate of 8.5%, India's GDP is expected to be USD 1.4 trillion by 2017 and USD 2.8 trillion by 2027. Investment Opportunities In Indian Infrastructure

The robust current growth in GDP has exposed the grave inadequacies in the countrys infrastructure sectors. The strong population growth in India and its booming economy are generating enormous pressures to modernize and expand Indias infrastructure. The creation of world class infrastructure would require large investments in addressing the deficit in quality and quantity. More than USD 475 bn worth of investment is to flow into Indias infrastructure by 2012. No country in the world other than India needs and can absorb so many funds for the infrastructure sector. With the above investments Indias infrastructure would be equal to the best in the world by 2017.In the next five years planned infrastructure investment in India in some key sectors are (at current prices): Modernization of highways -US$ 75 billion, Development of civil aviation US$ 12 billion, Development of Irrigation system- US$ 18 billion, Development of Ports-US$ 26 billion, Development of Railways- US$ 71 billion, Development of Telecom- US$ 32 billion, Development of Power -US$ 232 billion. Thus in the eleventh five year plan ,investment in the above sectors (Aviation infrastructure ,Construction infrastructure, Highway infrastructure ,Power infrastructure, Port infrastructure ,Telecom infrastructure ) will be US$ 384 billions(Rs 17,20,000 Crores) considering the huge infrastructure market potential in India. In addition to the above, investments to the tune of US$ 91 billions have been planned in other infrastructure sectors like Tourism infrastructure ,Urban infrastructure ,Rural infrastructure, SEZs ,and water infrastructure and sanitation infrastructure thus making the total infrastructure investments in the eleventh plan period 2007-08 to 2011-12 as US$475 billions. Domestic and global infrastructure funds have exposure to Indian infrastructure sectors.

Rural MarketingRural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.

URBANRURAL

URBANRURAL

RURALRURAL

It is a two-way marketing process wherein the transactions can be:1. Urban to Rural: A major part of rural marketing falls into this category. It involves the selling of products and services by urban marketers in rural areas. These include: Pesticides, FMCG Products, Consumer durables, etc.2. Rural to Urban: Transactions in this category basically fall under agricultural marketing where a rural producer seeks to sell his produce in an urban market. An agent or a middleman plays a crucial role in the marketing process. The following are some of the important items sold from the rural to urban areas: seeds, fruits and vegetables, milk and related products, forest produce, spices, etc.3. Rural to Rural: This includes the activities that take place between two villages in close proximity to each other. The transactions relate to the areas of expertise the particular village has. These include selling of agricultural tools, cattle, carts and others to another village in its proximity.

Rural marketing requires the understanding of the complexities. Indian agricultural industry has been growing at a tremendous pace in the last few decades. The rural areas are consuming a large number of industrial and urban manufactured products. The rural agricultural production and consumption process plays a predominant role in developing the Indian economy. This has designed a new way for understanding a new process called Rural Marketing.

INDIAN RURAL MARKET:Rural marketing in India is not much developed there are many hindrances in the area of market, product design and positioning, pricing, distribution and promotion. Companies need to understand rural marketing in a broader manner not only to survive and grow in their business, but also a means to the development of the rural economy. One has to have a strategic view of the rural markets so as to know and understand the markets well. In the context of rural marketing one has to understand the manipulation of marketing mix has to be properly understood in terms of product usage. Product usage is central to price, distribution, promotion, branding, company image and more important farmer economics, thus any strategy in rural marketing should be given due attention and importance by understanding the product usage, all elements of marketing mix can be better organised and managed.Evolution of Rural Marketing

PhaseOriginFunctionMajorProductsSourceMarketDestinationMarket

IBefore Mid-1960 (from independence to green revolution)Agricultural MarketingAgriculturalProduceRuralUrban

IIMid- Sixties (Green revolution to Pre-liberalization period)Marketing OfAgricultural InputsAgriculturalInputsUrbanRural

IIIMid- Nineties (Post-liberalization period on 20th century)RuralMarketingConsumables AndDurables ForConsumption & ProductionUrban & RuralRural

IV

21st centuryDevelopmental marketingAll products & servicesUrban & RuralUrban & Rural

1. Phase I ( from Independence to Green Revolution): Before the advent of the Green revolution, the nature of rural market was altogether different. Rural marketing then referred to the marketing of rural products in rural & urban products.2. Phase II (Green Revolution to Pre-liberalization period):During these times, due to the advent & spread of the Green Revolution, rural marketing represented marketing of agriculture inputs in rural markets & marketing of rural produce in urban areas.3. Phase III (Post-liberalization period on 20th century):The third phase of rural marketing started after the liberalization of the Indian economy. In this period, rural marketing represented the emerging, distinct activity of attracting & serving rural markets to fulfill the need & wants of rural households, peoples & their occupations. 4. Phase IV (21st century):Learning from its rural marketing experiences after the independence, the corporate world has finally realized the quick-fix solutions & piecemeal approaches will deliver only limited results in the rural markets. And, if an organization wants to tap the real potential of the rural market, it needs to make a long-term commitment with this market. Its approach & strategies must not focus in just selling products & services, but they should also aim at creating an environment for this to happen.

The objective of rural marketing in the current phase is the improvement of the quality of life by satisfying the needs & wants of the customers, not through atand-alone products or services, but by presenting comprehensive & integrated solutions which might involve a set of inter-related products & services. Till recently, the focus of marketers in India was the urban consumer and by large number specific efforts were made to reach the rural markets. But now it is felt that with the tempo of development accelerating in rural India, coupled with increase in purchasing power, because of scientific agriculture, the changing life style and consumption pattern of villagers with increase in education, social mobility, improved means of transportations and communication and other penetrations of mass media such as television and its various satellite channels have exposed rural India to the outside world and hence their outlook to life has also changed. Because of all these factors, rural India is now attracting more and more marketers.Increase in competition, saturated urban markets, more and move new products demanding urban customers, made the companies to think about new potential markets. Thus, Indian rural markets have caught the attention of many companies, advertisers and multinational companies. According to a recent survey conducted by the National Council for Applied Economic Research (NCAER), the purchasing power of the rural people has increased due to increase in productivity and better price commanded by the agricultural products. By and large this rise in purchasing power remains unexploited and with the growing reach of the television, it is now quite easy for the marketers to capture these markets.

RURAL INFRASTRUCTURE:

1) 46 percent of villages are connected by all-weather roads.2) 84 percent of villages are electrified.3) 5700 regulated markets.In the early 2000s, around 700 million people, i.e. 70% of the Indian population lived in 6, 27,000 villages, in rural areas. Of this, 90% were concentrated in villages with population less than 2000.3 According to a study conducted in 2001 by the National Council for Applied Economic Research (NCAER), there were as many "middle income and above" households in rural areas as there were in urban areas.

There were almost twice as many "lower income households" in rural areas as in urban areas. There were 2.3 million "highest income" households in urban areas as against 1.6 million in rural areas. NCAER projections indicated that the number of "middle income and above" households was expected to grow to 111 million in rural India by 2007, compared to 59 million in urban India. Gone were the days when a rural consumer had to go to a nearby town or city to buy a branded product. The growing power of the rural consumer was forcing big companies to flock to rural markets. At the same time, they also threw up major challenges for marketers.

FMCGThere was a time when the FMCG companies ignores rural market, they took no any interest to produced or sell products in rural market in India. It was the initial stage of FMCG companies in India. As per as the time hadPassed, the strategy and marketing style of FMCG companies had been changed. The rural market is the one of the best opportunity for the FMCG sector in the India. It is wider and less competitive market for the FMCG.As the income level of the rural consumers increasing, the demand of FMCG isIncreasing continuously.

Top Players in FMCG Sector1. Hindustan lever limited (HLL)2. ITC (Indian Tobacco Company)3. Nestle India4. GCMMF (AMUL)5. Dabur India6. Asian Paints (India)7. Cadbury India8. Britannia Industries9. Procter&Gamble Hygiene &Health Care10. Marico Industries

Secondary Players1. Colgate-Palmolive (India) Ltd.2. Godrej Consumers Product Ltd.3. Nirma Ltd.4. Tata Tea Ltd.5. Parle Agro

Rural consumers spend around 13 per cent of their income, the second highest after food (35 per cent), on fast moving consumer goods (FMCG), as per a RMAI study. The FMCG industry in India was worth around US$ 16.03 billion in August 2008 and the rural market accounted for a robust 57 per cent share of the total FMCG market in India. The FMCG sector saw rural markets post 20 per cent growth, ahead of the 17-18 per cent growth from urban India, aided by three years of good monsoon, higher prices of farm produce and farm-loan waiver. Most FMCG companies are now working on increasing their distribution in smaller towns and focussing on marketing and operations programme for semi-urban and rural markets. For instance, Godrej Consumer Products intends to increase revenue from rural areas from 38 per cent to 55 per cent in the next three years by increasing its distribution network substantially. The products will reach out to 50,000 villages in the next couple of years from the present 18,000 villages while the number of towns covered will double from 3,300 to almost 6,500 in a year.

RetailThe rural retail market is currently estimated at US$ 112 billion, or around 40 per cent of the US$ 280 billion retail market. Major domestic retailers like AV Birla, ITC, Godrej, Reliance and many others have already set up farm linkages. Hariyali Kisan Bazaars (DCM) and Aadhars (Pantaloons-Godrej JV), Choupal Sagars (ITC), Kisan Sansars (Tata), Reliance Fresh, Project Shakti (Hindustan Unilever) and Naya Yug Bazaar are established rural retail hubs.

PharmaceuticalsAccording to a report by McKinsey, the rural and tier-II pharma market will account for almost half of the growth till 2015. The tier-II market will grow to 44 per cent by 2015, amounting to US$ 8.8 billion. This growth will be further augmented with the government increasing the allocation under National Rural Health Mission (NRHM) by US$ 424.3 million over interim budget estimate 2009-10 of US$ 2.49 billion. Elder Pharmaceuticals is increasing its focus on the rural market. The company that largely makes active pharmaceutical ingredients, plans to increase its sales by 8-9 per cent mainly from rural areas and has allocated US$ 8.26 million to strengthen the sales force for this segment.

Telecommunication A Gartner forecast revealed that Indian cellular services revenue will grow at a compound annual growth rate (CAGR) of 18.4 per cent to touch US$ 25.6 billion by 2011, with most of the growth coming from rural markets. Also, a joint Confederation of Indian Industries (CII) and Ernst & Young report reveals that of the next 250 million Indian wireless users, approximately 100 million (40 per cent) are likely to be from rural areas, and by 2012, rural users will account for over 60 per cent of the total telecom subscriber base in India.

In a bid to acquire rural subscribers, most Indian telecom operators have started investing in infrastructure to roll out their services in these areas. Realizing this as a huge potential, small Indian handset manufacturing companies, including Micromax, Intex Technologies and Karbonn, have lined up a marketing spent of around US$ 21.02 million for the financial year 2009-10.

AutomobilesFor the auto industry, semi-urban and rural markets contribute close to 40 per cent of sales, led by demand for two-wheelers, entry-level cars and tractors. Significantly, car sales grew 8.3 per cent in June 2009, aided by rising demand in semi-urban and rural markets. Mahindra & Mahindra is bullish on the rural and semi-urban markets, with its utility vehicle, Scorpio clocking 60-65 per cent sales from the rural markets as against 20 per cent earlier. TVS Motor also registered around 50 per cent of its sales from the rural and semi-urban markets.

Consumer durablesA survey carried out by RMAI has revealed that 59 per cent of durables sales come from rural markets. Presently, around 50 per cent of sales in the US$ 5.14 billion consumer electronics industry come from the urban markets, 30 per cent from tier-II and -III towns and balance 20 per cent from rural India. Many leading consumer durable companies are now increasing their presence in rural India. Recently, LG has set up 45 area offices and 59 rural and remote-area offices. Moreover, it has outlined plans to invest around US$ 40 million towards development of entry-level products targeted at rural markets. Samsung has also rolled out its 'Dream Home' road show which was to visit 48 small towns in 100 days in an effort to increase brand awareness of its products. Samsung expects that its rural revenues would increase to US$ 287.7 million in 2009 from US$ 164.4 million last year. The company also plans to expand its sales channel by 25-30 per cent in rural India. Whirlpool, is eyeing rural markets in India for its next phase of growth. The company is set to tap markets with a population between 100,000 and 500,000 in the first phase, and in the next phase, will look at expanding the base in villages with a population of 50,000.

Model: The model of rural marketing represents a combination of the transactional and developmental approaches. Rural marketing process is both a catalyst as well as an outcome of the general rural development process. Initiation and management of social and economic change in the rural sector is the core of the rural marketing process. It becomes in this process both benefactor and beneficiary. Innovation is the essence of marketing. Innovative methods of social change for successful transformation of traditional society are virtual. Such a change narrows the rural-urban divide. The process of transformation can be only evolutionary and not revolutionary. The growth of the rural market can be a planned evolutionary process based on strategic instruments of change rather than constitute just short-term opportunities for commercial gains. The exposure of ruralites to a variety of marketing transactions during the change process puts them in the role of beneficiaries than of just `buyers' of modern inputs and infrastructural services. Communication is the vital element of rural marketing. It should serve to resolve social conflicts, encourage cooperation and strengthen competitive spirit during interactions between rural and urban as well as within ruralareas. Another critical point for communication is the point of conversion of ruralite from an "induced beneficiary" to an "autonomous buyer".

Classification of rural consumersThe rural consumers are classified into the following groups based on their economic status: The Affluent Group: They are cash rich farmers and a very few in number. They have affordability but not form a demand base large enough for marketing firms to depend on. Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this group. The Middle Class: This is one of the largest segments for manufacturedgoods and is fast expanding. Farmers cultivating sugar cane in UP andKarnataka fall in this category. The Poor: This constitutes a huge segment. Purchasing power is less,but strength is more. They receive the grants from government and reapthe benefits of many such schemes and may move towards the middleclass. The farmers of Bihar and Orissa fall under this category.

Roadblocks of Indian Rural MarketThere are several roadblocks that make it difficult to progress in the rural market. Marketers encounter a number of problems like dealing with physical distribution, logistics, proper and effective deployment of sales force and effective marketing communication when they enter rural markets. The major problems are listed below.1. Standard of living: The number of people below the poverty line is more in rural markets. Thus the market is also underdeveloped and marketing strategies have to be different from those used in urban marketing.2. Low literacy levels: The low literacy levels in rural areas leads to a problem of communication. Print media has less utility compared to the other media of communication.3. Low per capita income: Agriculture is the main source of income and hence spending capacity depends upon the agriculture produce. Demand may not be stable or regular.4. Transportation and warehousing: Transportation is one of the biggest challenges in rural markets. As far as road transportation is concerned, about 50% of Indian villages are connected by roads. However, the rest of the rural markets do not even have a proper road linkage which makes physical distribution a tough task. Many villages are located in hilly terrains that make it difficult to connect them through roads. Most marketers useTractors or bullock carts in rural areas to distribute their products. Warehousing is another major problem in rural areas, as there is hardly any organized agency to look after the storage issue. The services rendered by central warehousing corporation and state warehousing corporations are limited only to urban and suburban areas.5. Ineffective distribution channels: The distribution chain is not very well organized and requires a large number of intermediaries, which in turn increases the cost and creates administrative problems. Due to lack of proper infrastructure, manufacturers are reluctant to open outlets in these areas. They are mainly dependent on dealers, who are not easily available for rural areas. This is a challenge to the marketers.6.Lack of communication system: Quick communication is the need of the hour for smooth conduct of business, but it continues to be a far cry in rural areas due to lack of communication facilities like telegraph and telecommunication systems etc. The literacy rate in the rural areas is rather low and consumers behaviour in these areas is traditional, which may be a problem for effective communication.

Attractiveness of rural market

1. Large Population: The rural population is large and its growth rate is also high. Despite the rural urban migration, the rural areas continue to be the place of living majority of Indians.

2. Rising Rural Propensity: Income Group2000-012005-062008-09

Above Rs. 100,0001.63.85.6

Rs. 77,001-100,0002.74.75.8

Rs. 50,001-77,0008.313.022.4

Rs. 25,001-50,00026.041.144.6

Rs.25,000 & below61.437.420.2

Thus we see that population between income level of Rs. 25,000- 77,000 will increase from 34.3% in 1994-95 to 67.0% in 2006-07. The rural consuming class is increasing by about 3-4% per annum, which roughly translates into 1.2 million new consumers yearly.\

3. Growth in consumption:Percapita household expenditure (in Rs.)

LevelNo.StatesExpenditure

High (Above Rs 382/-)7Punjab614

Kerala604

Haryana546

Rajasthan452

Gujarat416

Andhra Pradesh386

Maharashtra384

Average (Rs. 382/-)5West Bengal382

Orissa381

Tamil Naidu381

Uttar Pradesh373

Karnataka365

Low (Below Rs. 382/-)3Assam338

Madhya Pradesh326

Bihar289

Distribution households income wise (projection in Rs Crore)Income groups2001 022006 07

RuralRural

TotalNo.%TotalNo.%

High0.260.0726.90.520.1223.1

Middle12.047.7364.216.7210.3261.8

Low5.75.0988.73.683.5295.7

Total18.0412.8971.420.9013.9666.7

Spending pattern (Rural Households in Rs.)Item%RichPoorAverage

Food Articles441477395

Toiletries20673343

Washing Material13432228

Cosmetics10331721

Otc Products41369

Others9301519

Total333166215

Average rural household spends on consumables excluding food grains, milk & vegetables are Rs. 215/-.

4. Life style changes:Income vs. usage of packed consumer goods (% of household using)GoodsMonthly household income (Rs.)

Up to 350351 750751 15001501 +

Washing Cakes/Bars60788691

shampoos57728993

Tooth Paste/Powder22366585

bathing soaps20254163

Tea (Packaged)22304864

5. Life cycle advantage:Stages in life cycleProductUrbanMarket Growth Rate %Rural

Popular soapsMaturity2Growth

Premium soapsLate growth11Early growth

Washing powderLate growth6Early growth

Skin creamsMaturity1.1Growth

Tea Maturity4Growth

6. Market growth rates higher: Growth rates of the FMCG market and the durable market are higher in rural areas for many products. The rural market share will be more than 50% for the products like toilet soaps, body talcum powder, cooking medium (oil), cooking medium (vanaspati), tea, cigarettes and hair oil.7. Rural marketing is not expensive: Conventional wisdom dictates that since rural consumers are dispersed, reaching them is costly. However, new research indicates that the selling in Rural India is not expensive. According to one research it costs roughly Rs.1 Crore to promote a consumer durable inside a state. This includes the expenses of advertising in vernacular newspapers, television spots, in-cinema advertising, radio, van operations and merchandising and point of purchase promotion. Campaign like this, which can reach millions, costs twice as much in urban area.8. Remoteness is no longer a problem: Remoteness in a problem but not insurmountable. The rural distribution is not much developed for the reasons, Lack of proper infrastructure such as all-weather roads, electrification and sanitation, and Lack of marketers imagination and initiative.

Rural Vs Urban MarketingNo.AspectUrbanRural

1PhilosophyMarketing & Societal Concepts & Relationship MarketingMarketing & Societal Concepts, Development Marketing & Relationship Marketing

2a) Market

b) DemandHighLow

c) CompetitionAmong Units In Organized SectorMostly From Unorganized Units

Consumers

LocationConcentratedWidely Spread

LiteracyHighLow

IncomeHighLow

ExpenditurePlanned, EvenSeasonal, Variation

NeedsHigh LevelLow Level

Innovation/AdoptionFasterSlow

3Product

AwarenessHighLow

ConceptKnownLess Known

PositioningEasyDifficult

Usage MethodEasily GraspedDifficult To Grasp

Quality PreferenceGoodModerate

4Price

SensitiveYesVery much

level desiredMedium-highMedium-low

CONSUMER BEHAVIOR IN RURAL MARKETSPromotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor. The Indian established Industries have the advantages, which MNC don't enjoy in this regard. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market. The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area. This paper is therefore an attempt to promote the brand image in the rural market. Indian Marketers on rural marketing have two understanding (I) the urban metro products and marketing products can be implemented in rural markets with some or no change. (ii) The ruralmarketing required the separate skills and techniques from its urban counterpart. The Marketers have following facilities to make them believe in accepting the truth that rural markets aredifferent in so many terms. .

(i)The rural market has the opportunity for.(ii) Low priced products can be more successful in rural markets because the low purchasing, purchasing powers in rural markets.(iii) Rural consumers have mostly homogeneous group with similar needs, economic condition (iv) The rural markets can be worked with the different media environment as opposed to press, film, radio and other urban centric media exposure. .

RURAL CONSUMER PREFERENCES:

In order to assess the buyer behavior towards certain critical aspects of marketing, the preferences of the consumers is directly related to:1) Price2) Quality3) Credit4) Variety5) Dealer advice6) Specific brand.

PURCHASE BEHAVIOR: Rural people can buy only from three places includes:1) From the shop in the same village2) Weekly bazaar3) From the shop of nearby town.

Factors influencing buying behaviorThe various factors that affect buying behavior of in rural India are:1. Environmental of the consumer- The environment or the surroundings, within which the consumer lives, has a very strong influence on the buyer behavior, egs. Electrification, water supply affects demand for durables. 2. Geographic influences - The geographic location in which the rural consumer is located also speaks about the thought process of theConsumer. For instance, villages in South India accept technology quicker than in other parts of India. Thus, HMT sells more winding watches in the north while they sell more quartz watches down south. 3. Family it is an important buying decision making organization in consumer markets. Family size & the roles played by family members exercise considerable influence on the purchase decisions. Industry observers are increasingly realizing that at times, purchase of durable has less to do with income, but has more to do with the size of the family & thats where rural India with joint family structures, becomes an attractive proposition.4. Economic factors The quantum of income & the earning stream are one of the major deciding factors, which determine to a great extent, what the customer will be able to buy. Many people in the rural market are below poverty line & for large number of people, agriculture is the primary occupation. More than 70% of the people are in small-scale agricultural operation. These factors affect the purchase decision.

Cultural factors influencing consumer behaviorCultural factors exert the broadest and deepest influence on consumer behavior. The marketer needs to understand the role played by the buyers culture. Culture is the most basic element that shapes a persons wants and behavior.In India, there are so many different cultures, which only goes on to make the marketers job tougher. Some of the few cultural factors that influence buyer behavior are:1. Product (colour, size, design, and shape): There are many examples that support this point. a. For example, the Tata Sumo, which was launched in rural India in a white colour, was not well accepted. But however, when the same Sumo was re-launched as Spacio (a different name) and in a bright yellow colour, with a larger seating capacity and ability to transport good, the acceptance was higher.

b. Another good example would be Philips audio systems. Urban India looks at technology with the viewpoint of the smaller the better. However, in rural India, the viewpoint is totally opposite. That is the main reason for the large acceptance of big audio systems. Thus Philips makes audio systems, which are big in size and get accepted in rural India by their sheer size.2. Social practices: There are so many different cultures, and each culture exhibits different social practices. For example, in a few villages they have common bath areas. Villagers used to buy one Lifebuoy cake and cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram soap bars, which could be used individually.3. Decision-making by male head: The male in Indian culture has always been given the designation of key decision maker. For example, the Mukhiyas opinion (Head of the village), in most cases, is shared with the rest of the village. Even in a house the male head is the final decision maker. In rural areas, this trend is very prominent.

4 Changes in saving and investment patterns: From gold, land, to tractors, VCRs, LCVs

4 As approach of Indian Rural MarketThe rural market may be appealing but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 As)

Availability The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market saturation. Over the years, 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.

Affordability The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of who are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Most of the shampoos are available in smaller packs. Fair and lovely was launched in a smaller pack. Colgate toothpaste launched its smaller packs to cater to the travelling segment and the rural consumers.Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh the so-called `Bimaru' States. Hindustan Lever, among the first MNCs to realize the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. 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.

Acceptability The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it 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. Because of the 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. Awareness Brand 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 family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence. Hindustan Lever relies heavily on its own company-organized media. These are promotional events organized by stockiest. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language. Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, 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 MNCs ready to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins.

CUSTOMIZATIONNEMPOWEREMENTEDUCATION

The traditional marketing hypothesis tends to ignore the requirement of a developingcountrys rural needs. The concept of marketing has to be taken in conjunction witheconomic, psychological and social implications. Hence, the concept of Mega-Marketingwhere all such factors are taken into consideration while developing the Marketing Mix ismore relevant to succeed and build enduring brands. In rural Indias case the two mostimportant considerations are Education and Empowerment opportunities which traditional approaches of marketing fail to acknowledge. Then only the opportunity provided by the rural market can be fully tapped.12.2% of the world lives in Rural India. Put in a different context, this works out to 1 in 8 people on Earth. Being able to successfully tap this growing market is every marketers dream. However, myths abound. Indias rural markets are often misunderstood. A clear distinction needs to be made with regard to the reality versus the image of rural India. If such a distinction is not made, we will be unable to distinguish between the serpent and the rope and the rope and the serpent.

Product

Authentic marketing is the art of identifying and understanding customer needsand creating solutions that deliver satisfaction to the customers, profits to theproducers and benefits for the stakeholders. ................... Philip Kotler

The product offerings have to be not only customized but also at a different planealtogether in case of rural markets. The various product levels as outlined by Philips Kotler, namely Core Benefit, Basic Product, Expected product, augmented product and Potential Product should be adequately taken into consideration and the product offerings should be henceforth customized according to the needs.The Rural market is not a homogenous set of customers with preferences frozen in time. When developing products in any category, marketers must identify the typical rural specific needs. Urban products cannot be dumped onto rural markets without modifications. Tailor-made products are better received by the rural audience as the consumers feel empowered and tend to dentify with the offering.Most of the times in the urban market the product is offered at the augmented productlevel where the objective of the product offering is to exceed the customer expectation.But in the rural markets of India which have been till date characterized by the absenceof the choice, sub-standard products and cheap clones of their urban counterparts; the immediate level to be

operated is the Expected product where his expectations are met. Also, due to the low level of incomes and literacy levels, it is imperative that the basic needs of the consumer are met.

For instance, shampoos or soaps with distinctive, strong rose or jasmine perfumes are very popular with the rural women in South India. The urban women do not identify as strongly with these perfumes. Sachetization is also a distinctly rural-driven phenomenon. As demand in several categories is being created, intensity of use is quite low. On average, rural folk would use a shampoo only once a week. Habits take time to change and making unit sachet packs affordable is the key to inducing trial and purchase.

PricingA significant portion of the rural population is paid in daily wages. Daily wage earnerstend to have little stock of money, and therefore tend to make purchases only to meettheir daily needs. The implication is that pack sizes and price points are critical to sales,and importantly, that rural consumers view the purchase-tradeoff dilemma across a muchwider range of product categories. As a result, the nature of competition is much greater;a beverage manufacturer is not only competing with other manufacturers in its category, but also other products that consumers may consider one-off luxury purchases such as shampoo. So marketer will have to examine method by which he can make the product more affordable. In the case of consumer durable one way is to work through rural bank and offer higher purchase terms to consumer. In short, the Value for money is the most important concept that will differentiate the successful brand from the rest.

BUDGET CONSCIOUS CONSUMERSTATUS SEEKING CONSUMERS

Every marketer must realize that the rural consumer is not a miser. He is not simply looking for the cheapest product in every category. He understands and demands value for money in every purchase that he makes. Pricing therefore is a direct function of factors including cost-benefit advantage and opportunity cost. Pricing offered to consumers should be for value offerings that are affordable. Price sensitivity is extremely high and comparison with competitive prices is common. Consumers seem to create narrow psychological price bands in theirMinds for product groups and price elasticity beyond the extreme price points are very high. The perceived utility or value of the product or service is the ultimate decision making factor..

Promotions & AdvertisingThere are a lot of barriers that militate against homogenous media and message delivery. These barriers stem from the fact that rural markets vary immensely in terms of tastes, habits and preferences leading to different expectations of every segment of the population.However, one fact is certain across all areas. The rural consumer likes to touch and feel a product before making a choice. Demonstrations are undoubtedly the most effective promotional tool that shapes purchase decisions of the rural population. Demonstrations establish the credentials of any new technology used in developing the product.In todays information era, it is very important for companies to wise-up on emerging technologies. It has in fact become a medium to attract larger audiences for a product demonstration. Technology must be used to prepare a database of customers and their requirements. The use of video using mobile vans and even large screen video walls at events should be arranged.The classic conundrums of reach and coverage of the media are shattered. Several creative communication media have been used by various companies to tackle the problem of having to use visual communication and non-verbal communication to reach the rural audience. This is required because a large proportion of the rural population cannot read or write. Alliances with cottage industries, dharmsalas, panchayats, post offices and police stations for advertising have also helped immensely. More importantly, in rural India, experience has proved time and time again that word of mouth is the key influencer.

Youth power is becoming increasingly evident in villages. Rural youth bring brand knowledge to the households. This has forced several companies to change the focus and positioning of their products and services towards this segment that is growing in absolute number and relative influence.There are other attributes in the promotion strategy which are explained as under:1.Mass media: In the present world mass media is a powerful medium of communication. The following are the mass media generally used: Television. Cinema. Radio. Print media: Handbills and Booklets, posters, stickers, banners, etc. 2.Personal selling and opinion leaders: In personal selling it is required that the potential users are identified and awareness is created among them about the product, its features, uses and benefits. This can be achieved only by personal selling by highly motivated sales person. In fact the word of mouth information holds lot validity in rural areas even today. This is the reason why opinion leaders and word of mouth are thriving among rural consumers. An opinion leader in rural areas can be defined as a person who is considered to be knowledgeable and is consulted by others and his advice is normally followed. The opinion leaders may be big landlords or politicians or progressive farmers.

3. Special campaigns: During crop harvest and marketing seasons it is beneficial to take up special promotion campaigns in rural areas. Tractor owners (tonee) conducted by MRF Limited is one such example. Brooks Bond carries out marches in rural areas with band, music and caparisoned elephants to promote their brand of tea. Mandi and Mela magicAt last count, India witnessed over 50,000 melas. Of these 25,000 meals are held to signify religious, cultural festivals as well as local fairs and events. On an average, visitors at these melas spend between Rs. 5,000 to Rs. 50,000 a day. For

Example, 3 lakh people visited the annual mela at Navchadi which lasts for 7 days in Meerut. The largest such mela is the Maha Kumbh Mela which is visited by an average of 12 crore people.There is however, a caveat when an organization is considering using mela for marketing their products. Is the audience at this mela fit for promotion of the product at hand? What are the psychographics of this audience? What is the motivational and behavioural impetus that brings visitors to each of these melas. On considering these questions, it has been observed that melas are fit to generate product exposure, package familiarity, brand reminder and word of mouth. However, for products that need concept marketing and those that have high prices, such melas are not suitable promotion media. This is because the time and the mood of the people that visit these melas are not right to digest technical information or for making large purchases. People come to melas to have a good time and are not reminded of such high technology or high priced products when they return home. In the words of Mr. Neville Gomes, Managing Director of Multimedia Aquarius, promotion at melas is like a one night stand. There will be no reminder later. Thus, a large amount of qualitative judgment is indeed in planning promotions at melas by media planners.

Place Place is the major reason behind the evolution of rural marketing as a distinct discipline. A village as a place for promotion, distribution & consumption is very Different from a town or city, thus the general marketing theories cant be applied directly in rural markets.Reaching the right place is the toughest part in todays rural marketing, as most of the products reach up to the nearest townships of any village, but due to higher distribution costs, these products fails to reach the village as the distribution channel fails to put in the required efforts. Most of the times, the rural retailers themselves go to the urban areas to procure these goods. Rural markets imply complex logistical challenges that show up as high distribution costs.

Significance of DistributionNo matter how well devised a companys product, pricing or promotion strategy, the most crucial link in ensuring the success of rural marketing efforts is distribution. Distribution must be strengthened and this would raise investment cost barriers for new entrants.In Rural India, the selection and use of distribution channels is a nightmare. The reason for this is very clear when we consider that on an average, Urban and Rural India both have approximately 3 million retail outlets. However, Urban India has only 4,000 towns where these outlets are located. On the other hand, Rural Indias 3 million outlets are located in 6.3 lakh villages. Thus, marketers are faced with the problem of feeding 3 million shops located in vastly diverse areas each of which records an average sale of only Rs.5,000 per outlet. Further compounding this problem is the fact that even this meagre sale is mostly on credit. The diversity in the distribution of shops is the self-limiting factor in terms of servicing the rural distribution network.

The distribution of outlets however shows that a marketer need not be present in all markets at all times. Being present in 6 lakh villages is virtually impossible for an organization of any size. Rural wealth and demand is concentrated typically at satellite towns, district headquarters, assembly markets and such central

Locations. Rural distribution has a rigid hierarchy of markets that make channel decisions relatively structured.

It is essential for rural marketing companies to understand this hierarchy. Rural folk are habituated to travelling once a week for their weekly purchases to a satellite town. They do not expect such items to be present in every village. For durables where the outlay involved is typically large, the purchase would be made in an assembly market for reasons of choice and availability of adequate cash flow. This is due to the fact that it is at assembly markets that auction yards are present where the farmers congregate to sell their output. After such sale of produce, they are cash rich and can afford to make such purchases. It is therefore not necessary for a marketer of TV sets to take their distribution channel all the way down to the village shop. A TV will not be sold there as the cash flow doesnot exist at that point in the hierarchy of markets. A television distributor must be present at assembly markets which are much smaller in number, more controllable, easier to reach and service. Keeping the hierarchy in mind will help decide the optimum level of penetration required to reach a critical mass of rural consumers.

MARKETING STRATEGIES TO CAPTURE RURAL INDIA

SEGMENTATION OF RURAL MARKETThe first step is to develop & implement any strategy for the rural market should include the appropriate segmentation of the rural market. The important thing is that appropriate segmentation basis need to be applied. Different product categories have different rural markets to cater to & these can be selected by applying different criteria of segmentation. The organization can do the following thing to start with: Focus on select markets. Focus on select villages.

BYCOMMUNICATING AND CHANGING QUALITY PERCEPTION Companies are coming up with new technology and they are properly communicating it to the customer. There is a trade of between Quality a customer perceives and a company wants to communicate. Thus, this positioning of technology is very crucial. The perception of the Indian about the desired product is changing. Now they know the difference between the products and the utilities derived out of it. As a rural Indian customer always wanted value for money with the changed perception, one can notice difference in current market scenario. BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local language for promoting their products. They have started selling the concept of quality with proper communication. Their main focus is to change the Indian customer outlook about quality. With their promotion, rural customer started asking for value for money.

BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hold on the people. Cultural values play major role in deciding what to buy. Moreover, rural people are emotional and sensitive. Thus, to promote their brands, they are exploiting social and cultural values.

BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. They do not see any value in frills associated with the products. They aim for the basic functionality. However, if the seller provides frills free of cost they are happy with that. They are happy with such a high technology that can fulfil their need. As "Motorola" has launched, seven models of Cellular Phones of high technology but none took off. On the other hand, "Nokia" has launched a simple product, which has captured the market. BY ASSOCIATING THEMSELVES WITH INDIA MNCs are associating themselves with India by talking about India, by explicitly saying that they are Indian. M-TV during Independence Day and Republic daytime make their logo with Indian tri-colour. Nokia has designed a new cellular phone 5110, with the India tri-colour and a ringing tone of "Sare Jahan se achcha".

BY TALKING ABOUT A NORMAL INDIAN Companies are now talking about normal India. It is a normal tendency of an Indian to try to associate him/her with the product. If he/she can visualize himself/herself with the product, he /she become loyal to it. That is why companies like Daewoo based their advertisements on a normal Indian family.

Product StrategiesThe specific strategies, which can be employed to develop or modify the products to targets the rural market, can be classified as follows:

1.Small unit packing: Given the low per capita income & purchasing habits of the rural consumers, small unit packages stand a good chance of acceptance in rural market. Single serve packets or sachets are enormously popular in India. They allow consumers to buy only what they need, experiment with new products, & conserve cash at the same time. This method has been tested by products life shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth paste, etc. Small packing stands a good chance of acceptance in rural markets. The advantage is that the price is low and the rural consumer can easily afford it.Also the Red Label Rs. 3.00 pack has more sales as compared to the large pack. This is because it is very affordable for the lower income group with the deepest market reach making easy access to the end user satisfying him.The small unit packing will definitely attract a large number of rural consumers.

2.New product designs: Keeping in view the rural life style the manufacturer and the marketing men can think in terms of new product designs. The rural product usage environment is tough because of rough handling, rough roads & frequent power fluctuations. Thus, all these environmental factors must be considered while developing the products meant for rural audience.Nokias 1100 model is a very good example of a customized model for rural markets. Its design has been modified to protect it against rough usage in rural environment; it is dust resistant & has a small torch light in view of the frequent power cuts in rural India. It is also introduces messaging in Hindi language now, in some of the economically priced models in order to cater to the semi-urban or rural consumers. This is in real terms, thinking global & acting local.

3.Sturdy products: Sturdiness of a product is an important factor for rural consumers. The product should be sturdy enough to stand rough handling, transportation & storage. The experience of torch light dry battery cell manufacturers supports this because the rural consumers preferred dry battery cells which are heavier than the lighter ones. For them, heavier weight meant that it has more over and durability. Sturdiness of a product either or appearance is an important for the rural consumers.

4.Brand name: For identification, the rural consumers do give their own brand name on the name of an item. The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on generic names. A brand name or a logo is very important for a rural consumer for it can be easily remembered. Many a times rural consumers ask for peeli tikki in case of conventional and detergent washing soap.Nirma made a peeli tikki especially for those peeli tikki users who might have experienced better cleanliness with the yellow colored bar as compared to the blue one although the actual difference is only of the color.e.g.: Coca-Cola targeted the whole Indian rural market with the positioning of Thanda Matlab Coca-Cola advertisements because most of the villagers say when wanting a drink refer to it as Thanda so Coca-cola used that word.

Pricing strategies

1. Low cost/ cheap products: This follows from the product strategy. The price can be kept low by low unit packagings like paisa pack of tea, shampoo sachets, vicks 5 grams tin, etc. this is a common strategy widely adopted by many manufacturing and marketing concerns.

2.Refill packs / Reusable packaging: In urban areas most of the health drinks are available. The containers can be put to multipurpose uses. Such measures can a significant impact in the rural market. Forexample, the rural people can efficiently reuse the plastic bottle of hair oil. Similarly the packages of edible oil, tea, coffee, ghee etc can be reused. Pet jars free with the Hasmukhrai and Co Tea, Ariel Super Compact.

3.Application of value engineering: in food industry, Soya protein is being used instead of milk protein. Milk protein is expensive while Soya protein is cheaper, but the nutrition content of both is the same. The basic aim is to reduce the value of the product, so that a larger segment can afford it, thus, expanding the market.

4.Large volume-low margins (Rapid or slow penetration strategy): Marketers have to focus on generating large volumes & not big profit margins on individual products. If they price their product at a level which can lead to good volumes, then they can still generate good returns on the capital employed.

5.Overall efficiency & passing on benefits to consumers: For rural products, the strategy should be to cut down the production, distribution & advertising costs & passing on these benefits to the customers to further increase the turnover. Most often, it has been observed that advertising has less to do with product sales in the rural areas. If an organization gets the price point right, then it can work in rural market.

Promotion strategiesCustomized promotional media & messages need to be developed by the organizations to effectively target the rural market. The following strategies can be considered while developing promotional campaigns for the rural markets: 1. Think Global Act LocalRural population is diverse, but the commonalities of their ethos & simple living habits need to be understood for advertising to succeed. For that, the theme of the advertisement needs to revolve among universal themes, such as family-love. But the context, storyline, language & idioms should be such that the rural audience of different rural market segments can relate to.2. Think in Local IdiomThis is the need of the advertising professionals who can think like the rural people. The only we can have insights like Thanda matlab Coca Cola. There should be the use of language writers who understands the rural & regional pulse better. 3. Simplicity & ClarityAll promotional messages targeted at rural audience need to be simple & clear, which can be easily understood, & they should not include any confusing elements. It is preferable that it has only a few propositions at a time. Bombarding rural consumers with too much, in less time can easily confuse them & leave them bewildered. Promotional message should highlight only the functional values of the product & explains how those values can make the consumers life even better & solve any of his problems.4. Narrative Story StyleThe promotional message can be delivered in the form of an entertaining story with a message depicting how the brand delivers larger good to the family & society. The theme of the story line can be about how the product can solve the problems of the rural consumers. 5. Choice of Brand AmbassadorBrand Ambassador for the rural markets need to be picked carefully as urban successes might not get replicated in the rural markets. That is why Govinda in the Mirinda as boosted the sales of the drink in the rural markets. Distribution StrategyMany companies view the rural markets as great opportunity for expanding their sales but find distribution as a major problem. Unfortunately, it is almost impossible to transplant strategies which work successfully in urban markets onto rural markets, namely, extensive retailing and sustained pull generation through mass media advertising.The road blocks to reach the rural customers are: Lack of adequate transport facilities. Large distances between villages. Lack of pucca roads connecting villages to nearest townships. Lack of proper retail outlets Lack of mass media infrastructure.

The following distribution strategies formulated for the rural category.

1.Coverage of villages with 2000 and above population: Ideally, coverage of villages with up to 2000 and above population could be the break-even point for a distribution setup. By doing so the percentage of villages covered comes to only 10% of all the villages, but the rural population covered will be substantial, to the extent of about 40 to 45 percent. With a distribution network in about 55,000 villages, which have a population of 2000 persons & above each, one can cover about 25 crores rural consumers. This strategy is good to begin with & then subsequently, villages with lesser populations can be added.

2. Segmentation: the number of villages in India is huge & it is not viable to contact & serve all villages directly. Therefore, companies or distributors can carefully examine the market potential of different villages & target the villages that can be served in a financially viable manner through an organized distribution effort.

3.Use of co-operative societies: There are over 3 lacks co-operative societies operating in rural areas for different purposes like marketing cooperatives, farmers service cooperatives and other multipurpose cooperatives. These cooperatives have an arrangement for centralized procurement and distribution through their respective state level federation. Such state level federation can be motivated to procure and distribute consumables items andlow value durable items to the members to the society for serving to the rural consumers. Many of the societies extend credit to the members for purchases. 4.Utilization of public distributory system: The PDS in the country is fairly well organized. The revamped PDS places more emphasis on reaching remote rural areas like the hills and tribals. The purpose of PDS is to make available essential commodities like food grains, sugar, kerosene, edible oils and others to the consumers at a reasonable price. The shops that distribute these commodities are called fair price shops. These shops are run by the state civil Supplies Corporation, co-operatives as well as private entrepreneurs. Here again there is an arrangement for centralized procurement and distribution. The manufacturing and marketing men should explore effective utilization of PDS.

5.Agricultural Input Dealers: Fertilizers should be made available to the farmers within the range of 4-5 km from their residence, as per the essential commodities act. This is why there are about 2 lakh fertilizer dealers in the country, both in cooperative & private sector. Example of Varana Nagar inMaharashtra proved an eye opener in this regard where the sugar and milk co-operatives have totally changed the life style of people

Media VehiclesThrough the rural markets offer big attractions to the marketers, one of the most important questions frequently asked is How do we reach the large rural population through different media and methods?Mass MediaLocal MediaPersonalized Media

RadioHaats, Melas, FairsDirect Communication

CinemaWall PaintingsDealers

PressHoardingsSales Persons

TVResearchers

Formal mediaIt includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor advertisement. Reach of formal media is low in rural households (Print: 18%, TV: 27%, Cinema: 30%, and Radio: 37%) and therefore the marketer has to consider the following points:

Newspapers and magazines:English newspapers and magazines have negligible circulation in rural areas. However local language newspapers and magazines are becoming popular among educated facilities in rural areas. Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in the North, Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas. Television:It has made a great impact and large audience has been exposed to this medium. HLL has been using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the products advertised via television. Regional TV channels have become very popular especially in Southern states. Examples: SUN TV is very popular even in rural areas in Tamil Nadu and

Asianet is a preferred regional channel in Kerala. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rural customer.

Radio:Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies using radio communication programme. There are specific programmers for farmers like Farm and Home/Krishi Darshan in regional languages. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The advertisement has to be released during this time to get maximum coverage in rural areas. Another advantage is that the radio commercial can be prepared at short notice to meet the changing needs of the rural folk. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops.

Cinema:About 65% of the earnings from cinema are from rural markets. Film viewing habits is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatres do roaring business during festivals by having four shows per day. The monthly charge for showing an ad film is within Rs.500. Local distributor or dealer who has good contacts with cinema houses in villages can easily monitor this activity. Examples: Films on products like Vicks, Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides can also be screened in village theatres.

Wall paintings:It is an effective and economical medium for communication in rural areas, since it stays there for a long time depending upon the weather conditions. The cost of painting one square foot area is just Rs.10. Retailers welcome painting of theirshops so that the shop will look better. Walls of farm houses, shops and schools are ideal places for painting and the company need not have to pay any rent for the same. The walls have to be painted at least one or two feet from ground level. It is better to take permission of the owner. Very often the owner takes responsibility for taking care of the wall painting. Painting to be avoided during election time and rainy season. The matter should be in the form of pictures, slogans for catching the attention of people. Companies marketing TV, fans, branded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in rural areas.

Informal/Rural specific mediaThese media with effective reach and personalized communication will help in realizing the promotional objectives. Companies to suit the specific requirements of rural communication are using a variety of such media effectively and some of the more important media and methods are given below.

Farm-to-Farm/House-to-House visit:Rural people prefer face-to-face communication and farm visits facilitate two-way communication. The advantage is that the sales person can understand the needs and wants of the rural customer by directly discussing with him and answer his queries on products and services. Potential customers in the village are identified and the companys/distributors representative makes farm-to-farm visits and highlight the benefits of the products. The person carries with him literature in local language and also samples of products. The person does not sell the product but only promotes the use of the product. Very often the local dealer also joins the representative in making farm-to-farm visits. The dealer clarifies the terms and conditions of sale and also makes independent follow up visits for securing orders. Example: This approach has been found to be very effective for agricultural machinery, animal health products and agricultural inputs. Many LIC agents and companies dealing with high value consumer durables have tried this method with success in rich rural areas. Group meeting:Group meetings of rural customers as well as prospects are an important part of interpersonal media. The company is able to pass on the message regarding benefits of the products to a large number of customers through such meetings. Group meeting of key customers are conducted by banks, agricultural inputs and machinery companies in rural areas. The bankers visit an identified village, get the village people in a common place and explain the various schemes to the villagers. Such meetings could be organized in prosperous villages for promoting consumer durables and two wheelers also. Example: MRF Tyres conduct tractor owners meet in villages to discuss repairs and maintenance of tractors. Field days:These are extension of field demonstrations. One of the main objectives of following modern agricultural practices is to increase the yield. The company organizes demonstrations in a piece of land belonging to progressive farmers. All the fertilizers, pesticides, nutrients etc. are applied after making field observations. Just before harvest, all the important farmers are invited to see demonstration plot and see for themselves how the yields are better in the plot compared to other fields. Field demonstrations/field days consume lot of time and efforts and therefore have to be planned wellFINDINGS AND ANALYSIS

1. Which soap u prefer to use?

The reaction of people towards various SOAP brandsCan be tabulated in the following manner:

BRANDSLUXDETTOLLIFEBUOYOTHERS

PERCENTAGE36182224

In the survey, it could easily be concluded that LUX, the product of HUL was highly in demand. LUX, the product of HUL covers 36%of the market share. After LUX, the other brands (EXCEPT LUX, DETTOL, LIFEBUOY) covers 24%of the market share. This is then followed by LIFEBUOY, the product of HUL with a market share of 22%,which is then followed by DETTOL, the product of RECKITT BENCKISER with a market share of 18%.

This data can be graphically explained with the help of the following bar graph:

2 Which pack u prefer to use?

In order to determine the income pattern of the consumers, it was necessary for the researcher to distribute the consumers on the basis of their demand for the various packs of SOAP brands available in the market. However, the reaction of people towards various packs of SOAP can be tabula