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Acknowledgement

I heartily wish to extend heartfelt appreciation and gratitude to numerous Mentors,

benefactors, and constituents who have collectively endowed the Wherewithal, faith and

encouragement for me to navigate and complete my Project journey.

To Professor Kamlesh Mishra, my primary advisor and unflagging advocate, who mustered

devoted, continuing, innovative and adaptive mentorship to impel and shepherd my checked

efforts through diverse and abounding challenges, I extend my deep and abiding respect and

many, many thanks.

To Dr. Rohit Singh, my supporting advisor, who gently and patiently endured my academic

tardiness, I offer commensurate veneration.

Rega rds By ,

Sagar Arora.

Nishit Deora.

Gaurav Dhingra.

Shubham Tekriwal.

Contents

IMPACT OF MARKETING STRATEGIES ON INDIAN RURAL MARKET............................2

INTRODUCTION:..........................................................................................................................2

WHAT IS RURAL?.....................................................................................................................3

WHAT IS RURAL MARKETING?............................................................................................3

UNDERSTANDING RURAL CONSUMERS...............................................................................4

SEGMENTING RURAL MARKETS.........................................................................................5

CHALLENGES OF RURAL MARKETING:................................................................................7

MARKETING MIX FOR RURAL MARKETS.............................................................................8

Different rural marketing strategies in India................................................................................8

HOW GOOD ARE THESE STRATEGIES IN RURAL MARKETING:....................................12

CONCLUSION:............................................................................................................................14

IMPACT OF MARKETING STRATEGIES ON INDIAN RURAL

MARKET

INTRODUCTION:

The rural markets are estimated to be growing fastly compared to the urban markets.  The

potentiality of rural markets is said to be like a 'woken up sleeping giant'.  These facts are

substantiated in a study of market growth conducted by various researches. In recent years, rural

markets have acquired significance in country like India. On account of the green revolution in

India, the rural areas are consuming a large quantity of industrial and urban manufactured

products.

The Indian rural market is very vast in size and in demand base. It offers great

opportunities to marketers. About 742 million of countries consumers live in rural areas and

almost half of the national income are generated here. Rural markets form an important part of

the total market of India. In India approximately there are 6, 30,000 villages, which can be listed

in different parameters such as literacy levels, income levels, penetration, distances etc. The rural

market is not homogeneous. There are differences in Geographical, demographical, statistical

and logistical levels. The specific sections of rural market are not too big, although the overall

size is large. The rural consumer is growing and this is an opportunity to capture the market

share for all the players in the market. Positioning and realities regarding the potential of each of

these market segments differ and lie at the very core of forming the strategy for the rural

markets.

WHAT IS RURAL?

According to the census of India village with clear surveyed boundaries not having a

municipality, corporation or board, with density of population not more than 400sq.km and with

at least 75 per cent of the male working population engaged in agriculture and allied activities

would quality as rural. According to this definition, there are 6.38,000 villages in the country. Of

these, only 0.5 cent has a population above 10,000 and 2 per cent have population between 5,000

and 10,000. Around 50 per cent has a population less than 200.

WHAT IS RURAL MARKETING?

Rural marketing is a function that manages all activities involved in assessing,

stimulating and converting the purchasing power of rural consumers into an effective demand for

specific products and services to the people in rural areas to create satisfaction and a better

standard of living. In other words, Rural marketing is a process of developing, pricing,

promoting, distributing rural specific goods and services leading to exchanges between urban

and rural markets, which satisfies consumer demand and also achieves organizational objectives.

Thus, rural marketing is a two-way marketing process that includes the flow of goods and

services from rural to urban areas and the flow of goods and services from urban to rural areas,

as well as the flow of goods and services within rural areas.

UNDERSTANDING RURAL CONSUMERS

A complex set of factors influence rural consumers behaviour. Social norms, traditions,

caste and social customs have greater influence in consumer behaviour in rural areas than in

urban areas. The seasonality of agricultural production influences the seasonality of rural

consumers demand. Given the fact that the landless laborers and daily wage earners receive their

income in installments, their purchasing is restricted to small quantities of products at a time,

mostly on a daily basis or once in two or three days.

Purchase decision process and presences also show certain characteristics that are quite

significant implications. Exhibitions and road shows act as some of the key triggers for

information search behaviour. Opinion leaders and people who are perceived to be

knowledgeable play an important role as information providers and advisors.

Word of mouth has more significance in the purchase decisions of rural consumers. As

the perceived risk of buying tends to be higher, rural consumers exhibit a greater involvement in

the purchasing process. Leading to a more detailed information search behaviour. Family

members, relatives and friends are consulted before making purchase decisions by rural

consumers. Since the reach of electronic media and other mass advertising is low in rural areas,

dependence on information, advice and suggestions from other people are higher.

SEGMENTING RURAL MARKETS

Segmenting is the process of dividing a heterogeneous market into several sub-markets, each of

which tends to be homogenous in a significant ways. Following are some predominant factors

which necessitate the segmentation of rural markets.

Heterogeneity in rural markets.

Socio-cultural differences across regions

Variation in population size and population density of village

Differences in levels of infrastructural development

Media exposure levels

Variation in literacy levels

Differences in income levels and patterns of income flow

Family structure

Rural markets can be segmented using multiple dimensions such as geographic,

demographic, psychographic and behavioural basis. One useful segmentation scheme for rural

market is the socio-economic classification using the occupation of the chief wage-earner and the

type house that they live.

Common basis for segmentation

Geographic

Region; east, west, north, south

Density: low, moderate, high

Climate: summer. Rainy, winter

Demographic

Age and life cycle

Family structure

Gender

Education

Occupation

Religion

Caste

Psychographic

Social class

Lifestyle

Personality

Behavioural

User status

Loyalty status

Place of purchase

Benefits sought

Usage rate.

CHALLENGES OF RURAL MARKETING:

A marketer trying to market his product or service in the rural areas is faced by many challenges;

the first is posed by the geographic spread and low population density in the villages in the

country. The second challenge is from the low purchasing power and limited disposable incomes

in these parts of the country. The third challenge is from 4A’s of rural market i.e., Availability,

Affordability, Awareness and Acceptability.

Availability is about making the product reach the consumers and it is the biggest challenge

to be face while formulating the strategies for rural markets. It has been acknowledged by

many that distribution systems are the most critical component and a barrier which needs to be

overcome for success in marketing in rural areas.

Affordability is to ensure affordability of the products and services. With low disposable

incomes, products need to be affordable to rural consumers, most of whom are daily wage-

earners.

Acceptability would include issues needed to be addressed to improve the willingness to

consume, distribute or sell a product. It would also include how the product or service could

be made more acceptable to the rural consumers.

Awareness is the issues of promotion in rural areas. The promotional activities needs to be

adapted to the village environment; the language and means of communication used should

be in the local language.

MARKETING MIX FOR RURAL MARKETS

In order to utilize the immense potential in rural markets companies need to develop specific

marketing mix and action plans, taking into consideration the complex set of factors that

influence consumer behaviour. Innovative companies which adopted an integrated approach

have succeeded in utilizing marketing opportunities that rural areas offer.

Different rural marketing strategies in India

1. Competitive strategy

1.1. Supplier: The company not only has to make high quality products but also has to sell

them cheap. This can be achieved only if the company has good supplier who can

provide good quality material or ingredients at very low price otherwise the company

has to go for backward integration to achieve the economies which determine success in

the rural market.

1.2. Substitute products: Due to high level of illiteracy, low awareness and dependence on

retailers in rural area, counterfeiting is prevalent and substitutes flourish. Very different

substitutes of products and brands exist in the rural areas. Like Nimbu Pani is a

competitor to Coke and Pepsi in the rural. Freely available ash is competitor for Vim

(vessel cleaning products).

2. Product Strategy

2.1. Marketers have never felt a strong need to exclusively design product or even to modify

the design of a product for the rural market. Needs of rural consumer is different from

urban. Marketers have to design or modify their product according to variables of rural

market. For example:

a) Escort was the first organization to position its motor cycle “Rajdoot” as one that

could cope with the rugged terrain of rural India “Jandaar Sawari Shandar Sawari”

which was successful in the market.

b) Bajaj M80 released by Bajaj automobiles, was advertised showing its features and

usage particularly in rural areas, so this product was successful only in the rural

market.

2.2. Understanding of valued product: Value consciousness is big driver for the rural

market, consumers are extremely aware of equation of price, quality and image. For

example:

a) Britania came with the concept of “Eat healthy think better, Swast khao tan man

jagao ” it stood for healthy food for health conscious Indian consumer.

b) Samsung Communication Corporation sells low price colour TV to attract rural

market.

c) Videocon launched “Washer” washing machine without dryer at Rs.3000

specifically in rural market and it had 100% growth in 3 years

2.3. Packaging: The size of the pack helps the rural consumer to pick the product at the price

they can afford. The affordability, storability, display ability, availability along with the

usage are the reasons for rural consumers to look for small packs. For example:

a) Sachet revolution

b) Home delivery packaging

c) Color strategy(Green)

d) Small package(50gm soaps along with 100gms)

3. Emotional identity: Emotional identity is a concept that differentiates a corporate in a

market. The marketers are trying to connect to inner core of rural mind by emotional

attachments like “Desh ki Dhadkan” by Hero Honda, “Definitely male” by Bajaj Pulsar,

“Desh ki namak khaaya huh” by Tata Salt.

4. Logos and Symbol: The rural markets respond in different ways to different symbols than

the urban consumer. For example:

a) The sun symbolizes life (Birla Groups)

b) 555 soap

c) Tortoise mosquito coils

d) Sun flower symbol for Wipro products

e) Connecting People and Connecting India by Nokia.

5. Pricing Strategy: Companies should not only price their products competitively, but also

offer their rural prospects the maximum value for money spent. Companies must follow the

strategy of penetration rising with the backup of good quality products to be successful in the

rural market. For example:

a) Rs.5 price point by some marketers like Coke’s success in promoting the Paanch

strategy.

b) Broke Bond pack was available earlier in 5paise later 10paise,25paise and with inflation it

became Re.1, now it is the time of Rs.5 pack.

c) HLL introduced Rs.5 Ponds Talc, cold cream, Rin, Fair n Lovely and Lux.

6. Communication Strategy:

6.1. By proper communication in regional languages. Association themselves with Indian

celebrities like Ex:

a) Manipuram gold designed advertisement by the brand ambassadors like Cine Stars

Puneeth Rajakumar in Karnataka, Akshay Kumar in North India.

b) Thumps Up designed ad. With Akshay Kumar in North India and Cheeranjivi in

South India.

c) A rural campaign for the radio advertisement for rural Tamil Nadu, they developed

punch line “Enga veetu super star”(The super star of my home) based on Tamil

superstar Rajnikanth.

Same campaign developed for Andhra Pradesh punch line was “Maa inty Mega

star”(The mega star of my home) based on Cheeranjivi.

6.2. Outdoor Media options: like wall paintings, video vans are also attractive method of

communicating in rural areas.

HOW GOOD ARE THESE STRATEGIES IN RURAL MARKETING:

In the view of challenges and opportunities offered by the rural markets it can be said that the

strategies adopted so for by the marketers (except few such as HLL, Marico, Colgate-Palmolive

etc.) were not satisfactory. Marketers need to understand the social dynamics and attitude

variations within the rural markets. rural markets needs to be tempered because of the

complexity of these markets and the scale of investment required to achieve good penetration.

The future is very promising for those who can understand the dynamics of rural markets and

exploit them to their best advantage. A radical change in attitudes of marketers towards the

vibrant and burgeoning rural markets is necessary. The companies have to ascertain rural

consumers’ needs and desires in order to exploit vast potentials of rural markets with suitable

marketing strategies. However, the rural markets are broadly scattered and heterogeneous; there

are insufficient rural transportation, inefficient communication and inadequate warehousing

facilities which have been hindering the growth of companies in the rural markets. Companies

have to formulate the strategies to cater to the rural markets by taking in to account the following

suggestions.

While marketing to the rural consumer, it is important that the positioning of the goods have

to connect with the rural consumers’ social status appreciation. It give them psychological

satisfaction and motivate them to continue with the same brand.

Marketing through multi-level marketing channels, kitty parties, social gathering and etc.,

where people within the same rural community can be encouraged as the influence to make a

purchase through the opinions of friend and peer group is more in rural consumers.

Efforts should be made to increase the distribution network ( retail outlets) and make

available the products to the rural market.

In addition, efforts should be made to sue the distribution channels more effectively to reach

in the deeper pockets of the rural market. Thus availability of the products is very important

as rural consumers are not loyal to one brand.

Promotional strategies should be according to the age group factor of buying decision in rural

market. As the factor of influence are different in different age groups.

While planning for rural market company should plan considering the factor of buying

decision like, lifestyle, buying capacity and buyers preferences etc. as they try different

products as suggested by the peers, neighbour and others.

RESEARCH METHADOLOGY

Research is a planned enquiry that utilizes acceptable scientific methodology to solve problems

and create new knowledge that is generally applicable and informational. Scientific methods

consist of systematic observation, classification, analysis and interpretation of data on the basis

of data collected. Research is a process of collecting, analyzing and interpreting information to

answer questions which are either predefined or assumed before the research is conducted. But to

qualify as research, the process must have certain characteristics: it must be in a long field where

multiple variable are covered, unbiased, systematic, valid and verifiable. The collected data and

result should be critical and pin-pointing.

Research can be classified from three perspectives:

1. Application of research study

2. Objectives in undertaking the research

3. Inquiry mode employed

Application: In application, there are two categories based on research i.e. pure research and

applied research. In our survey, the point of view of application that we have selected is applied

research.

Main Objectives: From the point of view of objectives, a research can be classified as

descriptive, correlational, observational, explanatory, and exploratory. In the survey, from the

point of view of objectives we have selected observational objective.

Inquiry Mode: There are mainly two approaches to answer the researched questionsStructured

approach & Unstructured approach. In the survey, from the point of view of inquiry mode we

have selected Structured Approach.

Sampling Frame:khad-chitra, Navsari-Bardoli highway, Gujarat. Sampling Size: 73

Time and place: this study has been done in the month of April. This survey was taken in the

Khad-chitra which is 42km far from the Surat city.

Methods of study

1. Primary Method:Data observed or collected directly from first-hand experience. This method

has been conducted with a questionnaire.

2. Secondary Method:Published data and the data collected in the past or other parties are called

secondary data. People can use these data through books, journals etc.

We have taken the primary method of data collection as the survey has been conducted in the

village to know the preferences and willingness of the people to spend on the mobile phones.

This survey has been conducted to know the life style of the people in the village.

SURVEY ANALYSIS

OCCUPATION

INCOME GROUP

COMPANIES PEOPLE ARE USING

FACITIES NEED IN MOBILE PHONES

BUYING FREQUENCY OF MOBILE ONCE

WILLINGNESS TO SPEND ON MOBILE PHONES

OBSERVATION

CONCLUSION:

Rural consumers are fundamentally different from their urban counterparts. The lower

levels of literacy and limited exposure to product and services and there are also differences in

occupation options, with a direct impact on income levels and income flows, and a high level of

inter-dependency affecting the dynamics of rural community behavior. Thus, it requires a well-

crafted plan to meet these challenges in rural markets. So we can conclude that Rural markets

has its own set of challenges, problems and opportunities. Hence the companies need to unlearn

and then relearn the marketing strategies and tactics that would enable harnessing the immense

rural potential. The approach, strategies and marketing mix need to be formulated and examined

from rural consumer’s prospective to be successful in the rural market.