Market Segmentation

• Rural• Urban

Segmentation

RuralUrban

Marketing To Rural Area

Facts About Rural Market• 70% of Indian Population lives in Rural India.

• Mostly depend on Agriculture.

• Largely Illiterate.

• Earn as low as Rs.80 Per day.

• Live with minimum infrastructures.

• Language changes per few kms.

• Villages are sparsely populated and sparsely located.

Why We Need To Target Rural Market• 647 Million population largely uncovered.• 72% population contributes to half of India’s GDP’s.• Approximate size of Rural Market 123000 Crores.• Rural India has seen growth in income due to rise in agriculture

prices.• Less exposure to various brands so less competition.• Between 2009 and 2012, spending in rural India reached US$69

billion, significantly higher than the US$55 billion spent by urban populations.

• Government Initiatives like Bharat nirman, NREGA and Loan waivers have made Rural Indian approachable and very marketable.

Bharat Nirman is an business plan for creating and augmenting basic rural infrastructure.National Rural Employment Guarantee Act (MGNREGA)that aims to guarantee the 'right to work' and ensure livelihood.

WEAKNESS

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

OPPORTUNITIES

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

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

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

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

THREATS

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

REAPING BENEFITS

Maruti plans to drive into one lakh villages by March

• "We have been giving emphasis on rural markets. Last year, we had covered 44,000 villages and till November this year, we have presence in 60,000 villages and by March next year, we will have presence in one lakh out of a total of 6.51 lakh villages in India"

R. C. BhargavaChairman

Maruti Suzuki India

Source:http://businesstoday.intoday.in/story/maruti-eyeing-presence-in-one-lakh-villages-by-march/1/201756.html

REAPING BENEFITS

Tap rural market as rural market is still growing at 10-14% whereas the urban markets are either marginally de-growing

or are flat.

• Is aggressively targeting rural areas and plans to launch Smartphones and its flagship flat-panel television sets in these markets for the festive season.

• Expects consumers in rural India will upgrade their purchases.

• Rural markets are growing 7-8% more than urban markets for LG India and account for 15-18% of overall sales.

Source:http://articles.economictimes.indiatimes.com/2013-08-23/news/41440802_1_maruti-suzuki-india-honda-motorcycle-scooter-india-india-inc

AIRTEL• Has started an interactive,

recorded voice service to provide agriculture-related information.

• A lot of customers in these markets will experience Internet for the first time over a mobile device, and services like m-commerce could be a game-changer.

• Top three telecom companies said nearly 70% of the firm's current capital investment is going into rural areas.

Source:http://articles.economictimes.indiatimes.com/2013-08-23/news/41440802_1_maruti-suzuki-india-honda-motorcycle-scooter-india-india-inc

Bharti Airtel has huge plan for rural marketing.

REAPING BENEFITS

TATA MOTORS

• Helped sell 1,500 more small commercial vehicles per month in six states, and crossed 2,000 units in Nov 2013.

• Required lower investment and less lead time to activate the network, and deeper reach than the traditional outlets.

Source: http://www.tata.com/article.aspx?artid=MVtS880UKKU=

Tata Motors launched its rural initiative Project “NEEV” in 2010, focusing on rural areas with a population of less than 50,000.

Sales through NEEV account for 8 per cent of the company’s national sales volume of small CVs.

REAPING BENEFITS

YAMAHA• Announced that India will be its

biggest market by 2016. • Plans to strengthen presence in

Tier- III cities.• Yamaha Crux, well accepted

product.• Installed annual capacity of 6

Lakh units at its 2 manufacturing units at Surajpur in UP and Faridabad in Haryana.

• Plans to further strengthen production to 1 million units by this year.

Source: http://newindianexpress.com/business/news/Yamaha-keen-on-tapping-rural-markets-in-India-for-larger-sales/2013/05/28/article1608958.ecehttp://articles.economictimes.indiatimes.com/2011-09-18/news/30172114_1_rural-markets-market-share-premium-segment

Tap rural market by launching more models at affordable price.

REAPING BENEFITS

• Only 15 % of their income comes from semi urban and rural areas even though 56% distribution outlets are there.

• Provides occupational training, financial literacy, credit counselling, livelihood finance and market linkages to women under the Bank's Sustainable Livelihood Initiative (SLI) programme .

• the bank is providing loans in the range of Rs 12,000-15,000 per year with an interest rate of 20-25 per cent to the women under the SLI.

• The SLI outreach of the bank is about 7,000 villages across 24 states in the country.

Source:http://timesofindia.indiatimes.com/business/india-business/HDFC-Bank-aims-to-grow-share-of-rural-business-to-50-in-five-years/articleshow/23531052.cms

HDFC Bank aims to grow share of rural business to 50% in five years.

The bank is targeting to generate a business of about Rs 800 crore from this initiative in about three to five years

Committed to making one crore women economically independent.

REAPING BENEFITS

• Increase the number of outlets in rural areas from 270 to 350 and dealerships from 373 to 385 across India by December 2013.

• The number of service centres would be increased from 950 to 1000 in the next four months after the launch of Grand i10.

• The company’s rural sales had increased from 15% two years ago to 19% in the first 8 months of 2013.

• Depreciation of the Indian currency presented an opportunity to increase exports.

Source: http://businesstoday.intoday.in/story/cracking-the-rural-market-organised-retail-chains/1/196804.html

Hyundai to add dealers, more focus on rural India

REAPING BENEFITS

• Lighting segment has expected growth of 18-20 % for the year and for consumer durable in spite of the slowdown, expected growth 20-22 percent growth.

• Against Rs 3,400 crore growth last year, expected growth for this year is more than Rs 4,200 crore.

• Fans business have improved but the project business which saw a major hit in the last one and a half years, is now coming back in place.

Source:http://www.moneycontrol.com/news/business/see-no-price-hikefy14bajaj-electricals_955649.html

Rural region has not seen slowdown because of good monsoons and this being election year the farmers have the minimum support prices. In fact there has been demand for their products like irons, mixers, toasters, fans etc, from rural areas.

REAPING BENEFITS

RURAL INDIAIts waiting to be explored

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