Rural Marketing:

Opportunities & Challenges

Rural Economy

An Overview

• Human Development Index- India ranks 136th in 156 countries

• Rural - Urban Disparity per household Income -Urban 2.1times of rural income

Consumption-Urban 1.97 times the rural consumption

Sources of incomePattern of ConsumptionEducation of Head-No formal education to 51% of rural family head, urban- 14%Literacy levelsSocial Indicators

Diagnosis of the Failures

• Low priority to agriculture

• Subsistence orientation of agriculture

• Failure of land reforms

• Inadequate food supplies

Contd..

• Slow growth of infrastructure• Inadequate inputs• Slow down of Rural industrialisation

Rural Face to Reforms

• Pradhanmantri Gramodaya Yojana

• Self Employment Schemes

• Employment Assurance Scheme

• Janashree Bima Yojana

• Rural Infrastructure Development Fund

• Microfinance Development Fund

• National Commission on land use policy

Contd..

• National Movement of watershed development• Comprehensive agriculture development

program• Rural Housing• Farm credit• Rural Industries• Encouraging Corporate citizenship• Digital revolution

Towards Cyber Rural India

• Govt. Initiatives• Corporate innovations• IT solutions for

efficiency• e-chaupal• New life with net

Rural Marketing

Evolution of Rural Marketing

• Phase 1 (Before mid 1960s):Marketing of rural products in rural and urban areas and agricultural inputs in rural markets. Synonymous to Agricultural Marketing

Consumables :fertilizers, seeds & pesticidesDurables: Tractors, harvesters, threshers,

power tillers, pump sets, oil engines & electric motors

Contd..

• Phase 2 (Mid 1960s to Mid 1990s): Change of rural scenario due to Green Revolution.

• Demand for agricultural inputs went up. • Scientific farming practices.• Formation of agencies like Khadi & Village

Industries commission• Handicrafts, handloom textiles, soaps, safety

matches , crackers etc. hit the urban market

Contd..

• Phase 3(after 1990s)• An all round socio-

economic progress• Rural market starts

growing for household consumables & durables

• Development programs from Central & State govts. , service organisations & socially responsible business grps.

A New Definition

• A function which manages all those activities involved in assessing , stimulating , and converting the purchasing power into an effective demand for specific products & services and moving them to the rural areas to create satisfaction and a standard of living to them and thereby achieves the goals of the organisation

Nature of Rural Marketing

• Rural Marketing is more developmental than transactional . HLL’s Project Shakti

• Both a catalyst as well as an outcome of the general rural development process

• Initiation & management of social and economic change is the core of rural marketing process

• Innovative methods of social change for successful transformation of traditional society are vital

Attractiveness of Rural Market

• Large population

• Raising prosperity

• Growth in consumption

• Life-style changes

• Market growth rates higher than urban

• Rural marketing is not expensive

• Remoteness is no longer a problem

Rural V/s Urban Marketing

Rural V/s Urban Marketing

• Trickle down approach• Undifferentiated approach• Differentiated approach• Market differences

-Environment-Social Relations-Low exposure to market stimuli-Dependence on nature-Employment & Income

Contd..

• Marketing differences-Marketers-Philosophy-Marketing Research-Consumer Behavior-Segmentation-Product Strategy-Price Strategy-Distribution-Promotion

The Rural Way

Urban V/s Rural Research & Their Implications

• Respondents

• Time

• Accessibility

• Secondary Data Sources

• Primary Data Sources

• Sampling

• Data Collection

New Research Tools

• A ladder

• Images of Faces

• Colors

-Dark Green: Haryali represents prosperity

-Light Green: Stands next to the green

-Yellow: Represents dry sand

-Red: Represents danger

Segmentation

Bases of Segmentation

• Geographic Segmentation

-Zones

-States, Districts & Villages

-Density

-Climate: Tropical, rainy & cold

-Culture: 56 Socio-cultural regions (O & M)

Demographic Segmentation

• Age• Life cycle• Gender• Marital Status• Family Size• Income• Occupation• Religion• Education

Psychographic Segmentation

• Social Class

• Life Style

Trend setters

Chameleons

Traditionalists

• Personality

Behavioral Segmentation

• Occasions

• Benefits sought

• User status

• Usage rate

• Loyalty status

• Place

STRATEGIES

Rural Product Strategies

Identity Strategies

• Commodity Strategies

• Branding Strategies

Customer Value Strategies

• Mass Product Strategies

• Premium Product Strategies

Innovation Strategies

• Special for Rural

Quality Strategies

• Quality Improvement Strategy

• Spurious Goods Strategy

-Lifebuoy: Lovebuoy, Litebuoy

-Fair & Lovely: Fair & Lonely

-Tata: Teta

Packaging Strategy

• Small Packages

• Combi Packs

• Seethrough Packs

Pricing Strategies

Pricing Methods

• Psychological Pricing – End in an odd number

• Value Pricing-Setting prices lower than competitors through business process reengineering , supply chain management, human development and quality management

Contd..

• Pricing for Price – Conscious

-Small unit low pricing

-Promotional Pricing

LG patakha guomao inaam pao

Samsung Rub ka Kamaal

Pricing and Government

• Lowering Taxes

• Retention Pricing: In case of fertilizers

The difference between retention price and actual selling price is paid as subsidy by the government

Pricing and Competition

• Selling at higher prices

• Selling at Low price

-Reduce price of the premium offer

Rin & Ariel in Sachets

-Launch a low priced version

Contd..

• Maintaining Prices: When market is not price but also value conscious

-Increase the amount of product

-Offer improved product at the same price

-Improve the package design for the same price

Promotional Strategies

1.EXPLORING MEDIA

• Mass Media

-Radio

-Cinema

-Press

-TV

Contd..

• Local Media-Haats, Melas , Fairs-Wall Paintings -Hoardings-Leaflets-Video vans-Folk Media-Animal Parade-Transit Media

Contd..

• Personalized Media

-Direct Communication

-Dealers

-Sales Persons

-Researchers

PROFILING TARGET AUDIENCE

• Social Classes and Intentions• Consumer receptivity• Growing Brand consciousness• Life styles• Buying Roles• Purchase needs• Community and Personal Value

prepositions

DESIGNING RIGHT PROMOTION STRATEGY

• Communication objectives

• Message content- Rational , emotional and Moral. A stimuli for rural person

• Message Structure – Pictorial presentations are better than verbal descriptions

• Message source-Expertise, Trustworthiness & Likability

Contd..

• Selecting the channel

-Personal Channel

Distribute products for interaction

Create opinion leaders

Advertising with interactivity

-Non personal channels

•Deciding on promotion mix

Distribution Strategy

The Old Set Up

• Wholesalers• Retailers• Vans• Weekly haats,

bazaars, Shandies• Melas & Fairs

The New Players

• Unofficial Channels

• Cooperative Societies

• Public Distribution System

• Agricultural Input Dealers

• NGOs

• Barefoot Salesmen

• Syndicated distribution

New Approaches

• Value seeking behavior

• Relationship marketing

Tata,HLL,Colgate • Internet marketing

e-chaupal