RURAL MARKETING RURAL MARKETING SOME FACTS ABOUT RURAL SECTOR • There are 42,000 rural supermarkets (haats) in India that exceed the total number of retail chain stores in the United States (35,000) • Of the 20 lakh BSNL mobile phone connections, 50 percent are in small towns and villages • Of the six lakh odd villages in the entire country, 5.22 lakh had a Village Public Telephone (VPT) as of March 2004 • The 41 million Kisan Credit Cards (KCC) issued in rural India exceed the 40 million credit-plus-debit cards issued in urban India • Electricity consumption by the agricultural sector has shown a sharp increase from 17.6 percent of total consumption in 1980-81 to 29-2 percent in 1999-2000
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RURAL MARKETINGRURAL MARKETINGSOME FACTS ABOUT
RURAL SECTOR• There are 42,000 rural supermarkets (haats) in India
that exceed the total number of retail chain stores in the United States (35,000)
• Of the 20 lakh BSNL mobile phone connections, 50 percent are in small towns and villages
• Of the six lakh odd villages in the entire country, 5.22 lakh had a Village Public Telephone (VPT) as of March 2004
• The 41 million Kisan Credit Cards (KCC) issued in rural India exceed the 40 million credit-plus-debit cards issued in urban India
• Electricity consumption by the agricultural sector has shown a sharp increase from 17.6 percent of total consumption in 1980-81 to 29-2 percent in 1999-2000
• In 2001-02, the Life Insurance Corporation (LIC) sold 55percent of its policies in rural India
DEFINING RURALINDIA
• The Census of India defines rural as:
• Any habitation with a population density of less than 400 per sq.km., where at least 75 percent of the male working population is engaged in agriculture and where there exists no municipality or board
• According to the National Commission on Agriculture:
• Rural marketing is a process which starts with a decision toproduce a saleable farm commodity and it involves all the aspects of market structure or system, both functional and institutional, based on technical and economic considerations and includes pre and post harvest operations, assembling, grading, storage, transportation and distribution
• Simply, It referred to marketing of rural products in rural and urban areas and agricultural inputsin rural markets
What is RuralMarketing?
• 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 theflow of goods and services within rural areas
DIFFERENCEBETWEEN URBAN &
RURALDIFFERENCE BETWEEN
URBAN & RURAL
DIFFERENCE BETWEENURBAN & RURAL
The Importance of the RuralMarket
The Importance of the Rural Market
• More than 70% of country’s consumers are in the rural market
• More than half of national income is generated here
• Should All Firms Go Rural?
• For several products there is now enough demand in urban markets
• But firms with huge ambitions have to necessarily tap rural markets
The Rural Marketing Environment It can be studied under 2 heads, the Rural Consumer and the Rural Demand
• The Rural Consumer
• ‘Many Rural Indias’ within ‘Rural India’ and No Such Thing as a ‘Typical Rural Consumer’
Rural Consumer contd…
• Highly stratified
• Age mix
• Region to region and state to state variation in economic position
• Occupation is now ‘beyond agriculture’ for over 1/3rd of the workforce
• Diversification of the rural economy bringsnew income sources
• New income is generated from agriculture as well as other sectors
• Heterogeneity in literacy rate too
• There is a huge literate population in rural India
• There is heterogeneity in the literacy rate
• In lifestyle too, rural consumers do not fall into a single bracket
• The Expectation Revolution• Rising expectations; the aspirations of the
rural people growing ahead of their income
• The Idea of a Stereotype does NotFit
• Heterogeneity gives rise to variations in buyingbehaviour of the consumers
• Size of the Rural Population More than 81 crore consumers; 73% of India’s population is rural
Rural Demand contd..
• In many products, rural consumption accounts for a larger share than urban
MARKETING MIXFOR RURAL MARKETS• Marketing Mix ‘refers’ to the set of
actions, tactics, tools or variables that a company uses to promote and sells itsbrand or product in a markets
• The marketing mix is a crucial elements of any marketing plan as it offers marketers a mix of products, services and prices, utilizes a promotion mix of advertising, sales promotion, direct marketing and personal selling to reach the target customers through distribution channels
• The 4 Ps of the marketing mix remain the same, both in urban and rural markets. However, marketers need to meet the challenges of availability, affordability, acceptability and awareness (4 As) of products and services that are peculiar to rural markets
The 4 Ps of Marketing:A re-look from therural perspective
• The basic marketing-mix tools remain the same both in rural and urban markets, but it is thechallenges of the 4 As that compel the marketer to revisit the marketing tools when he ventures into rural markets
Availability • Total 6,38,000 villages in India;
742 million Indians live in rural areas
• HUL : strong distribution system to reach the interiors of the ruralmarket
• Coca-Cola : evolved a hub-and-spoke distribution model to reach villages
• LG has set up 45 area offices and 59 rural / remote area offices
Affordability • Low disposable income, daily wage
earners attract small unit packs.
• Godrej : introduced three brands of Cinthol, Fair Glow & Godrej in 50-gm. packs, priced at Rs 4-5 forMP, Bihar & UP—the so-called BIMARI states
• HUL : launched soap brand Lifebuoy, at Rs. 2 for 50gm.
• Coca-Cola : Introduced 200-ml glass bottle at Rs. 5. The Sunfill, apowered soft-drink concentrate, sachet of 25gm priced at Rs. 2
Acceptability• The third challenge is to gain
acceptability for the product or service
• LG Electronics : developed customized television christened it Sampoorna. It was a runway hit,selling 1,00,000 sets in the very first year.
• Coca-Cola : provides low-cost ice boxes, that is a tin box for new outlets and a thermocole box for seasonal outlets considering lack of electricity and the absence of refrigerators in rural areas
Awareness • Only 41 percent of rural households
have access to television—building awareness
• HUL : relies heavily on its own company-organized media. These are promotional events organized by stockists
• Godrej Consumer Products : uses radio to reach the local people in their own language
• Coca-Cola : uses combination of television, cinema and radio to reach 53.6 percent of rural households
• LG Electronics : uses vans, local-language advertising and road shows toreach rural customers
• Philips India : uses wall writing and radio advertising
• ICICI BANK customized their ruralATMs, so they can operate biometricauthentication. ICICI rural ATMS arebattery operated so that power failureis not issue.
• BP energy Sell smoke less, biomass runstoves
(Oorja) for rural markets, pricedattractively Rs.675.
• Bank of India introduced Bhumiheencredit cards for providing credit cardfacilities to landless farmers.
• Noika develop affordable Mobilephones for rural markets with uniquefeatures such as local languagecapabilities, present time/ call limitsetc.
• Philip develop a TV ‘ Vardaan’ forrural markets. This TV work onthe voltage 90-270 volts.
• Philips developed ‘ Free Powerradio’ this radio do not requirepower and battery also. it run onsimple winding of level provided inthe set. The price of thisattractive set is Rs. 995.
• LG developed CTV called’ CinePlus’ was launched in rural markets price Rs.5000
Examples of ruralmarketing mix
Hyundai increases focus on RuralIndia
new promotional scheme titled - ‘GharGhar Ki Pehchaan'. In this first of itskind initiative, Hyundai Motor wouldextend special schemes forgovernment employees in rural areasand members of Gram Panchayats onthe purchase of the Hyundai Santro
Launched on May 1, the ‘Ghar Ghar KiPehchaan' scheme will continue till July31, 2008. Through this special ruralscheme Hyundai Motor India plans totouch base with at least 58 per cent ofIndian villages with a population of 500or more.
