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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