Chapter-V

STRATEGIES OF RURAL MARKETING

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STRATEGY OF RURAL MARKETINGAccording to the 2001 census, the rural population in India stood at 74.6

crores. A recent study conducted by the National Council for applied Economic

Research (NACER) shows the rise in the rural income, which shows that the low

income class (earning Rs. 25000 P.A. and below) would come down from more

than 60% in 1994-95 to 20% by 2006-07. This positive trend means a huge

potential for many of the companies that have already reached a saturation point

in the highly competitive urban market. The future for marketers, thus, lies in

developing and implementing effective strategies for penetration (reach) resulting

in volumes (demand and Consumption) with or without the usual incentives from

the government Designing and execution of an effective marketing strategy to tap

rural markets, is an essential means of attaining certain basic objectives such as

alleviation of poverty, generation of employment, eradication of illiteracy,

provision of rural health care, housing food etc. in rural areas. A rural marketing

strategy, therefore is the key to bring about balanced rural development in

developing countries. Indian agricultural industry has been growing at a

tremendous pace in the last few decades. The rural areas are consuming a large number of industrial and urban manufactured products.1

In recent years, rural markets have acquired significance as the overall

growth of the economy has resulted in a substantial increase in the purchasing

power of rural communities. On account of green revolution, the rural areas are

consuming a large quantity of industrial and urban manufactured products. Rising

agricultural income, greater media exposure, increased exposure to goods and

services, increased literacy rate, better infrastructure, greater electricity, increased

penetration of satellite and television in semi-urban areas and towns, exposure of

large number of villagers to urban life are few of the major contributing factors,

which have helped create a latent demand for goods and services.

Rural markets, as part of any economy, have untapped potential. There are

several difficulties confronting the effort to fully explore rural market in the area

of market, product design and positioning, pricing, distribution and promotion.

Companies need to understand rural marketing in a broader manner not only to

survive and grow in their business, but also a means to the development of the

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rural economy Any strategy in rural marketing should be given due attention and

importance by understanding the product usages, all elements of marketing mix

can be better organised and managed.

Dynamics of rural markets differ from other market types, and similarly,

rural marketing strategies are also significantly different from the marketing

strategies aimed at an urban or Industrial consumer. Marketers need to understand

the psyche of the rural consumers and then act accordingly. Earlier, a child bom

in a farmer’s family would die as a farmer. But times have changed now. Children

going to the city for education are bringing back with them new hopes,

aspirations, and demands. The changing scenario clearly necessitates an overhaul

of the marketing strategy for marketers wanting to benefit from rising rural

consumerism. Rural marketing has neither been fully understood nor explored. In

the past companies had customized their products to suit the rural markets, but

now they are targeting the rural markets with specific models like project shakti

and operation Bharat by HLL, and e-choupal by ITC. The success of marketers

today, therefore, lies within the greater availability, affordability and

acceptability of their product and services. Rural marketing has become a key

area of focus for the corporate sector off late due to the vast potential it has,

mainly in terms of marketing of consumer durables and non-durables.

Rural markets are considered to pay dividends in the long run. Reaching to

rural consumers is a time consuming and expensive process. For this, marketers

are required to build marketing strategy to tap rural markets. The purpose of this

chapter is to identify the potentiality of rural markets and formulate a strategy to

tap such potential in consumer goods in rural areas. Before formulating and

implementing a rural marketing strategy, it is necessary for a marketer to :

i. Identify the most profitable rural customer and market,

ii. determine how to reach those customers and markets more effectively,

and

iii. how to retain those customers and develop links with rural markets.

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The Rural Marketing Strategy has to Focus on These Issues :

a) Identification of Rural Market Potentials

The potential of a market depends mainly on the purchasing power of the

customers which, in turn, is affected by the stage of economic development of the

district they live in. The immediate concern of the marketers is to the focus only

on those areas where the market potential is more. The potential of those areas

can be calculated by considering some rural economic indicators, such as : Gross

cropped area, Gross irrigated area, Area under non food crops, Average size of

land holdings, Use of agricultural inputs like tractors, fertilizers pump-set and tube wells, rural electrification, rural credits and deposits.2

b) Consumer Research :

The relevance of consumer behavior to the profession of marketing is

fundamental one. In the competitive economic system, the success of the

individual business unit depends on accurate knowledge of its customer. No

doubt, we can draw some general hypothesis about rural consumers, like: In view

of high potential and problems associated with rural marketing, the marketers

should design proper rural marketing strategies in relation to the products,

promotions, prices and distribution for exploiting the marketing potentiality in

rural areas.

Seasonality and harvestability are the most important influential variables

that determine the consumer behaviour in the rural market. Another hypothesis

may be that rural buyers are not very discriminating; once they are motivated to

buy a particular brand, they develop a strong affinity for it and if satisfied,

become brand loyal. Another view is that the rural consumers generally avoid

marketers hard selling techniques. Rural consumers should be considered

different from their urban counterparts, especially in the context of the

environment in which they operate. After analysing rural consumer attitudes and

behaviors, the marketers should then direct their efforts towards satisfying this

group.

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c) Position of Existing Products

The goods and serv ices currently used by consumers in rural area and the

direction of their flow is the next information required for a marketer. This would

help a marketer to position his product in the market. What is required is to first

identify the requirement of the rural consumer and then translate these needs into

acceptable products. The manufacturers can solve this problem by making

suitable variations in the types of the product and packaging suitable to different

rural marketing segment, but product design should be harmonized with the rural

condition. For example, most of the villages are still without regular supplies of

electricity. Therefore, manufactures would do well to introduce battery based

transistors television sets, tape recorders etc. in a big way. This would not deprive

the villagers of entertainment and would give them a feeling of receiving the

return of their money. Products for the rural markets will have to be simpler, easy

to use, serviced or maintained. The product literature has to be simple and well

illustrated for the rural customer to understand easily. Further, the product should

be dispensable in single units. For example, a typical rural buyer buys one unit of

match box rural smoker may either buy a packet of bidi or just a single cigarette

stick. Sachet packaging is one alternative which has been successfully used by

tea, shampoo, toothpaste, pan masala and even tomato ketchup manufacturers to

penetrate rural markets.

Economic and income realities of the market should be considered while

developing the product strategy for the rural market. In addition, socio-cultural

realities should also be considered. By and large, the rural market can be tapped

better through different products, models, different brands different packaging

and different positioning. Any marketer, who wishes to sell his product in rural

areas, should not only develop product to suit the needs of rural population but

also find new means of distribution and promotion to reach them, as rural

consumers are scattered over a large geographical area. Further, research on the

traditions, habits, taste and psychological make-up of rural consumer is required.

The marketer will need to adapt his marketing mix to suit rural condition

The major elements of marketing mix that need unique handling in rural

marketing, are :

1) Product Strategy

2) Price Strategy

3) Promotion Strategy

4) Placement Strategy

1) Product Strategy :

The first decision to be made in product strategy in the rural context is

whether the product that is sold in the urban market can be supplied to the rural

market as it is, or whether it must be modified. It depends on the situation and on

the nature of the product. Basically, the firm must find out what kind of product is

actually required by the rural consumer and then decide if it should make an

altogether distinct product or adapt the existing product. The product should be

designed in such a way as to suit rural conditions. Some of the following

strategies for rural markets are :

a) New Product Designs : The wants of rural consumers to meet a need

are not necessarily the same as those of urban consumers. These wants are shaped

by a number of factors, including the environment. The rural consumer who buys

a vehicle for meeting his transportation need may want a rugged vehicle rather

than a sleek model. For example : Philips launched “free power Radio” for rural

areas, which does not require batteries or any external source of electricity for

operation. TVS Suzuki launched Max- R, a model suitable for rural areas. R in the

nomenclature indicated “Rugged” and it is very popular, too, in rural areas.

b) Sturdy Products : Sturdiness of a product is an important factor for

rural consumers. The product should be sturdy enough to withstand consumers

sought handling and storage. For example Union Carbide has heavy brass torches

for the rural markets instead of the slick plastic torches. LG electronics have

devised a semi automatic washing machine with double the capacity of their

urban based machines. This is because rural families are primarily joint families

and also because of the dirt factor. A memory back-up has been introduced,

keeping the frequent electricity breakdowns in the rural sector in mind.

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c) Brand name : Now the rural consumers are rapidly becoming brand

conscious. Branding also carries weightage specially when the product is to be

marketed in rural area. Brand is the key to confidence-building among the rural

consumers. Brand identity in rural markets its often created through the visual

logo of the product, the colour of the product or the taste of the product. A brand

should have short, simple name, easy to pronounce, to spell and to remember,

easy to identify and to explain. Many a times rural consumers ask for peeli tikki

or neeli tikki in case of washing soaps. For example : Eveready batteries are

popularly known as “Billy Chaap” identified by the cat and 9 in rural areas.

While brands specifically developed for the rural market and having low

priced variants may work better in many cases, the strategy should be one of

selling value brands, not cheap brands. It also helps to enhance the value of the

offer by giving suitable ‘add-ons’. Rural marketers would do well to add some

value to their products in this fashion if they are keen to secure the loyalty of the

consumers. For example : Arvind Mills entered rural market with its specially

made ruff and Tuff brand. Britannia has ventured into the rural market with tiger

brand biscuits and is gaining market share with this brand. LG targeted its

Sampooma range of television sets for the rural customers and today 35% of sales

come from its rural offices.

d) Packaging : Packaging is another area which deserves serious

attention. Efforts should be made to evolve such types of packaging which suit the

rigorous rural condition and pockets of villagers in Rural areas. Smaller packages

are more popular in rural areas due to low purchasing power and limited funds for

shopping. Most of the companies have successfully launched their products in

small sachet packs such as HLL, Cavinkare. Proctor & Gamble, lipton and Godrej

etc. Says Cavinkare managing director C.K. Ranganathan. “We have adopted

special packaging for the rural market. The price starts at 50 paise for a sachet of

shampoo to Rs. 5 for a fairness cream (for a weeks usage). But most products are

designed for one off use”.

ii) Brand Spectrum in Rural Areas : Brand choices in rural area arc

often limited due to the small market size and the limited investment capacity

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available with the rural retailer. According to an ORG survey of 2002, against six

to nine brands in urban shops, only three brands are available in rural

arcas/Market/shops in each category .

Table 8.1Brands Available in Rural and Urban Shops

Category Per Dealer Average Number of BrandsRural Urban

Tooth paste 3 7Tooth brush 3 6

Biscuits 3 9Hair Oil 3 7

Source : ORG 2002

Table 8.2Largest Rural Brands

Brand Category' Growth (%)Parle-G Biscuits 8.2Lifebuoy Toilet soap 6.4Lux Toilet Soap 5.5Ghari W. Powder 21.5Nirma W. Powder -13.1Figures are year on year growth for Mat July 2004 by Value

Source : A.C. Nielsen Retail Store Audit, Mat July 2004

The growing share of a large number of FMCG brands shows the

dominance of branded products in rural markets. Some of the biggest urban

brands such as Parle-G, Lifebuoy, Active and Lux are also big draws in rural

areas.Table 8.3

Rural Brand Penetration (% of households)

Toilet Soap Washing Powder

Lifebuoy 29 Nirma 36

Rexona 26 Wheel 28

Lux 24 Rin 15

Liril 13 Tide 14

Santoor 8 Arial 7

Source: Through Questionnaire

Table 8.4Brands and Market Share

Brand Market Share (%) Growth (%)

Alpenliebe Candy 17 . 4.8

Tata Salt 11 9.0

Britannia Marie Gold 9 4.5

Britannia Tiger 5 16.9

Source : A.C. Nielsen Retail Store Audit, Mat July 2004, (figures in volume Terms)

c) Launching of Products : The launching of product in the rural areas

has greater significance. In rural areas, 72% population is engaged in agricultural

and allied activities for their livelihood. A farmer gets his income at the time of

two harvests he reaps every year. Therefore, it would be appropriate to launch

product at the time of harvest, particularly in vase of consumer durables. The

posts and telegraph Department of Government of India solicits rural investors for

its various saving instrument at the time of harvest such as Indira Vikas Partra or

Kisan Vikas Patra. So marketers should make a concerted effort to understand the

Indian rural market segment. In the rural areas the population can be divided into

two categories. The first category consists of population engaged in agriculture

and the second category consists of households engaged in other activities such as

govt, job, rural industries like weaving, pot making, leather work etc. This

segmentation implies that the consumer durables and high class textiles, woollens

etc. should be launched at the time of harvest, the expendable goods can be

launched at any time during the year. Some suggested product strategies for rural

marketers are :

• Identity strategy Commodity strategy, Branding strategy

• Innovation strategies Rural Urban common, specially for rural

• Customer value strategy

• Quality strategies

Mass product strategy, premium product strategyQuality improvements strategy

• Packaging strategies Small unit packing, low priced packing

• Brand Strategies Brand extension strategy, Multi- brandstrategy, Brand Image/ Equity Management

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2) Pricing StrategiesIt is believed that rural consumer is less quality and more price conscious

mainly due to his/her relatively lower income level. The marketers will have to

examine methods by which they can make the product more affordable for the

rural consumer. Pricing is an area of paramount significance in the overall rural

marketing strategy. The presence of a very large price sensitive market does not

mean one of the four major elements of the marketing mix is price. Pricing is an

important strategic issue because it is related to product positioning. Furthermore,

pricing strategy affects other marketing mix elements such as product features,

channel decisions and promotion campaigns. Depending on the company’s

business objectives and the influence of internal and external factors, marketers

can follow a particular pricing strategy or a blend of various pricing strategies.

Before strategized pricing for rural area we need to understand rural

income and occupation patterns as these have a direct relationship with pricing decisions.3

Figure 3.1

Rural Occupation Pattern (%)

Agriculture Wage earner salary earner Business

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Figure 3.2

Rural Income Pattern (%)

The absence of rural consumer willing to pay a higher price for certain

products or certain features. Many companies have realized that the rural

customer is price sensitive, but he is willing to pay more if he sees value. Most of

the companies have started thinking about pack sizes and creating new price

points in order to reach out to rural consumers since a significant portion of the

rural population are daily wage workers. In the case of consumers durable, one

way is to work through rural banks and offer hire purchase term to the customer.

Another way is to offer a smaller unit size at lower price. Toilteries are marketed

in rural areas in smaller unit sizes, thus making these products more affordable.

For example, use of shampoo in rural household was non-existent, but

manufactures feel that low unit price can broaden the consumer base and they

came up with sachet pack. The success of sachet packs was due not to

convenience, but to its lower price. Moreover, the village consumers generally

purchase their requirements as and when they need them. A firm may buy the

product from smaller firm and market it in rural markets. This strategy can help a

lot by passing on the benefit of lower costs of a small firm to the customer in the

form of the lower prices. It is essential for the manufacturers to devise a pricing

policy which suits the pockets of villages without making any compromises with

the quality of the product. Kxpansion of hire purchase schemes is one way of

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making the price- sensitive consumers spend, LG, for instance, has started a zero

percent interest scheme, which has helped in the penetration of CTVs, the

company has tied up with financial companies for financing schemes for its

products.Some selected pricing strategies are adopted by marketers in rural areas

are :a) Psychological Pricing

In this method of pricing, prices are fixed in such a way that they have

some kind of psychological influence on the buyers. Another form of

psychological pricing is odd pricing i.e. prices are set at add amounts such

as Rs. 19, Rs. 59, Rs. 99 etc. For example, a price conscious customer may

pay Rs. 299.95 for a pair of shoes by Bata and may not like to buy the

same pair at Rs. 300.

b) Highlights Value, Not Price : Rural consumers look for value more than

its price. Value for money is good source to compete when cost to

customer is comparable. Hero Honda CD 100 motorcycles arc popular in

rural areas as the company highlights more mileage, less maintenance cost

and higher resale. Value for the vehicle marketers may target consumers

according to their unmet needs of price or product features and develop

new markets through unique positioning.

c) Prestige Price : Some customers feel that the quality of the product

depends upon its price. A marketer may fix a higher price of his product

due to which customers may think that the product is better than the

competitive products. Customers may fear that at the low price it cannot

be of good quality product. Generally, p.estige pricing is applied to luxury

goods, where the seller is successful in creating a prestige for his product.

Rural consumers are now willing to dig more deeply into their pockets for

expensive products because of rising aspiration levels and greater degree

of brand awareness among them. “Analysis shows that value growth has

now gone up faster than volume growth in rural areas”.

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d) Avoid Sophisticated Packing : The rural consumers are more interested

in sturdiness and utility of the product than its packaging. It is essential to

avoid sophisticated packaging due to cost aspect. Simple packaging can be

adopted which can bring down the cost as it is adopted by most of the

companies by packing the consumables in tightly sealed polyethylene

sheets instead of tin boxes, which keep the quality and quantity in good

condition.

c) Pricing at Prevailing Prices : The types of pricing is following to stay in

the market because a price above the market price would sharply bring

down sales while a lower price would not significantly increase sales.

Pricing at prevailing prices is resorted to meet competition and price wears

in case of customary pricing.

f) Differential Pricing : Differential pricing strategy should be adopted by

manufacturer in rural areas. For example : XY7. company is producing

1,00,000 units of product and is carting exclusively to urban areas. The

variable cost for unit is Rs. 20/- The total fixed cost is Rs. 50,00,000 and

the manufactured desired of the product per unit would come to Rs. 100.

The producer recovers the entire fixed cost by breaking even at an output

level at 62500 units. Now the company desires to enter the rural market.

It can double the output without affecting the fixed overheads but the

variable selling overheads would increase by Rs. 5/- per unit. If

discriminatory pricing strategy is not followed, it would appear that the

company should charge Rs. 105/- per unit in Rural area to cover up the

additional selling overheads. This is cover up the additional selling

overheads This course would certainly be disastrous and will take away

the potential buyers. However, if the company ignores the fixed cost

factor, it can very well fix the price at Rs. 65 per unit and would still reap

a profit of Rs. 40/- per unit in rural areas against Rs. 30/- per unit in urban.

The villages, too, would be tempted by such offer,

g) Low Price Points : As almost a third of the rural employed are daily

wage earners, they never have sufficient money on any given day to invest

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in large as they have to purchase a variety of daily need items with their

limited earnings. Therefore, companies need introduction low points.

Price packs so that their product is included in the daily basket of

purchases of the wage earner.

HLL sells maximum number of its products (ranging from shampoo to

hair oil) in sachet packs in rural areas. HLL’s pepsodent tooth paste is available in

a sachet for Rs. 4, the target consumers being travelers and the rural population.

J.K. daily launched a dairy whitener in small 50 gm sachets priced at Rs. 6.50

Dairy Top Sachets revolutionized the market and revived the fortunes of the

company. A 50 gm sachet allows a daily wage earner to make 25 cups of tea. The

pack lasts about 10-12 days. That is a mere 13 paise per use.

Price Initiatives in Rural Market: Nestle

Nestle’s rural initiatives have largely been based on price led initiatives.

Brands such as magi noodles and Kitkat Chocolates have been priced at Rs. 5

and a few other candy and chocolate brands are priced at Rs. 2 per unit. These

price points not only help Nestle reach in making inroads into rural markets.

Currently, rural markets accounts for 10 percent of the food major’s revencies.4

h) Product - Bundle Pricing is combining several products and offering the

bundle at a reduced price. Companies vary commonly use this pricing

strategy during period of inflation. It helps to generate sales and attract

consumers in highly competitive markets. It is extensively used during the

festival and marriage seasons by durable goods manufactures to sell

various goods bundled together at reduced prices.

Operation Bharat : Bundle Pricing Strategy : HLL launched a combo

pack comprising a clinic shampoo bottle, a tube each of pepsodent and

Fair & Lovely and pond’s Dream flower talcum for rural areas. HLL

provided hampers at discounted prices Rs. 5, 10, Rs. 15 and Rs. 20 each

in addressing issues of consumers awareness, attitudes and habits. A

consumers in rural areas were exposed to and become familiar with, such

value added, value for money alternatives, HLL hoped that they would

continue to buy the different categories of products separately (One the

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scheme was withdrawn) Overall, the operation generated 70 percent trials.

In each case, dipsticks pre and post the operation suggest a substantial

increase in key parameters like brand awareness, trial during the operation

and repeat purchase subsequently.

i) Special Event Pricing : Companies offer products at special prices

during certain seasons to draw more customers such as air conditions and

refrigerators in summer, room heaters in winter. During Diwali time,

every durable goods company lowers prices to facilitate maximum sales as

salaried people get bonuses and it is considered an auspicious time to

purchase goods. For rural Markets, this of pricing could be offered at

the time of harvest, or the wedding season or during festivals like Diwali,

Dussehra and Holi. Hero Honda ran a van campaign before the harvest

season in rural areas and took bookings against a token deposit of Rs. 500

and gave a watch free in return. At harvest time (Which also coincides

with the wedding season) customers surrendered their booking coupons to

purchase bikes at the discounted rates.

j) Schemes for Retailers : Consumer loyalty to the retailer and the

influence of the retailer on consumer choice suggest the need to examine

the schemes for retailer. For the rural retailer, cash discount, Quantity

discount and free gift schemes prevail. Quantity discount means offering

an extra quantity with the purchase of specified quantity of the product.

This scheme works better compared to the others, as the retailer, is able to

earn more margins out of it cash discount is not very popular in rural India

because most retailers purchases on credit. Companies generally offer

schemes on bulk purchase. These benefit wholesalers, but not small

village retailers who cannot afford to Hock large sums of their limited

money on the purchase of one product category They can purchase only

small quantities of various categories at a time. Therefore, target based

incentives/ bonus schemes are not suitable for them. As small retailers do

not have access to a stockiest, they purchase goods from the wholesaler,

who does not reveal the scheme to them in most cases. The rural retailer

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buys on net prices quoted by the wholesaler. Therefore, scheme details

should be prominently written on the pack itself and should also be

communicated through advertisements in the local media.

Promotion Strategy : Marketing promotion is a management process

through which an organization develops, presents, and evaluates a series of

messages to an identifies audience. The purpose of promotion is to inform,

persuade and influence the prospective customer.

Marketers in rural areas have to decide how to approach the rural

customers and what type of promotional mix adopt to capture the attention of the

rural customer.

Promotion mix is the combination of different kinds of promotional tools

and such as personal selling, advertising, public relations, Publishing and sales

promotion. The list of communication tools are :

Different Communication Tools

Advertising Sales Promotion Publicity Personal Selling

Print Ads Contests Press release Sales Presentation

Radio Ads Gifts Speeches Fairs

TV ads Sampling Seminars Tradeshows

Slides Coupons Annual Reports Melas

Short films Installments scheme Donation Exhibitions

Bill boards Low Interest financing Public Relation Haats

Display signs

Pop Display

Symbols &Logos

The designing of promotions mix is a very challenging job. Promotional

strategy is determined by the product market strategy and overall marketing

strategy. Various combinations types and degrees of personal selling, advertising

and other forms of promotional tools are brought together into a promotional mix

to develop the promotional strategy.

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From a marketing perspective promotion :: "sed to perform three essential

promotional roles, informing, persuading, and reminding target audiences.

To Provide Information : The most useful product will be failure if no

one know about its existence, so that first task of promotion is to inform, the

prospective customer about the availability, characteristics and main use and

alternative uses of particular product. For example when a small Canadian firm

was faced with consumers who could not understand its toy called X Zylo, a

Gyroscopic cylinders that can be thrown 100 yards, and the inventor informed

retailers and consumers about its with demonstrations at fairs, in company parking

lots and on school playing fields.

Persuasion : Another purpose of promotion is persuasion. Intense

competition among firms puts tremendous pressure on the promotional

programme of seller. Promotion helps in differentiating a particular product of the

firm from the competing products of other firms.

Reminded : Consumers must be reminded about a products availability

and its potential to satisfy. Sellers bombers the market place with thousands of

messages every day in hopes of attracting new consumers and establishing

markets for new products. Even an established firm must constantly remind

people about its brand to retain a place in their minds.

To tap the rural market effectively there is need for optimum media mix.

Companies should adopt a proper mix of T.V., Radio, Cinema, Fair or festival.

Rurai Marketers uses both kinds of media traditional as well as modem.

Promotion media Can be classified into there categories :

Promotion Media

Personalized Media Traditional Media or local Media

Modern Media or Mass Media

Dealers, DirectCommunication and sales persons researchers

Puppetry, Drama, Folk, theatre: Tamsha, Haats, Melas, Fairs Street Plays Folk Songs, wallpainting, personalselling, opinion leader

TVRadioCinemaPrint media (News paper, journals, periodicals,literature, booklets etc.

Source : Krishnamacharyulu, G.SC., Rural Marketing : Text and Cases, New Delhi, Replika Press Pvt. Ltd., 2002, p. 240

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As a general rule, rural marketing involves more intensive personal selling

efforts compared to urban marketing. Rural marketing calls for unique

characteristics on the part of salesman. The rural salesman is much more than a

mere order taker. He is the '■Carrier’ of development message to the less informed

rural population. The technique should be appropriately adopted to the needs of

rural markets. Such traits are :a) Willingness to be living in Rural Areas : First of all, only those who

are genuinely happy in living and working in the villages can become good rural

salesman. It is common knowledge that the rural areas lack modem amenities

compared with the urban areas. Due to this factor, well qualified and trained sales

man are often reluctant to live in rural areas. To circumvent this problem, many

firms locate their salesman in towns and allow them to cover the rural areas

assigned to them from there. Experience has shown that such as arrangement does

not produce optimum results. Rural consumers are considered as tough

bargainers, price conscious and suspicious about new products and persuading

them in not an easy task for salesman. As far as possible, salesman should be

appointed from rural areas itself, so that sales can be promoted at relatively low cost. Many companies use local young people to sell the produce.5

ii) Cultural Congruence : The salesman must have proper acquaintance

with the cultural pattern of rural life in the given rural area. Since the cultural

patterns of rural communities differ from one another, a background that is in

consonance with the culture of the given community is to be preferred. Rural

salesman must also be able to guide dealers and consumers in the choice of

products. They should not hook them into bating what ever products they have in

their catalogues. They must instead help them in eliminating items that are outside

their specific requirements and items that are beyond their financial reach.

lit) Attitude Factors : Attitude factors are of paramount significance in

the rural context. For example, the rural salesman must have a great deal of

patience, as their customer is a traditional and cautious person. Perseverance is

another aspect. It will not be possible for the rural salesman to clinch the sale

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quickly. They may have to spend a lot of time with the customer and make several

visits to him to gain a favourable response from him.

iv) Good Knowledge of the local Language: Another special

requirement is that the rural salesman should be well versed with the local

language. He must be well versed in the lingo and idiom of the local area.

v) Creativity : Rural selling is also relatively a more creative task. The

products concerned may be very new in the rural context. The rural salesman have

to make special endeavour to introduce them in the rural areas through creative

selling, using the consumption pioneers and opinion leaders. Rural marketing also

presupposes the delivery of a higher standard of living to the rural masses and is

essentially developmental marketing.

In short, we can say that to be a good rural salesman, willingness to stay

and work in extended hours in villages, acquaintance with the cultural pattern of

rural masses, patience, understanding buyer psychology, knowledge of local

language and creativity are very essential.

2) Advertising:

Advertising is impersonal communication paid for by a clearly identified

sponsor promoting ideas, organizations, or products. The media include mass

media (TV,. Radio and Newspaper), point or purchase displays, packaging,

sponsorship, billboards, banner etc.

Advertising through various media form an important part of marketing

communication. The advertisement in rural context are to be designed according

to the need of rural consumer. However, when developing advertisements for

rural India, children and rural youth be target audience because they play great

role in the choice of brand of personal care life style products. To be successful,

advertising will have to incorporate cultural nuances and local regional language

of rural areas. Any communication through their culture was easily acceptable

because they could understand it well; Further, in rural areas, distribution of free

sample, price off offers gifts, re-usable package should be effective, keeping in

mind the long run market potential.

165

In the present scenario, companies are adopting different forms of

advertising like banners, posters, and traditional fairs, for promoting their product

apart from the conventional method of using the TV, Cinema and radio to reach

the rural customers. To attract the rural consumers companies can organize village

fairs, dance, and drama shows, group meetings to convince the rural consumers

about the products & services. The literacy rate in the rural areas is low and

consumer behaviour in these areas is traditional bound, which may be a problem

for effective communication. In order to convince rural consumers repetition of

message with right demonstration is needed.. Some companies have a permanent

fleet of video vans to carry message to the villages.

The Content and pattern of advertisements should be design according to

the regional requirement. The region-specific thrust is the mantra to succeed. For

example, a shampoo advertisement showing flowing tresses is not acceptable in

Rajasthan, where hair is considered indecent.

The advertisement through radio and TV should consider timing aspect

because the time schedule of rural people is different from urban people.

3. Use Unconventional Media : According to a study done by Broad mind

of WPP, there are 500 melas in India, visited by 15-20 crore visitors with total

purchasing power of about Rs. 500 cr. For example. Fair & lovely used Allahabad

Kumbh Mela for sampling activities and promotions. Puppetry acts as a very

entertaining and inexpensive medium for communication. It is also a very

effective medium of social expression . Folk theater is more popular than films, in

rural areas. It also has the advantage of reaching audience in their local dialects.

The puppet show at the time of village fairs and festivals may also be effective

means of communication.

4. Conventional and Non- Conventional Media Mix

To achieve fruitful results, brands will have to built an association with the

rural people which is possible by utilizing the various rural folk media to reach

them in their own language and in large numbers. Since the reach of organized

media is limited, it is an appropriate mix of conventional and non conventional

media which is bound to generate effective results in the rural market. Television,

166

Radio, Cinema, wall painting, audio visual vans, intensive house to house

campaigns, live demonstrations and distribution of free samples can be used as an effective media to push sales in rural areas.6

Hindustan uniliver relies heavily on its own company organized media.

These are promotional events organized by stockiest. Godrej uses radio to reach

to the local people in their language and push its soap brands in the interior and

remote areas. Coca-cola uses a combination of TV, cinema and radio to reach

53.6 % of rural households. LG Electronics uses vans and road shows to reach

rural customers. Philips India uses wall writing and radio advertising to drive its

growth in rural areas. Wall painting is an effective and economical medium of

advertising in rural areas because it lasts longer. Wall painted with the product

message is seen as a status symbol, in ruial areas. These wall painting are a source

of visual communication with local touch and deliver enhanced brand retention.

However, publicity through special shows, films with the help of mobile vans etc.

are still considered to be good method of promotion. The festival season of an apt

occasion for introducing new products.

5. Opinion leader’s Influence :

Word of mouth communication strategy works better in rural markets as

these markets enjoy limited reach of mass media and dispersed consumer groups.

Opinion leader in rural areas is considered to be knowledgeable and his advice is

normally followed. The opinion leader may be big landlords, teachers, sarpanch,

elders of the family, village banniyaas as well as young men and women with

some exposure to the urban ways of living.

For different products, there is a variation in the composition of opinion

leader groups. For agri-inputs, the group constitutes village leader, choupal

members and progressive farmers while for other product categories , the group

comprises customer’s friends and relatives and educated youth of the village.

Dealers also play a key role in influencing the buyer purchase decision. The life

insurance corporation of India has started a scheme called “Gram vikas” where

the sarpanch is given a target to sell a minimum of 10 policy plans and the

commission so earned is spent on the development of their respective villages.

167

Distribution Strategy : Distribution is the key to penetrate rural markets.

The availability of the product i:> Jso another factor that contributes to the success

of an enterprise. The MNCs could achieve this by means of adopting different

distribution strategies. The following distribution strategies may be considered by

the companies to reach out effectively into rural markets :

a) Audio Visual Vans : One of the ways could be using company

delivery vans which can serve two purposes. It can take the products to the

customers in every nook and comer of the market and it also enables the firm to

establish direct contact with them and thereby facilitiate sales promotion. The

vans have crowd pulling ability and are being effectively utilized for running

movie shows interspersed with product commercial as well as for product

demonstration.

b) Distribution upto Feeder Market: Keeping in view the hierarchy of

the rural villages, feeder markets or mandi towns offer excellent scope for

distribution. Stockists or wholesalers are appointed in such towns who arrange for

distribution in the interior areas. With the objective of market expansion in 1998-

99, HLL launched “Operation Streamline” in selected states of the country, which

was aimed at increasing the number of rural retail outlets from 50,000 in 1998 to

100,.000 in a span of one year. Project “Streamline” was targeted at places that had inadequate market development base resulting in distribution unavailability.6

c) Retail Distribution : Urban retail revolution has encourage a few

corporates to foray into the rural market with their large format retail stores.

Supply creates its own demand seems to be true especially for rural markets,

therefore, it is necessary to make goods available in as many towns and as many

retail outlets in villages centre as possible.

d) Public Distribution System : The fair price shops run by government

can be utilized to sell consumables and low value durables. The public

distribution system in India is fairly well- organized and under the new scheme of

things, it is expected to reach remote rural areas. An effective utilization of the

PDs system by marketers will enhance coverage.

168

e) Shandies/ Haats and Melas : The use of the captive audience points

like melas, haats and fair has contributed significantly to rural sales. There are

about 50000 haats and 25000 melas are held annually. Annual sales at melas to

nearly Rs. 3500 crore. According to the Indian market Research Bureau, around

8000 such melas are held in rural India every year. Haat is the oldest marketing

channel of India. Sunday market are more popular than midweek markets. Many

companies have utilized haats as a place for live demonstration of the benefits

associated with their products.

Mandis offer great potential for communicating with medium and large

farmers in states like Haryana and Punjab, Where there are no haats Around 7600

mandis all over India provide an opportunity

Conclusion : Rural markets are becoming important for reasons of

economic growth in these areas and increasing inter firm rivalry in urban markets.

The revolution, of rising expectation is gaining ground, incomes are increasing,

literary level is going up, transport and communication facilities, are improving,

and transport and credit facilities have increased substantially in rural market.

Prevalent Rural Distribution Models : Rural Distribution can broadly be

categorized into two smaller models companies adopt the wholesale activation

route owing to a lack of viability, whereas companies with sizeable product

basket adopt the retail route to reach rural markets.

Figure 3.3

Prevalent Rural Distribution Models

Retail Whole sale

Rural Markct

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Van Operation :• Stockiest from nearby urban markets cover four to five rural markets per day.

• A distance of 60 to 70 km is covered per day.

• They operate mostly on a cash basis as per the desired frequency.

• They provide better control over distribution.

Sub Stockiest Operation:

• Gets stock from super stockiest appointed in the district.

• Super stockiest typically cover 10-15 sub stockiest in the district.

• The sub-stockists covers all the outlets in his rural market, like the regular

stockist, by extending credit and services. In this model, the presence of a

local person in the market results in providing better market information and

service to outlets. Also, the &ub stockiest gets the opportunity to cover four to

five satellite markets nearby.

Distribution Models of FMCG Companies : The rural distribution models of

all major FMCG companies can be divided into two universal modals, with minor

variations from one company to another. These two models will hence forth be

referred to as distribution model I (DMI) and Distribution Model 2( DM2). They

are described below:

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Channel Structure : In this model, rural distribution has been separated

from urban distribution to create a specific focus on the rural market. The

coverage area of rural distributors is clearly defined. The company appoints a sub

distributor under the rural distributor to penetrate deeper into rural areas up to the

5,000 population villages. The rural distributors covers a large area with poor road

network and low volume per outlet, which would make it unprofitable for him to

cover small locations. The RD services the wholesale market in this area. The

wholesaler becomes important because of the assortment that he keeps the volume

that the generates and the customers to whom he caters from the satellite markets.,

where the company distribution has not yet reached. The generalized model DMI

has a larger number of points appointed in the rural areas, because the locations

are many and scattered. This ensures that the company’s products reach the maximum number of areas.7

The distributor has to supply smaller quantities at a higher frequency. The

DMI model focuses more an distributors and sub distributors rather than the

whole sale channel. The whole sale channel continues to play a role, but its

importance is considerable reduced. This model ensures better monitoring, price

discipline and control over the sale and distribution of products.

Distribution Model Pioneered by Hindustan lever : To effectively

service its various channels in an intensive efforts to built volumes, Hindustan

Lever Ltd. (HLL) came up with “operation harvest”. The programme used a fleet

of vans that regularly visited remote villages with a population of less than 5000

to restock small shops with its primary products, lifebuoy and wheel.

Transportation : Stock from the production units to the C& FA and up to the

distributors’ point is moved at company expense. The stock is first transferred to

the C & FA and then from there it is sent to the distributor on freight paid basis.

The transfer from the production units to the C& FM and to the distributor is

mostly done on heavy transport vehicles generally, an annual contract is executed

with transporters on fixed freight rates. The RDS cover their market using a light

commercial vehicle (eg. Tata 407), while the urban distributors generally use

171

three wheelers. The SDs cover the market using a van or a pick up truck. The

higher transportation cost in rural is due to the poor road network, the cost of the

longer distance to be covered is compensated by the company, through higher

margins or a small percentage of the SDs sales. The cost of coverage for the

distributor generally conies to the an average of 1-1.5 percent of the volume of

business that he does. This includes the salaries of four or five employers and the

maintenance cost of vehicles.

Coverage : While the objectives of a company is to improve reach, care

needs to be taken in devising the route plan (permanent journey plan - PJP),

which should be done in consultation with the distributor and the sales team so as

to optimize efforts and reduce expenses. The factors to be taken into account are

haat days, distance and the number of outlets to be covered and the type of vehicle

required. The PJP is prepared for six working day a week. Outlets are covered

only fortnightly (mostly weekly in urban ) because of the geographical spread and

the small volume of business generated per outlet. In general, the number of

outlets covered in a day is 30-40 (depending on the number of SKUs) of which

15-20 are productive. The typical distributor area is around 50 Km radius,

depending on the market potential.

Distribution Model 2

Channel Structure : This is a simpler model compared to DMI. There is no

separate channel for rural distribution. This model minimized distribution costs,

allowing the company to offer better margins to the distributions and other

channel partners who then push the sales of such products. Wholesaler locations

work as feeder marketers, from where the company caters to the requirement of

nearby villages, places not covered by the distributor . Ghari detergent, Priyagold

biscuits and other regional companies having high sales volumes follow this

model. This model is preferred by new entrants who lack the infrastructure

required to have a wide distribution network. Also, companies using this model

generally do not have a separate strategy for the rural market.

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Transportation : Stock is sent to the company

depot on a transfer basis and then on to the

distributor on freight paid basis, using a heavy

vehicles. Distributors cover their areas using

their own vehicles, mostly Matadors and

tempos. Companies do not reimburse the

transport expense of distributors. The distributor

employs three or four persons for the work,

depending on the market that he has to cover.

Coverage : Area covered by the distributor in DM2 is bigger than in

DMI. Therefore, coverage becomes an issue and the problem is further

compounded by the fact that there is no SD to cover the more interior parts. Most

of the times, it is the wholesaler market that is responsible for the availability of

these products in the interior-most parts of the country. The Coverage for the

companies that follow this model is mostly done on a ready stock, basis,

especially because of the lower number of SKUs as well as, high volumes . In the

case of priyagold biscuits, the number of assortments is high and so the

company follows an order booking policy which is an exception to the

generalized model.

Distribution Model of Durable Goods Companies : Since durables are

purchased largely from small and large towns, the number of locations for

distribution is a few thousand only and these can be managed by a few channel

partners.

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LG, formally known as lucky Goldstar in the early 1980 failed miserable

in its first attempt to enter the Indian market. The company with draw from the

market in the late 1980s and returned to India under the name LG Electronics in

the early 1990s. LG’s distribution model is quite simple. Its manufacturing plant

is located in Greater Noida, near Delhi. The finished goods are transported from

the manufacturing plant to the company owned depot, which in turn passes down

the line to C & F agents. The L&F agents role is similar to that of a large

distributor in an FMCG company, except for he fact that the does not own the

goods but only provides logistical support. There is a specific area assigned to

each C& F agent and multiple dealers and exclusive dealers are tied to the C& F

agent by the company’s field force. The orders are generated by the company’s

field force, which in turn is supplied by the C& F agent.

During the last couple of years, LG has focused on the rural segment in

India with its customized products. This has led to an increase in the sales from

the hinterland. To cater efficiently to the growing market in rural India, LG

introduced a new set up within the existing channel, that is, the introduction of the

company’s rural office at the district level. A separate stocking point was created

174

to manage the logistics of achieving deeper market penetration. LG has also

appointed dealers and exclusive dealers, to cater specifically to the rural market,

which is directly serviced by the rural district offices.

Emerging Distribution Models : With the entry of new players in rural

markets, marketers are innovating new cost effective approaches to reach these

markets. Looking at the challenges of rural distribution, the solution is likely to

centre on maximizing the existing infrastructure and ensuring the participation

and economic sustainability of all the stakeholders.

The SHG distribution model (Project Shakti), satellite distribution,

syndicated distribution, the NYKS model (Project Disha) , use of IT kiosks (e-

choupal), PDS, cooperative, petrol pumps, agricultural input dealers and otherA

unconventional channel of distribution are recent initiative in this direction.

The study of consumer behaviour is essential for the development of

marketing strategies and to segment the market. The main elements studied for

the analysis of rural consumer decision making process are media exposure,

frequency of purchases for non-durable, preference for purchasing durables, place

of purchase and shop loyalty.

Place of Purchase : The place where the consumer prefers to shop is

important for marketer to design his distribution strategy because if the choice is

not made available at the place where consumer shops, the consumer will buy

another available brand. Material of different brands are now clamoring for space

in every outlets. The point of purchase has become the company’s important

merchandising and advertising medium.

The table 8.5 shows that rural consumer can buy at three places namely: i)

in a shop in the same village ii) weekly bazaar (which is conduced once in a

week) and iii) in the shops of near by town.

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Table 8.5Frequency Distribution of Respondents

Regarding place of Purchase

Place of Purchase

LIG MIG HIG Total

Local Shop 84(42) 140(50) . 78(65) 302(50)

Weekly Bazar 56(28) 50(18) 0(0) 106(18)

Nearest Town 52(26) 82(29) 40(33) 174(29)

Any other 8(4) 8(3) 2(2) 18(3)

200(100) 280(100) 120(100) 600(100)

Source: Through QuestionnaireNote : Figure in Parenthesis indicate percentage.

The table 8.5 shows that majority of the rural consumer buy within the

Village. An interesting observation from this table is that Higher income group

consumers in rural markets do not visit the weekly bazaar. The concept of weekly

bazaar may be used to serve the needs of only lower income group and Middle

Income Group of consumers. The percentage of consumers going to near by town

is higher for higher income group consumers. On an average, about a third of

consumers do shop from the near by towns. It is indicative of the fact that still in

terms of distribution rural markets offer a vast scope for improvement.

Frequency of Purchases for Non-Durable : It is now proposed to

present the analysis for frequency of purchase. It is important to note how much a

customer buys at a time and is equally important to understand the frequency of

his purchase. These too aspects are very crucial for a marketer in designing

product size, package and distribution strategies. Frequency of purchase depends

on the nature of product and the background of the consumers. When it is a

convenience product the frequency would be higher where for a shopping product

the frequency of purchase would be low. Thus, the study of frequency of

purchase, provides an understanding for the distribution strategy.

176

Table 8.6Frequency Distribution of Respondents Regarding

Frequency of Purchase for Non DurableLIG MIG HIG Total

• Monthly 100(50) 224(80) 85(71) 409(68)

• Fortnightly 38(19) 22(8) 0(0) 60(16)

• Weekly 32(16) 28(10) 35(29) 95(16)

• Daily 30(15) 6(2) 0(0) 36(6)

200(100) 280(100) 120(100) 600(100)

Source: Through QeustionnaireNote : Figure in Parenthesis indicate Percentage

The analysis shows that majority of the consumer prefer monthly-wise

purchase. The table 8.6 depicts that monthly wise purchase are more pronounced

in the case of Middle Income Group. While the Higher Income Group Consumers

do not prefer fortnightly and Daily Purchases, a little less than three forth of them

prefer monthly purchases and the rest mostly prefer weekly purchases. It is also

interesting to note that lower Income Group Consumers to prefer Fortnightly and

daily Purchases.

Media Habits : Media plays an important role in disseminating product

information . As it is the main source of advertising, it is highly significant in

shaping the rural consumer loyal to a particular brand.

Table 8.7Frequency Distribution of Respondents (Consumer)

Regarding Media Habitsl LIG MIG HIG TotalNewspaper 10(5) 53(19) 36(30) 99(16)

Television 30(15) 56(20) 38(32) 124(21)

Radio 82(41) 56(20) 13(11) 151(25)

Cinema 26(13) 50(18) 11(9) 87(14)

Wallwritting 38(19) 48(17) 6(5) 92(15)

Hoarding 14(7) 17(6) 16(13) 47(8)

200(100) 280(100) 120(100) 600(100)

Source: Through QuestionnaireNote : Figure in Parenthesis indicate percentage

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Table 8.7 reveals that majority of the consumers still attachment great

importance to radio, followed by television. Television as medium is witnessing

upward moment in terms of consumer preferences, television may be the only

dominant medium. It is interesting to note that print media will take a longer time

to be most useful for marketers. This demands increase in literacy levels of the

consumers. As regards wall writing, which is also resorted to by many companies

to bring about awareness, it is important to note that 15 percent of consumer do

notice wall writing. The presence of hoarding is less in rural areas. As a result,

only 8 percent of consumers feel that they are exposed to product and brand

information through hoardings.

Further the collected information are analysed income wise. The table 8.7

reveals that the consumer having regular newspaper reading habit is about 16

percent of the sample. But it may be noted that most of this chunk is coming from

Middle and Higher Income Groups. If a product or brand is targeted to HIG,

selection of newspapers as media has some value. As a whole, the result is no way

significantly different from that of newspapers but TV viewing is mostly in the

case of MIG and HIG consumers. There is some useful insight in terms of media

habits, we can catch hare is, that most of the people who listen to radio come from

LIG. The analysis indicates that for the HIG, the most used medium is newspaper,

for MIG, it is T.V., while for LIG still radio dominates. However, with fast

reaching network of satellite TV channels, the possible expected trend could be,

TV comes on the top in rural areas over a period of time.

Shop loyalty : The important reasons mentioned for shop loyalty are its

proximity, credit facility, reasonable price and availability of variety products and

brands. An attempt is made in the following tables to find out the relative

importance of above mentioned reasons income wise.

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Table 8.8

Frequency Distribution of Respondent Regarding Reasons for Shop loyalty

Reason

LIG MIG IIIG Grand

Total

I 1 11 III Total I H III Total 1 II III Total

Near

(Proximity )no 0 20 350(30) 125 0 0 375(22) 58 0 22 196(27) 941(26)

Only Shop 0 0 0 0 0 0 66 66(4) 0 0 0 0(0) 66(2)

Credit

Facility

60 72 26 350(29) 28 120 17 341(20) 0 96 0 192(26) 883(24)

Quality

Product

0 15 0 30(2) 0 20 98 138(8) 42 0 18 144(20) 312(8)

Reasonable

Price

0 18 52 88(7) 26 85 16 264(16) 0 24 42 90(12) 442(12)

Variety

Products

30 95 102 382(31) 101 55 83 496(29) 20 0 38 98(14) 976(27)

Total 200 200 200 1220(100) 280 280 280 1680(100) 120 120 120 720(100) 3620(100)

Source: Through Questionnaire

Weight: I Rank 3, II Rank 2, III Rank I, Total of each income level shows weighted ranks

The respondents are asked to rank their preference towards the reason for

shop loyalty. The respective ranks are converted into product by assigning 3

weight for 1 rank, 2 weight for 2 rank, and 1 weight for III rank. Income-wise

analysis of shop loyalty is presented in Table 8.8. The low Income Group

respondents have attached highest importance to proximity (Near) (i.e. 30

percent) as the main reason for shop loyalty. This is followed by variety products

and credit facility available in the shop with 29 percent weightage respectively.

Interestingly, the availability of variety products has gained highest importance

(i.e. 29 percent weightage) by the MIG respondents. This is followed by

proximity and credit facility with 22 percent and 20 percent weightage

respectively. Greater importance to proximity at 27 percent weightage closely

followed by credit facility with 26 percent weightage. Keeping in view the present

analysis the marketers need to focus their attention primarily on proximity, credit

facility and variety products. In other words, marketers need to develop the

distribution network more closer to rural consumers.

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Reason for making Purchase from Periodic Market or Melas : The following

table shows the attitude of consumer about periodic market or melas and also

reveals why they make purchase from periodic market.

Table 8.9

Why Respondent make Purchase from Periodic MarketComments Strongly

AgreeAgree Indifferent Disagree Strongly

DisagreeWeightAverage

Scorei) Products Easy

available

429(71.5%) 156(26.00) 12(2.00) 0(0) 0(0) 4.67

ii) Price of the product

lire cheap

576(96.00) 120(20.00) 18(3.00) 6(1.00) 0(0) 5.71

iii) Quality of Products

are satisfactory

132(22.00) 225(375) 195(32.5) 42(7.0) 0(0) 3.71

iv) Transport system is

satisfactory

105(17.5) 408(68.00) 84(14.00) 0(0) 0(0) 4.01

v) product other than

available should be

added in periodic

Market

510(85.00) 60(10.00) 3095.00) 0(0) 0(0) 4.80

Source: Through Questionnaire

Note: Figure in Parenthesis shows percentages.

The table 8.9 revealed that highest number of respondents (96%) strongly

agreed that the prices of the product are cheap, (71.5%) respondents strongly

agreed that the goods are easily available, (85%) respondents surveyed supported

the statement that more new product should be made available in the periodic

market, (22%) respondents strongly agreed with the quality of the product and

(17.5%) respondents strongly agreed with satisfactory transport system. From the

above analysis it can be concluded that the goods were purchased from the

periodic market by the majority of respondents due to the following reasons i.e.

price of products were cheap, products were easily available.

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Tabic 8.10Frequency Distribution of Respondents Regarding Factor

Considered while Formulating StrategiesFactors Product

StrategyPrice

strategyPromotionStrategy

DistributionStrategy

Marketingstrategy

i) Target customers 28(20) 14(10) 15(11) 13(9) 70(50)

ii) Tastes & Preferences 56(40) 15(11) 20(14) 28(20) 21(15)

iii) Economic Competence {purchasing power of customer)

31(22) 53(38) 21(15) 20(14) 15(11)

iv) Product Design 44(32) 27(19) 11(8) 27(19) 31(22)

v) Product Range 28(20) 56(40) 21(15) 14(10) 21(15)

vi) Demand for a product 18(13) 24(17) 57(41) 21(15) 19(14)

vii) Level of Competition 28(20) 15(11) 49(35) 35(25) 13(9)

viii) Product life Cycle

Stages

14(10) 21(15) 35(25) 45(32) 25(18)

ix) Demographic Factor

a) Age 42(30) 18(13) 23(17) 49(35) 7(5)

b) Education 39(28) 20(14) 10(7) 45(32) 27(19)

c) Family Sire 73(52) 13(9) 20(14) 11(8) 24(17)

d) Expenditure pattern 15(11) 69(49) 32(23) 13(9) 11(8)

x) Behavioral factor

a) Product Usage Rate 35(25) 8(6) 42(30) 31(22) 22(16)

b) Brand Loyalty 31(22) 11(8) 25(18) 49(35) 24(17)

c) Occasion of Consumption

(Marriage, festival, Harvest

period

36(26) 39(28) M-) 15(11) 17(12)

xi) Infrastructure facilities 2105) 15(11) 20(14) 55(39) 29(21)

xii) Customer Satisfaction 17(12) 14(10) 22(16) 28(20) 59(42)

xiii) Corporate Image 22(16) 35(25) 39(28) 20(14) 24(17)

xiv) Geographic Coverage 35(25) 18(13) 11(8) 59(42) 17(12)

xv)Geographic

Concentration of Market

20(14) 15(11) 13(9) 39(28) 53(38)

Source: Through Questionnaire

Note : Figure in parenthesis shows percentage.

It is evident from table 8.10 that an overwhelming majority of respondents

(72 percent) considered 'tastes & preferences’ and 'product design’ as very

important factor in designing product, strategy, followed by 52 percent

considered family size, 30 percent 'age’, 26 percent 'occasion of consumption’,

closely followed by 25 percent as 'product usage rate’ and 32 percent considered

181

'product design’ as very important factor. It is important to find out that the

marketer have to concentrate on the product design, taste & preference

demographic factor occasion of consumption and customer satisfaction in the

designing of product strategy for the rural areas.

Pricing Strategy : In case of Pricing Strategy, the table 8.10 revealed that

majority of the respondents (78 percent) considered Economic competence of

customers and product range as very important factor, followed by 49 percent,

considered expenditure pattern as very important factor. Demand for a product

and level of competition were also considered as very important factor by 28

percent of the respondents respectively. The study suggests that the marketer have

to concentrate on purchasing power of consumer, product range, level of

competition and Demand, for a product in the designing of pricing strategy.

Promotion Strategy : A look at the table 8.10 reveals that demand for a

product is the most dominating factor in rural areas for designing a promotion

strategy. Level of competition and product life cycle stages were also considered

as very important factor by 35 percent and 25 percent of respondents respectively.

28 percent respondents considered corporate image as very important factor. The

data shows that marketers have to concentrate on Target customers, demand for a

product, level of competition, product life cycle stages and corporate image for

designing promotion strategy.

Distribution Strategy : The table 8.10 revealed that the majority of

respondents (81 percent) considered Geographic Coverage and Infrastructure

Facilities available as very important factor in designing distribution strategy.

Brand loyalty and customer satisfaction were also considered as very important

factor by 35 percent and 20 percent respondents respectively. The study suggests

that the marketers have to concentrate on Target Customer, brand loyalty,

Geographic coverage and Geographic Concern of market for designing

distribution strategy. The rural consumers should have access to products at their

doorsteps. For this, retail outlets become necessary in the rural areas.

Marketing Strategy i Analysis of the table 8.10 reveals that majority of

the respondents (92 percent) considered target customers and customers

182

satisfaction as very important factors followed by 59 percent of respondents

considering Geographic Concentration of market and infrastructure facilities as

very important factor. Corporate image and Geographic coverage were also

considered as very important factor by 17 percent and 12 percent of the

respondents respectively. It has been noted that product design and product life

cycle stages were also considered very important factor. The study suggests that

the marketer must take into account the special character of the rural areas,

attitudes and socio-psychological characteristics of the rural population.

Table 8.11Frequency Distribution of Respondents (Intermediaries & Executive)

Regarding Importance Attached to Successful Rural IV arketing StrategiesNot at

all Imp.Not too

Imp.SomeWhatImp.

VeryImp.

To a large extent

Averageweighted

scorea) Innovative product design 3(2) 4(3) 8(6) 21(15) 104(74) 4.56

b) Small unit packaging,small sachets packing

4(3) 7(5) 15(11) 28(20) 85(61) 4.28

c) Inducing product trial 4(3) 3(2) 11(8) 31(22) 91(65) 4.44

d) Utility oriented products 8(6) 13(9) 21(15) 25(18) 73(52) 4.01

e) Low cost products 6(4) 10(7) 25(18) 22(16) 77(55) 4.10

f) Creation of sense of

security

8(6) 6(4) 15(11) 27(19) 84(60) 4.23

g) Extended Distribution

facility to the villages

0(0) 4(3) 21(15) 25(18) 90(64) 4.43

h) Door to Door Campaign 24(17) 20(14) 27(19) 25(18) 45(32) 3.35

i) Encourage primary

education in villages

20(14) 24(17) 39(28) 27(19) 31(22) 3.20

j) Launching of product at the

time of harvest and festival

season

4(3) 8(6) 7(5) 29(21) 91(65) 4.37

k) Managing logistics 25(18) 29(21) 31(22) 20(14) 35(25) 3.08

1) Use of Rural Specific Media

Mix

24(17) 21(15) 29(21) 27(19)

i

39(28) 3.26

Source : Through Questionnaire

Note : Figure in Parenthesis shows Percentage

183

To measure, the degree of importance attached to successful rural

marketing strategies, a query was asked from respondents and responses were

obtained at five point rating scale. An analysis was made on the percentage basis

and then an attempt was made on to calculate average weighted scores for

respondents by assigning weights as 1,2,3,4,5 to the ‘not to all important’, Not too

important’, ‘Some what important’, ‘very important’ and ‘To a large extent’

respectively. Table summarises the information in this regard. It is evident from

Table that an over whelming majority of respondents (89 percent) considered

innovative product design as very important strategy followed by 87 percent of

respondents considering inducing product Trial as very important strategy.

Launching of product at the time of harvest and festival season and Extended

distribution facility to the village were also considered as very important strategy

by 86 percent and 82 percent of the respondents respectively 81 percent

respondents considered Small Sachets Packing as very important strategy. But as

far as encouraging primary Education in villages is concerned 31 percent

respondents considered it not too important strategy. It has been noted that

Encouraging primary education in villages and Managing logistics were

considered only to be somewhat important by 28 percent of and 22 percent

respondents respectively. Only 39 percent of respondents took managing logistics

as very important strategy.

Analysis of the table 8.11 reveals that average, respondents has considered

innovative product design, small unit packaging, inducing product trial, utility-

oriented products, low cost products creation of sense of security, Extend

distribution facility to the villages and launching of product at the time of harvest

and festival season as ‘very important’ to Targe extent’ strategy (Score being

above 4) while Door to Door Campaign, Encouraging Primary Education in

Villages, 'Managing logistics’ and 'Use of Rural Specific media mix’ is

considered ‘Some what important’ strategy.

To be successful in the rural market, marketers will have to be innovative

and sensitive while devising marketing strategies . Traditional urban marketing

strategies will have to be localized as per the demands of the rural market.

184

Products for rural markets have to be simpler, easy to use, visually identifiable,

affordable, communicated in an interesting style and available at the customer’s

door step. The strategies to be adopted by the MNCs may be based on the

cultural, sociological economic and psychological background along with a factor

of four p’s of the consumer in that area. Further, these strategies have to be

changed over a period of time to meet the varied demands of the consumers.

185

References

1. Subramanium, R., “Rural Marketing in India : Corporate Stragegies”,

Chartered Financial Analyst, Vol. 11, No. 2, 2005, p. 35.

2. Bhattacharyya, Kaberi, “Rural Marketing in India : Problems,

Prospects and Emerging Dimension”, Marketing Mastermind, Vol. Ill,

Issue - 9, 2007, p. 34.

3. Kashyap, Pradeep and Raut, Siddhartha, The Rural Marketing Book,

New Delhi, Biztantra, 2006, p. 179.

4. Ibid., p. 183.

5. Krishnamachary J'1 G.S.C., Rural Marketing . Text and Cases, New

Delhi, Replika Press Pvt. Ltd., 2002, p. 246.

6. Vaish, Tarang, “Promotion and Communication Strategies for Rural

Markets in India”, Marketing Mastermind, Vol. 8, No. 3, 2006, p. 11.

7. Kashyap, Pradeep and Raut, Siddhartha, The Rural Marketing Book,

New Delhi, Biztantra, 2006, p. 179.

Ibid., p. 2168.