5. Rural Marketing

8/3/2019 5. Rural Marketing

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Rural

Marketing


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The Rural Market Envt.

The Rural Consumer:

The Rural Demand Other Aspects


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The Rural Consumer: A detailed Profile

Size of RCG

Rural population about 73% of total population.

Acc to 2001 census74 crore population

12 crore households70% of total

Location Pattern: A scattered market

Urban population in 3,200 cities

Rural population in 5,70,000 villages

55% - 500

>25% - 200


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Socio-economic Position

Low purchasing power/per capita income

Bounded by tradition, culture, religion &

community.

60% rural income from agriculture

>50% have income < Rs. 25,000About 14% have income >50,000

In recent years, 70 % rural households have started

saving their income. (service class, non-farmers likeshop keepers)


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Culturally a Diverse & Heterogeneous Market

In terms ofreligious, linguistic, social & cultural factors.

State to state variation in extent of development

From study conducted by IMRB (Indian Market Research Bureau)provides development index points for each state on

Health & education

Availability of public transport

Electricity

TV transmission Banks

Post offices

Water supply, etc

Average villages have 33 index points

In Kerala88 index points

Bihar22

UP, MP, Rajasthanclose to 22

Maharashtra, Haryana, Karnataka40-50


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Literacy level: Rural India has literacy rate of 28% compared with 55% of the

whole country.

Scenes have changed since last few years. Literacy rate hasincreased from 20% to 28%.

Every year 8 million people get added to rural India's literatepopulation

Adult literacy programmes have been launched

Lifestyle:

Conservative & tradition bound.

But it has changed to a good extent due to:

Increase in income Growth in education

Enlarged media reach

Growing interaction with urban area

Marketer's effort to reach rural areas


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Buying Behaviour: factors that influence

Literacy level

OccupationSocial & cultural factors

Exposure to media

Exposure to urban lifestyle

Marketers efforts

The way the product is used.

Involvement of others in the purchase

The buying Behaviour has undergone a major

change. There are people in the rural area whose

income has increased & they have the potential to

buy expensive products.


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The Rural Demand:

Some well established products

Pressure cooker

Cooking utensils

Batteries

Cycles, bikes, scooters

Radio/tape

Pesticides, fertilizers

Tea

Toothpowder/paste

Sewing machines

Artificial jewelry

Medicines

Tobacco & products

Bathing soaps, washing

cakes, washing powder

Cell phones

Fans

TV

Wristwatches


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Recent Trends

1. Steady growth2. Welcome change in the composition of Rural

Demand.

Several products already well established in the ruralmarket

In many products, rural consumption accounts for alarger share than urban

In many products, rural market has overtaken the urbanin growth ratedetergent powders, washing soaps,analgesics.

Position of durables - (bicycle53, ceiling fan19,

radio - 42 )


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Who buys the high-priced durables in the rural areas?

NCAER (National Council for Applied Economic

Research) classified durables into 3 categories-

Low priced durableswatches, radios, irons, fans, etc. Relatively higher priced durablesb/w TV, sewing

machines, mixers 2-in-1 music systems.

High aspiration & high pricedcolor TVs, refrigerators,

motorized two-wheelers.

3. Factors behind the Growth & Diversification in

rural demand New income due to agricultural/ rural development

Green revolution since 1970.

New employment, income & purchasing power.


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The expectation revolution

The rising expectations have enlarged the desire &

awareness. Strengthened their motivation to work, earn & consume.

4. Rural demand is more seasonal Agriculture dominates the income source.

Purchasing on marriages & festivals (also the

harvesting time)


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1. The growing opportunity, one main driver -

Rural demand is growing rapidly

Increase in income/purchasing power has increased in access of

products.

2. Heat of competition in the urban market

Growing competition in the urban market

Rural market is largely untapped (advantage to early entrants)

Competition in urban area is tough for products whose

penetration is high. (E.g.toothpaste penetrates to 80% in urban& 30% in rural market)

Brand loyal customers in urban. First time users in rural.

Not competing in the rural market will keep them out of about

half of countrys market

Rural Market Becomes Attractive To Corporates


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Company Rural sales ( % share)

HUL 50Colgate 50

Godrej 30

Cavinkare 33Marico 25

Cadbury 25

Cipla 18

3. Many cos. Have already taken to the rural market in

a big way


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Tapping the Rural Market

Segmentation & Targeting Product Management

Physical Distribution Channel Management

Sales Force Management

Marketing Communications

S i d T i


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Segmentation and Targeting

Geographic segmentation

Climate & level of irrigation Nearness to a feeder town/industrial project

Demographic segmentation

Population concentration Age

Literacy level

Incomeregular income & seasonal income

Buying behaviour segmentation

Sources of data on rural consumersCMIE (Centre ForMonitoring India Economy)

Thompson rural index


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Product Strategy

Whether the product that is sold in the

urban market can be supplied as it is orneed any modification.

Economic and income realities should

be considered.

Lower priced versions do succeed inmany cases but not in all cases.


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1. Specifically designed products

The Tractor/trailer

Evereadys Jeevan Saathi Torch

Model Variants - bikes

Colour VariantsAsian Paints

2. Different products/models, brands, packing,

pricing & positioning

3. Package design & pack size

4. Logos symbols & mnemonics

5. Brand decisions

6. Sell value brands, not cheap brands

7. Preconceived notions have no place


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Physical distribution

PROBLEMS:Transportation & warehousing

Costservice dilemma becomes more acute

transportation & warehousing costs r high

The delivery vanITC & HUL have their own vans.

High costs can be covered if business is good


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Channel management

Problems:multiple tiers add to the costs

Non-availability of dealers

Poor viability of outletsmanufacturer- additionalexpenses & shopkeeper- no returns

Inadequate banking and credit facilities50 villages &

1 bank branch

The village shop is the key to rural distribution

Improving the viability of the outletsdeal in no.

of product lines.


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Sales force management

What a salesman requires to be in rural market

Willingness to be located in rural areas

Cultural congruenceguide in choosing the rightproduct and not forcing to buy everything or anything

Attitude factorssalesman should be patient & shouldhave perseverance.

Knowledge of local language

Ability to handle several product lines

Creativitycreate consumption pioneers & opinionleaders

Managing rural sales forcepractical training to

rural sales force


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Marketing communications

Selecting the media mix

TV

Cinema

Radio

Print media

Outdoor

POPs

Audio-visual/publicity vans

Syndicated AV vans

Puppet shows, Harikatha

Music cassettes

Communication should be uniquely assembled & delivered

Need for creativitybuyers are time consuming

HULs rural communication for surf


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Rural Marketing Is

DevelopmentalMarketing

Documents

5. Rural Marketing