Rural Marketing

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Research Report

On

“RURAL MARKETING:TARGETING THE NON-

URBAN CONSUMERS”

Submitted in partial fulfilment

of requirements of

Master of Business Administration

Submitted By,

Badal Solapurwala

MBA(2014-2016)

AURO UNIVERSITY

The School of Hospitality & Management

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Table of Contents

INTRODUCTION .................................................................................................................................. 3

What is rural? ...................................................................................................................................... 3

Rural Marketing .................................................................................................................................. 3

IMPULSE TO GO RURAL ................................................................................................................ 5

Large Population ............................................................................................................................. 5

Rising Rural Popularity ................................................................................................................... 5

Growth in Market ............................................................................................................................ 6

Effectiveness of Communication .................................................................................................... 6

LITERATURE REVIEW ....................................................................................................................... 6

Why Rural India? .................................................................................................................................. 10

Opportunities in Indian Rural market ................................................................................................... 11

More rural development initiatives by the government. ....................................................................... 11

Challenges in Indian Rural market........................................................................................................ 12

The major hurdles in tapping the rural markets can be summarized as: - ............................................. 13

Methods Followed Traditionally ........................................................................................................... 14

Strategies for Rural Marketing .............................................................................................................. 14

Marketing Strategy ............................................................................................................................ 14

Distribution Strategy ......................................................................................................................... 15

Promotional Strategy ........................................................................................................................ 15

Scope of Rural Marketing ..................................................................................................................... 16

Population ......................................................................................................................................... 16

2. Rising Rural Prosperity ................................................................................................................. 16

3. Growth in consumption ................................................................................................................. 17

4. Change in life style and Demands ................................................................................................. 17

5. Market growth rate higher than urban: ......................................................................................... 17

6. Life cycle advantage ..................................................................................................................... 17

7. Decision-making Units ................................................................................................................. 17

RESEARCH METHODOLOGY .......................................................................................................... 18

Research Design: .............................................................................................................................. 18

Data Collection Method: ................................................................................................................... 18

Secondary Data ............................................................................................................................. 18

CONCLUSION ..................................................................................................................................... 18

REFERENCES ..................................................................................................................................... 18

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INTRODUCTION

What is rural?

According to the census of India, villages with clear surveyed boundaries not having a

municipality, corporation or board, with density of population not more than 400sq.km and

at least 75 per cent of the male working population engaged in agriculture and allied

activities would qualify as rural. Therefore, from the above stated conditions, there are

638,000 villages in the country. Of these, only 0.5 cent has a population above 10,000 and

2 per cent have population between 5,000 and 10,000. Around 50 per cent has a population

less than 200. However, FMCG and consumer durable companies are considering a

territory as a rural market, which has more than 20,000, and below 50,000 populations.

According to them, class-II and class-III towns are considered as rural. According to the

census of India 2001, there are more than 4,000 towns in the country that are categorized

as Class II and III Towns based on the population. Size of rural market is estimated to

be 42 million households and rural market has been growing at five times the pace of the

urban market.

Rural Marketing

The concept of Rural Marketing in India Economy has played an influential role in the

lives of people. The rural market in India is not a separate entity in itself and it is highly

influenced by the sociological and behavioural factors operating in the country. Rural

marketing determines the carrying out of business activities bringing in the flow of goods

from urban sectors to the rural regions of the country as well as the marketing of various

products manufactured by the non-agricultural workers from rural to urban areas. The rural

market in India is vast, scattered and offers a plenty of opportunities in comparison to the

urban sector. It covers the maximum population and regions and thereby, the maximum

number of consumers.

'Go rural' is the slogan of marketing guru is after analyzing the socio-economic changes in

villages. The Rural population is nearly three times of the urban, so rural consumers have

become the prime target market for consumer durable and non-durable products, food,

construction, electrical, electronics, automobiles, banks, insurance companies and other

sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides

and farm machinery.

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However, the success of the product in the rural market is as predictable as rain. It has

always been difficult to understand the rural markets. Marketers need to understand the

social dynamics and attitude variations within each village. But by overcoming the

challenges and looking into the opportunities which rural markets offers to the marketers

it is said that the future is very promising for those who understand the dynamics of rural

markets and exploit them to their best advantage. Rural markets face the critical issues of

Distribution, Understanding the rural consumer, Communication and Poor infrastructure.

The marketer has to strengthen the distribution and pricing strategies. Improvement in

infrastructure and reach, promise a bright future for those intending to go rural. Rural

consumers are keen on branded goods nowadays, so the market size for products and

services seems to have burgeoned. The rural population has shown a trend of wanting to

move into a state of gradual urbanization in terms of exposure, habits, lifestyles and lastly,

consumption patterns of goods and services.

To expand the market by tapping the countryside, many MNC's are foraying into India's

rural markets. Among those that have made headway are Hindustan Liver, Coca-Cola, LG

electronics, Britannia, Colgate Palmolive and the foreign invested telecom companies.

These companies' foreseeing the vast size and demand in the rural market cannot afford to

ignore. Rural market accounts for half the total market for TV sets, Fans, Pressure

cookers, bicycles, washing soap and tooth powder where FMCG products in rural

products in rural markets is growing much faster than the urban counterpart.

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

economy has resulted into substantial increase in the purchasing power of the rural

communities. Because of green revolution, the rural areas are consuming a large quantity of

industrial and urban manufactured products. In this context, a special marketing strategy,

namely, rural marketing g has emerged. However, often, rural marketing is confused with

agricultural marketing - the latter denotes marketing of produce of the rural areas to the

urban consumers or industrial consumers, whereas rural marketing involves

delivering manufactured or processed inputs or services to rural producers or consumers.

The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during the last

fifty years. The FMCG sector is a cornerstone of the Indian economy. This sector touches

every aspect of human life. Indian FMCG market has been divided for a long time between

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the organized sector and the unorganized sector. Unlike the US market for FMCG which is

dominated by a handful of global players, India‘s Rs. 460 billion FMCG market remains

highly fragmented with roughly half the market going to unbranded , unpackaged home

made products. This presents a tremendous opportunity for makers of branded products

who can convert consumers to buy branded products.

Globally, the FMCG sector has been successful in selling products to the lower and middle-

income groups, and the same is true in India. Over 70% of sales are made to middle class

households today and over 50% is in rural India. The sector is excited about a burgeoning

rural population whose incomes are rising and which is willing to spend on goods designed

to improve lifestyle. Also with a near saturation and cutthroat competition in urban India,

many producers of FMCGs are driven to chalk out bold new strategies for targeting the

rural consumer in a big way. MART, the specialist rural marketing and rural development

consultancy, has found that 53 per cent of FMCG sales and 59 per cent of consumer

durable sales lie in the rural areas. Of two million BSN L mobile connections, 50 per cent

went to small towns and villages; of 20 million Rediff mail subscriptions, 60 per cent came

from small towns; so did half the transactions on Rediff's shopping site. According to a

study by Chennai-based Francis Kanoi Marketing Planning Services Pvt Ltd, the rural

market for FMCG is worth Rs.65,000 crore, for durables Rs 5000 crore, for tractors and

agri-inputs Rs.45,000 crore and two-and four-wheelers, Rs.8000 crore. In total, a whopping

Rs.123,000 crore. This could be doubled if corporate understood the rural buying behaviour

and got their distribution and pricing right.

IMPULSE TO GO RURAL There are many reasons that have urged the FMCG companies to enter the uncharted

territory of rural India. Some of the attractions are discussed below:

Large Population

The rural Indian population is large and its growth rate is high. Over 70% India is one

billion and population lives in around 627,000 villages in rural areas. This simply shows

the great potentiality rural India has to bring the much-needed volumes and help the

FMCG companies to bank upon the volume driven growth.

Rising Rural Popularity

India is now seeing a dramatic shift towards prosperity in rural households. To drive

home the potential of rural India just consider some of these impressive facts about the

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rural sector. As per the National Council for Applied Economic Research (NCAER) study,

there are as many middle income and above‘households in the rural areas as there are in the

urban areas. There are almost twice as many lower middle income‘households in rural areas

as in the urban areas.

Growth in Market

The purchasing power in rural India is on steady rise and it has resulted in the growth of

the rural market. The market has been growing at 3-4% per annum adding more than one

million new consumers every year and now accounts for close to 50% of volume

consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than

urban markets.

Effectiveness of Communication

An important tool to reach out to the rural audience is through effective communication. A

rural consumer is brand loyal and understands symbols better. This also makes it easy to sell

look alike". The rural audience has matured enough to understand the communication

developed for the urban markets, especially with reference to FMCG products. Television has

been a major effective communication system for rural mass and, as a result, companies

should identify themselves with their advertisements. Advertisements touching the emotions

of the rural folks, it is argued, could drive a quantum jump in sales.

IT Penetration in Rural India Today there are over 15 million villagers in India who are

aware of the Internet and over 300,000 villagers have used it! Ten years back, history was

created with Public Call Office phone booths (essentially manually operated payphone

facilities), opening in every corner of the country. Web connectivity through various types

of communication hubs will surely affect the currency of information exchange. As the

electronic ethos and IT culture moves into rural India, the possibilities of change are

becoming visible.

LITERATURE REVIEW

The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian

economy. This sector touches every aspect of human life. The FMCG producers now

realize that there is a lot of opportunity for them to enter into the rural market. The

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sector is excited about the rural population whose incomes are rising and the

lifestyles are changing. There are as many middle-income households in the rural

areas as there are in the urban. Thus, the rural marketing has been growing steadily

over the years and is now bigger than the urban market for FMCGs. Globally, the

FMCG sector has been successful in selling products to the lower and middle-income

groups and the same is true in India. Over 70% of sales are made to middle class

households today and over 50% of the middle class is in rural India. The sector is

excited about a burgeoning rural population whose incomes are rising and which is

willing to spend on goods designed to improve lifestyle. Also with a near saturation

and cutthroat competition in urban India, many producers of FMCGs are driven to chalk

out bold new strategies for targeting the rural consumers in a big way. However, the

rural penetration rates are low. This presents a tremendous opportunity for makers of

branded products who can convert consumers to buy branded products. Many companies

including MNCs and regional players started developing marketing strategies to lure the

untapped market. While developing the strategies, the marketers need to treat the rural

consumer differently from their counterparts in urban because they are economically,

socially and psycho-graphically different to each other. (Singhal, Rathi, & Bhardwaj,

2013)

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

economy has resulted into substantial increase in the purchasing power of the rural

communities. There is significant difference in the urban and rural market in India. Rural

consumer is different as to Urban consumer in terms of Income, Education, Family back

ground and other demographic aspects. Due to green revolution, the rural areas are

consuming a large quantity of industrial and manufactured products. In this way rural

market offers opportunities in the form of large untapped market, increase in disposable

income, increase in literacy level and large scope for penetration. To take the advantage of

these opportunities, a special marketing strategy ‘Rural Marketing’ has emerged. Rural

markets in India have undergone considerable changes as the urban markets have hit

saturation and relative growth has slowed down. Marketers have realized that rural India

has tremendous potential and with increasing focus of the policy makers on injecting

money to pump the rural economy have all contributed towards an increased interest of

businesses towards rural India. (Verma, 2013)

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The Fast Moving Consumer Goods sector is a vital contributor to India‘s Gross

Domestic Product. The FMCG sector has been contributing to the demand of lower and

middle-income groups in India. Over 73% of FMCG, products are sold to middle class

households in which over 52% is in rural India.

Rural marketing has become the hottest marketing arena for most of the FMCG

companies. The rural India market is huge and opportunities in it are limitless. Saturation

and cutthroat competition in urban areas, many FMCG companies are moving towards

the rural market and making new strategies for targeting the rural consumer. The Indian

FMCG companies are now busy in formulating new competitive strategies for this

untapped market for so while and having high potential. Therefore, a comparative study

is made on growth, opportunity, and challenges of FMCG‘s in rural market.

One of the most attractive reasons for the companies for tapping it is income is rising in

rural areas and purchasing power of the lower and middle income group is also rising

and which is eager to spend money on improvement of their lifestyle. (Srivastava &

Kumar, 2013)

Indian markets are stretching beyond urban areas. It is rightly said that India resides in

villages and rural markets have succeeded in getting the attention of Indian companies to

MNC’s. Differences between Urban and Rural Markets and also look at some of the

myths associated with the Indian Rural Markets and try to present the reality. (Sagi,

2014)

Marketing can play an important role in fostering economic growth and development. This

process was presciently recognized by Drucker (1958) over 50 years ago. He pointed out

that marketing is at the same time the least developed economic activity, but also the one

with the greatest multiplier effect on economic development. The mechanism for growth

through marketing relates to the mobilization of latent economic energy and fostering the

development of entrepreneurs and managers. By empowering rural consumers, marketers

establish the foundation necessary for success. In, rural consumers in emerging market

economies offer tremendous potential, but realizing this requires significant investment,

substantial creativity in formulating strategy and overcoming obstacles and above all,

patience and adoption of a long-term perspective. (Craig & Douglas, 2011)

Rural marketing is much talked about subject for the business establishments especially

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the FMCG and the consumer durable industry. In present scenario every marketing

player is keen to invest in rural markets. This is because of the fact that rural markets

have high growth rate and preferences of people living in rural areas are also getting

changed. They are also willing to have an improvement in their standard living. Now

days many of business firms are planning to have a significant investment in rural

markets in order to increase their growth rate. Though there is vast potential and

substantial growth opportunities in the rural markets, yet there are some challenges too,

which caused hurdles in tapping rural markets. But the question arises whether they

would get desired results by investing in the rural markets. (Siddique, 2012)

Brands can be successful when they are closely associated with consumers and are

preferred by consumers over unbranded products. Personality factors of the brands give

consumers the means whereby they can make choices and judgments. Based on these

experiences, consumers rely on chosen brands and sense guaranteed standards of quality

and service, which augments consumer trust and brand value. Human personality traits

need to be evaluated meticulously by firms in a given market to determine the short-term

competitive advantage. The performance of global brands in low-profile consumer market

segments is constrained by high transaction costs and coordination problems along the

brand promotions, consumption and consumer value chain. Hence, firm’s managing

brands in Bop market segments need to reduce brand costs by increasing sales volumes

and augmenting consumer value. Brands in Bop market segments are socially and

culturally embedded, and co-created and positioned by the influence of premium market

brands. Advertising and point-of-sales promotions also strengthen the brands in Bop

market segments. (Rajagopal, 2009)

Through there is a definite growth in rural economy and the rural economy and rural

markets offers lucrative opportunities for both consumer durables, yet market have not

directed their efforts as aggressively as they should have been. Around 700 million

people, or 70% of India's population, live in 6, 27,000 villages in rural areas. 90% of the

rural population is concentrated in villages. Rural marketing is as old as the civilization.

Surplus of agro-products were exchanged in earlier days in the barter system. (Sinha,

2014)

The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian

economy. This sector touches every aspect of human life. The FMCG producers now

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realize that there is a lot of opportunity for them to enter into the rural market. The sector

is excited about the rural population whose incomes are rising and the lifestyles are

changing. There are as many middle income households in the rural areas as there are in

the urban. Thus the rural marketing has been growing steadily over the years and is now

bigger than the urban market for FMCGs. Globally, the FMCG sector has been successful

in selling products to the lower and middle income groups and the same is true in India.

Over 70% of sales are made to middle class households today and over 50% of the middle

class is in rural India. The sector is excited about a burgeoning rural population whose

incomes are rising and which is willing to spend on goods designed to improve lifestyle.

Also with a near saturation and cut throat competition in urban India, many producers of

FMCGs are driven to chalk out bold new strategies for targeting the rural consumers in a

big way. But the rural penetration rates are low.

This presents a tremendous opportunity for makers of branded products who can convert

consumers to buy branded products. Many companies including MNCs and regional

players started developing marketing strategies to lure the untapped market. While

developing the strategies, the marketers need to treat the rural consumer differently from

their counterparts in urban because they are economically, socially and psycho-graphically

different to each other. (Raj & Selvaraj, 2007)

Rural market is the key to survival in India. Most consumer markets are getting cluttered,

thereby slowing down the growth rates of consumer products. While overall volumes

continue to grow reasonably well, there are too many players eating into each other's

market share. Reducing prices and investing heavily in sales promotion becomes

inevitable in the urban markets. Consequently, operating margins come under pressure and

new growth markets need to be explored. It is here that the rural markets provide an

opportunity, a ray of hope for a marketer. (Upadhyaya, 2014)

Why Rural India?

There are various reasons why every industry is taking a very serious look at rural

markets: - About 285 million live in urban India whereas 742 million reside in rural

areas, constituting 72% of India's population resides in its 6, 00,000 villages. Size of

rural market is estimated to be 42 million households and rural market has been growing

at five times the pace of the urban market.

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Opportunities in Indian Rural market

* More than 750 million people * Estimated annual size of the rural market

FMCG Rs. 70,000 Crore

Durables Rs. 5,500 Crore

Agricultural-Inputs (including tractors) Rs. 48,000 Crore

2 / 4 Wheelers Rs. 8,400 Crore

* In financial year 2011-12, LIC sold more than 50% of its policies in rural market.

* 42 million rural households (HHs) are availing banking services in comparison to 27

million urban HHs.

* Investment in formal savings instruments is 6.6 million HHs in rural and 6.7 million HHs

in urban.

* In last 50 years, 45% villages have been connected by road.

* More than 90% villages are electrified, though only 44% rural homes have electric

connections.

* Government is providing subsidiaries to the villagers to use other source of energy like

Solar System and is now being used in large amount.

* Number of "pucca" houses increasing day by day.

* Rural literacy level improved from 36% to 59%.

* Percentage of BPL families declined from 46% to 25%.

* Out of two million BSNL mobile connections, 50% are in small towns / villages.

* 41 million Kisan Credit Cards have been issued (against 22 million credit-plus-debit

cards in urban), with cumulative credit of Rs. 977 billion resulting in tremendous liquidity.

More rural development initiatives by the government.

Increasing agricultural productivity leading to growth of rural disposable income.

Lowering of difference between taste of urban and rural customers.

Good Monsoons in the last couple of years.

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Growing rural infrastructure - thanks to Government initiatives.

Setting up of channels like e-choupals by companies like ITC.

Many companies like Colgate-Palmolive, HLL, Godrej, etc., have already made forays

into rural households but still capturing the markets is a distant dream. Most marketers

still lack in-depth knowledge to analyze the complex rural market. In the Indian

context, rural marketing is a complex subject. For a business organization, rural

marketing is beset with a number of problems. The prices of rural marketing pose many

problems due to the vastness of the country and a high potentiality for providing an

effective marketing system. Besides, a few other problems stem from the under-

developed markets, and illiterate and gullible people constitute the major segment of

the markets. More purchasing power is not enough. It is not enough to have some

consumption pioneers. The activation of buying on a wide scale is an essential pre-

condition for the exploitation of the rural market. It is now unanimously accepted that

the rural salesmanship in India has been insufficient and inadequate and out of

proportion to the agriculture revolution. This calls for strong bias in favour of raising

the rural demand as against the urban demand.

The traditional marketing activities of promotion, distribution, sales and servicing,

undertaken so far in the urban and semi-urban contexts, are to be extended to cover a

much wider area in a rural environment by introducing appropriate innovation,

selection and adoption.

The traditional marketing activities of promotion, distribution, sales and servicing,

undertaken so far in the urban and semi-urban contexts, are to be extended to cover a

much wider area in a rural environment by introducing appropriate innovation,

selection and adoption.

Challenges in Indian Rural market

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

difficulties confronting the effort to fully explore rural markets. The concept of rural

markets in India is still in evolving shape, and the sector poses a variety of challenges.

Distribution costs and non availability of retail outlets are major problems faced by the

marketers. The success of a brand in the Indian rural market is as unpredictable as rain.

Many brands, which should have been successful, have failed miserably. This is

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because most firms try to extend marketing plans that they use in urban areas to the

rural markets. The unique consumption patterns, tastes, and needs of the rural

consumers should be analyzed at the product planning stage so that they match the

needs of the rural people.

Therefore, marketers need to understand the social dynamics and attitude variations

within each village though nationally it follows a consistent pattern. The main

problems in rural marketing are: -

Understanding the Rural Consumer.

Poor Infrastructure.

Physical Distribution.

Channel Management.

Promotion and Marketing Communication.

The major hurdles in tapping the rural markets can be summarized

as: -

High distribution costs.

High initial market development expenditure.

Inability of the small retailer to carry stock without adequate credit facility.

Generating effective demand for manufactured foods.

Wholesale and dealer network problems.

Mass communication and promotion problems.

Banking and credit problems

Management and sales managing problems

Market research problems

Inadequate infrastructure facilities (lack of physical distribution, roads

warehouses and media availability)

Highly dispersed and thinly populated markets

Low per capita and poor standards of living, social, economic and cultural

backwardness of the rural masses

Low level of exposure to different product categories and product brands

Cultural gap between urban-based marketers and rural consumers

The development of the rural market will involve additional cost both in terms of

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promotion and distribution. In rural marketing, often it is not promotion of a brand that is

crucial, but creating an awareness concerning a particular product field, for instance,

fertilizers and pesticides. Urban and semi-urban based salesmen are not able to tap the full

potential in the villages. Here, it may be suggested that the marketers may select and

employ the educated unemployed from villages.

Methods Followed Traditionally

Traditional methods of rural marketing make an interesting study and they ought to be

analyzed carefully to draw relevant conclusions. Conventionally, marketers have used the

following tools to make rural inroads:-

Use of few select rural distributors and retailers to stock their goods but no direct

interaction with prospective consumer.

Use of print media or radio but no alternate form of advertising for promoting their

brands.

More focus on price of product but less attention devoted to quality or durability.

Same product features for urban and rural setting with no customization for rural

areas despite differences in the market environment.

Low frequency of marketing campaigns.

Little uses of village congregations like haats and melas to sell the products.

More focus on men as decision makers and buyers.

Strategies for Rural Marketing

The past practices of treating rural markets as appendages of the urban market is not

correct, since rural markets have their own independent existence, and if cultivated well

could turn into a generator of profit for the marketers. But the rural markets can be

exploited by realizing them, rather than treating them as convenient extensions of the urban

market.

Marketing Strategy

Marketers need to understand the psychology of the rural consumers and then act

consequently. Rural marketing involves more exhaustive personal selling efforts

compared to urban marketing. Firms should abstain from designing goods for the urban

markets and subsequently pushing them in the rural areas. To effectively tap the rural

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market, a brand must associate it with the same things the rural folks do. This can be

done by utilizing the various rural folk media to reach them in their own language and

in large numbers so that the brand can be associated with the myriad rituals,

celebrations, festivals, "melas", and other activities where they assemble.

Distribution Strategy

One of the ways could be using company delivery van which can serve two purposes -

it can take the products to the customers in every nook and corner of the market, and it

also enables the firm to establish direct contact with them, and thereby facilitate sales

promotion. Annual "melas" organized are quite popular and provide a very good

platform for distribution because people visit them to make several purchases.

According to the Indian Market Research Bureau, around 8000 such melas are held in

rural India every year. Rural markets have the practice of fixing specific days in a week

as Market Days called "Haats' when exchange of goods and services are carried out.

This is another potential low cost distribution channel available to the marketers. Also,

every region consisting of several villages is generally served by one satellite town

termed as "Mandis" where people prefer to go to buy their durable commodities. If

marketing managers use these feeder towns, they will easily be able to cover a large

section of the rural population.

Promotional Strategy

Marketers must be very careful while choosing the mediums to be used for

communication. Only 16% of the rural population has access to a vernacular

newspaper. So, the audio visuals must be planned to convey a right message to the rural

folk. The rich, traditional media forms like folk dances, puppet shows, etc., with which

the rural consumers are familiar and comfortable, can be used for high impact product

campaigns. Radio is also very popular source of information and Entertainment, Adds

on radio can also be a helpful tool for marketers.

Some other Strategies to be followed in Indian Rural Market-

Decentralizing rural markets by detaching them from the urban bases. A give-

and-take two-way approach should replace the present one-way exploitation.

The salesman in rural markets should be selected from the educated

unemployed villagers, trained well and appointed as salesmen. The town-to-

villages shuttling salesmen are to be replaced by stationary salesman in villages.

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Companies should also adequately concentrate on educating the villagers to

save them from spurious goods and services.

Rural markets are laggards in picking up new products. This will help the

companies to phase their marketing efforts. This will also help to sell

inventories of products out dated in urban markets.

In rural India, consumers are not brand-loyal, but their purchase patterns can be

termed as “brand stickiness”. So, more brand awareness and presence in the

markets will influence the purchasers.

It is important for any brand to test the campaign before as well as after it is

executed to understand and measure the audience consumption patterns.

Scope of Rural Marketing

1) Population density of less than 400 per sq.km.

2) At least 75% of the male working population is engaged in agriculture.

3) No municipality or board.

If we go by statistics, roughly around 70% of the Indian population lives in the rural

areas. That is almost 12 % of the world population. To expand the market by tapping

the countryside, more and more MNCs are foraying into India’s rural market.

Below are the few points why organizations are looking at rural marketing with a positive

attitude

1. Population

According to 2011 Census rural population is 72% of total population and it is scattered

over a wide range of geographic area. That is 12% of the world population which is not

yet fully utilized.

2. Rising Rural Prosperity

Average income level has unproved due to modern farming practices, contract farming

industrialization, migration to urban areas etc. There has been an overall increase in

economic activities because during the planned rural development heavy outlay of resources

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on irrigation, fertilizers, agricultural equipment’s and agro processing industry has been

made. Saving habits in rural people also has increased. This too contributes in higher

purchasing power

3. Growth in consumption

There is a growth in purchasing power of rural consumers. But, the average per capita house

hold expenditure is still low compared to urban spending

4. Change in life style and Demands

Life style of rural consumer changed considerably. There has been increase in demand for

durables and non-durables like table fans, radios, mopeds, soaps, etc. by rural consumers.

This provides a ready market for the producers. Rural market is expanding day after day.

5. Market growth rate higher than urban:

The growth rate of fast moving consumer goods [FMCG] market and durable market is high

in rural areas. The rural market share is more than 50% for products like cooking oil, hair oil

etc.

6. Life cycle advantage

The products which have attained the maturity stage in urban market is still in growth stage in

rural market.

7. Decision-making Units

Women in rural areas are beginning to make fast decisions for purchases. Studies reveal that

72.3% decisions are taken jointly in a family. With education and mass media, role of

children in decision making is also changing.

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RESEARCH METHODOLOGY

Research Design:

Research design is the plan for collecting the information related to the study. Research

design explains the methods that are used for collecting the information. The research design

will focus attention on the methods that are used for collection of the data.

Data Collection Method:

Secondary Data

The secondary data which is already available was only used to reach the aims and objectives

of this project. These data has been collected from various internet sites, portals and

databases for management like ProQuest and Emerald.

CONCLUSION

Thus, looking at the challenges and the opportunities, which rural markets offer to the

marketers and the manufacturers, it can be said that the future is very promising for those

who can understand the dynamics of rural markets (example companies like HLL,

Cavinkare, godrej have understood the dynamics of rural markets) and make use of them to

their best advantage. A radical change in attitudes of marketers towards the cheerful and

budding rural markets is called for, so they can successfully impress on the 750 million

rural consumers spread over approximately six hundred thousand villages in rural India.

Brands can be successful when they are closely associated with consumers and are

preferred by consumers over unbranded products. Personality factors of the brands give

consumers the means whereby they can make choices and judgments. Based on these

experiences, consumers rely on chosen brands and sense guaranteed standards of quality

and service, which augments consumer trust and brand value.

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Rural Marketing in India - With Special Reference to Agricultural Produce in India. 2015.

Rural Marketing in India - With Special Reference to Agricultural Produce in India.

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