Rural Marketing

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UNIT: 1 RURAL MARKETING

Definition:Rural marketing can be defined as a function which manages all those
activities in asserting, stimulating and converting the purchasing power of rura
l people into an effective demand for specific products and services and there b
y achieving the goals of the organisation.
Rural areas:Rural areas are large and isolated areas of an open country with low
population density a country side refers to rural areas that are open.
Q1. Explain the nature and scope of rural marketing?
Ans: Meaning of Rural marketing:Rural marketing is promotion of a companys produc
ts in the rural markets by using strategies which differ from that of urban mark
et. The rural market more price sensitive but it has preference quantity.
Nature of Rural market:1. Large, diverse and scattered market:Rural marketing in
India is large, and scattered into a number of regions. There may be less numbe
r of shops available to market products. 2. Major income of rural consumers is f
rom agriculture:Rural prosperity is tied with agriculture prosperity. In the eve
nt of crop failure, the incomes of masses is directly affected. 3. Traditional o
utlook:Villages develop slowly and have a traditional outlook. Change is a conti
nuous process but rural people accept change gradually. This is gradually changi
ng due to literacy especially in the youth who have begun to change the outlook
in the villages. 4. Standard of living and rising disposable income of the rural
customers:It is known that majority of the rural population lives below poverty
line and has low literacy rate, low savings etc. Today the rural customers spen
ds money to get value and is aware of the happening around him. 5. Rising litera
ry levels:It is documented that approximately 45% of rural Indians are literate.
Hence awareness has increase and the formats are well informed about the world
around them. They are also educating themselves on the new technology for a bett
er life style. 6. Diverse socio economic background:http://www.miteshk.webs.com
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Due to differences in geographical areas and uneven land fertility, rural people
have different socio economic background, which ultimately affects the rural ma
rkets. 7. Infrastructure facilities:The infrastructure facilities like warehouse
s, communications systems and financial facilities (or) inadequate in rural area
s physical distribution is a challenge to marketers who has found innovative way
s to market their products.
Scope of marketing:1. Large population:According to 2011 census, rural populatio
n is 72% of total population and it is scattered over a wide range of geographic
area. 2. Rising rural prosperity:Average income level has unproved due to moder
n farming practices, contract farming industrialisation, migration to urban area
s etc. 3. Growth in consumption:There is a growth in purchasing power of rural c
onsumers. The average per capita house hold expenditure is 382 Rs 4. Change in l
ife style:Life style of rural consumer changed considerably. 5. Market growth ra
te 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 pro
ducts which have attain the maturity stage in urban market is still in growth st
age in rural market. 7. Rural marketing is not expensive:To promote consumer dur
able inside a state costs 1 croreRs while in urban areas it will costs in millio
ns.
Q2. What is rural market? Importance of rural marketing ? Ans:Meaning of rural m
arket:On account of green revolution, the rural areas are consuming a large qual
ity of industrial and urban manufactured products. In this context a special mar
keting strategy namely rural marketing has emerged. But often rural marketing is
confused with agricultural marketing The letter denotes marketing of produce of
rural areas to the urban consumers or industrial consumers, were as rural marke
ting involves delivering manufactured or processed inputs or services to rural p
roducers of consumers.
Importance of rural market:1. Large market:http://www.miteshk.webs.com
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Approximately 75% of Indians population resides around 6,38,365 villages of India
spread over 32,00,000 Sq. kilometre 41% of Indians middle class resides in rural
areas. The Indian rural consumer leaves in 6,00,000 villages across the country
and they account for over 70% of population of the country. For several product
categories, rural markets account for over 60% of the national demand. 2. Highe
r purchasing capacity:According to NCAER[National Council for Applied Economic Res
earch]. As per NCAER study there are 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. Because of
this purchasing power of power of rural people is on rise. 3. Market growth:Hariy
ali kissan bajar was set up by sri ram consolidated limited to facilitates scale
of agriculture inputs such as fertilizers, pesticides forming equipment, seeds e
tc. Shakti- though the state governments and NGOS involved in microfinance women
entrepreneurs in villages are identified to act as local distribution and sales
point for HUL products. 4. ITC:Itcs internet enabled rural interface to help scal
e of agricultural outputs is presently operational in 6 states market is growing
at a rate of 3-4% p.a.
Q3. Define size of rural market and discuss? Ans: According to the census of Ind
ia village with clear surveyed boundaries not having a
municipality, corporation or board, with density of population not more than 400
Sq.km and with at least 75% of the male working population engaged in agricultu
re activities would quality as rural. According to this definition there are 6,3
8,000 villages in the country of these 0.5% has a population about 10,000 and 2%
have population between 5,000 and 10,000 around 50% has a population less than
200. Interestingly, the FMCG and consumer durable companies, any territory that
has more than 20,000 &50,000 population respectively in rural market so for them
it is not rural India which is rural. According to the census of India 2001, th
ere are more than 4000 towns in the country. It has classified them into 6 categ
ories around 400 class-I to towns with 1,00,000 and above population, 498 classII towns with 50,000-99,999 population, 1368 class-III towns with 20,000-50,000
population, 1560 class IV towns with 10,000-19,999 population It is mainly the cl
ass-II & class-III towns that markets term as rural.
http://www.miteshk.webs.com
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Demographical details of Indian rural market
About 285 millions live in urban India where as 742 millions reside in rural are
as. The No. of middle income & high income households in rural India is expected
to grow from 46 millions to 59 millions. Size of rural market is estimated to b
e 42 millions household and rural market has been going at 5 times the growth of
the urban market. More government, rural development programs. Increase in agri
cultural productivity leading to growth of rural disposable income. Lowering of
difference between taste of urban and rural customers.
The Indian rural market with its vast size and demand offers great opportunity t
o marketers. Our national is classified in around 450 districts & approx. 6, 30,
000 village which can be stored in different parameters such as literacy level,
accessibility income levels, distance from nearest town etc. The rural market ac
counts for half of the total market for Tv sets, fans pressure cookers, bicycles,
washing soap, tea salt & tooth powder, what is more, the rural market for FMCG p
roduct is growing much faster than the urban market.
Q4. Explain the distinction between rural market & urban market? Ans: Definition
:Rural marketing is similar as simply marketing. Rural marketing differs only in
terms of buyers here, target market consists of customers living in rural areas
.Thus rural marketing is application of marketing fundamentals {concepts, princi
ples, theories etc} to rural marketers. Rural marketing is a process of developi
ng, pricing , promoting and distributing rural specific goods and services leadi
ng to desired exchange with rural customers to satisfy their needs and wants, an
d also to achieve organisational objectives.
Differences between rural marketing & urban marketing:Although rural marketing o
ffer immense potential marketers used to recognise the fact that there are consi
derable differences in many aspects including the nature, characteristics, buyin
g patterns & behaviours of rural consumer when compared with their urban counter
parts. While the urban economy thrives mainly on secondary and territory activi
ties such as manufacturing &service, the rural economy is driven mainly by prima
ry activities such as agriculture, fishing & forestry. The consumer demand and c
onsumption patterns also differ across rural and urban areas, in many products r
ural consumption now accounts for a large share then urban. In in washing soaps
the rural share is over 60%. In popular both soaps it is more than 50% and in ba
tteries it is more than 56% similarly is the case with packed tea & hair oils
5 Aspect Philosophy Demand Competition Urban Marketing&socialconcepts &relationshi

igh Amongunitsinorganized sector Concentrated High High Planned&even Highlevel
Easy Easygrasped Good Yes Wholeseller,retailers, supermarkets,speciality stores,a
re rooms Good High Rural Marketing&socialconceptsdevelopment marketing Low Among
or
Consumers: Location Literacy Income Expenditure Needs Innovations Productawareness

ositioning Usagemethod Qualitypreference Pricesensitive Distributionchannels
Widelyspread Low Low Seasonal&variations Lowlevel Slow Low Lessknown Difficult
oderate Verymuchinrural Villageshops
Transportfacility Productavailability
Moderate Limited
Advertising
Print,audio,visualmedia, outdoors,exhibitionsetc
T.v,radio,printmediatosomeextent
Personalselling Salespromotion Publicity
Doortodoor Contest,gifts,pricediscount Goodopportunity
Occasionally Gifts&pricediscount Lessopportunity
Q5. What are the problems of rural marketing? Ans: The problems of rural marketi
ng are continuing in spite of efforts to improve in a 9th
five year plan. The position is improving but slowly the rural marketer has many
challenges. But the vast & expanding markets call for good marketing strangers
to create win situations to all parties in the chain of rural marketing. The pro
blems of rural marketing are as follows: Under developed people Under develo
arket Improper communication facilities Many languages Vastness & uneven spread
Low per capita income Poor infrastructure facilities Seasonal demand Less distri
bution channel
1. Under developed people:Rural society is found by tradition, old customs, prac
tices etc. The impact of modern science & technology has made very less impact o
f the old beliefs are still continuing. 2. Under developed market:Rural markets
are not developing because of inadequate banking & credit facilities. Rural mark
et needs banks to enable remittance, to transact on credit basis and to obtained
credit support from the bank. At present every 48th village in India only has b
ank. 3. Poor or improper communication facilities:Most villages even today large
ly depends on telegrams and phones for their communication needs print media and
visual media[Television cinema] etc reaches only about 20% of rural Indians. 4.
Many languages:India is a country of many languages. Language becomes a barrier
in effective communication in the marketing efforts. The languages vary from st
ate to state, place to place, district to district there are now 18 schedule nat
ional languages. 5. Vastness & unevenly spread:India is a vast time & major appr
oximately 3214km from North to South &2933km from East to West. Rural market con
sists of approximately 75 cores rural consumers spread across approximately 6,38
,365 villages. Despite the urban migration, the rural areas continue to be the p
lace of living for a vast majority Indians.
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6. Low per capital income:Most farmers has small lands and many villages are bro
ught prone, this result in low per capita income. Low per capita incomeResults i
n low consumption pattern as compared to the urban population. The marketers fac
es challenges in rural marketing to decide about quantities, frequency of distri
butions, package size etc due to the low per capita income of the rural people. 7
. Poor infrastructure facilities:Infrastructural facilities like roads, ware hou
ses, powers etc are inadequate in rural areas. Infrastructural cost are very high
and impact adversely in the rural market activities. 8. Seasonal demand:Rural e
conomic is seasonal, rural people have two seasonal namely khariff&rabi. Village
s have money mostly in this seasons. As village income are seasonal demands are
also.
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UNIT: 2 RURAL MARKETING ENVIRONMENT
Q1. Discuss about the rural marketing environment? Ans:- An environment is that
which surrounds an organization. It was sum total of external factors and made u
p of tangible and intangible factors /both controllable and uncontrollable. Rura
l marketing is basically focused marketing activity of a organization. The envir
onment out lines threats and opportunities of the market. The Rural marketing en
vironment is complex and is changing continuously. The marketing organization sh
ould foresee and adopt strategies to change in requirements in the market. One w
hich doesnt change perishes. An adaptive organization can stand competition or ha
ve a modest growth. An organization which makes its effective marketing plans an
d its own strategies or a creative one will prosper and creates opportunities in
the change in environment. Rural marketing environment changes will be in the a
rea of a) b) c) d) e) f) Social changes Economic changes Ethical changes Politic
al changes Physical changes Technological changes
SOCIAL Sociologicalfactors
Psychological Factors Price
ECONOMIC
Competition
Product&Packaging
Anthropological Factors Consumer Marketing Organisation
Price
Promotion
Technological Place
Ethical
Physical
Political
Figure 1THE MARKETING ENVIRONMENT
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1.SOCIAL CHANGES:1) Sociological factor:The social factor consists of three factors,
Consumer society or the community is important. The consumer life style is influ
enced by the social setup. The social constitution and changes influence custome
r habits, taste, and lifestyles. 2) Anthropological factors:The reasonable cultu
res and subcultures and living patterns influence advertising sales promotion, s
elling strategies and packing. The consumers in east India have different taste.
3) Psychological factors:Consumer behavior attitudes personality and mental make
ups are unique. The study of behavior is vital to evolve marketing mix. 2. Econ
omic factors:1) Competition:A good and healthy competition brings in good and ov
erall improvement in economic activities. It also brings good quality, good quan
tity and price. Consumers:The consumer today is quite knowledgeable and choosy.
His progress and well being should be the aim of any economic activity. Price:Pr
icing is a delicate issue where it should be market friendly, not too high or to
little. The marketers has to keep in mind to get descent returns on investment
and effects of producers and marketers. Ethical forces:Business minus ethical va
lues brings degeneration. In the long run it brings problems. No standardization
, exploitation and falsification are main ethical values in such organization. P
olitical forces:The government polices towards trade and commerce, internal taxa
tion and preferential treatments have a influence on the marketing strategies. T
he marketing environment has to meet the political frame work in which a governm
ent is made to work. Physical forces:The infrastructure availability for movemen
t and storage of goods play an important role in the physical distribution of go
ods and reaching the consumers. Efficient and cheaper logistics helps the market
in a big way. Technological force:The fast changing science and technology give
s a cutting edge to the marketing of products. The changes warrant changes in ma
rketing , inputs and
2)
3)
4)
5)
6)
7)
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strategies. Faster and efficient communication and transport systems have speede
d up marketer. The capital is made to work faster and harder .So in the case wit
h the marketer, He has to use these new marketing tools and facilities in design
ing and implementing his marketing strategies which are adaptive to the change i
n environment and ensure success.
Q2) what are the factors influencing rural consumer behavior? ANS:- The various
factors that affect buying behaviour of in rural India are: 1) Environment of th
e consumer:- the environment or the surroundings in which the consumer leaves ha
s a very strong influence on the buyer behavior. E.g.:electrification, water sup
ply effects demand for durables. 2) Geographic influence:- the geographic locati
on in which the rural consumer is located also speaks about the thought process
of the consumer. For instance, villages in south India accept technology quicker
than in other parts of india.Thus, HMT sells more winding watches in the north
while they sell more quartz watches in the south.
3) Influence of occupation:- The land owners and service can buy more of categor
y2 & category3 durables than agricultural laborers. 4) Place of purchase:Companys
need to access the influence of retailer on both consumers at village shops.
5) Creative use of product:- The study of product and provides indicators to the
company on the need for education and also for new product ideas. E.g.:- godrej
hair dye being used as a pain to the color horns of ox. Washing machine being u
sed for making lassie. 6) Brand preference and loyalty:- the people in rural mar
ket will not give preference for brand products but they give importance for loy
alty of the product. 80% of the sale is branded items in 16 product category. Q3
) what are the factors influencing Rural marketing operations? ANS: - All busine
ss operations revolve around understanding customer needs, desires likes and pre
ference and offering products and services that will give desired satisfaction t
o the consumers. FACTORS INFLUENCING OR CONTRIBUTING CONSUMER BEHAVIOUR:a) Envir
onmental b) Cultural
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c) Social d) Personal e) Psychological a) Environmental :I. Economic factors:The
agricultural and rural development has enabled our country to achieve self suff
iciency in food production and we are now exporting a variety of agricultural co
mmodities to foreign countries. Favorable monsoons during the last 10 years have
let to increase in crop yields and rural income. In addition, diversification o
f a agriculture, development of village industries, migration of rural people in
to cities, remittance of money, family members settled abroad have increased inc
ome level and buying power of villagers. II. Political factors:The government ha
ve taken initiative for economic development of rural areas and have invested he
avily in agriculture, irrigation, electricity, khadi and village industries and
infra structure facilities such as roads, communication, hospitals, school, and
banking. The initiatives certainly let to rural prosperity and opportunities for
the marketers. III. Technological development:The rapid expansion of telecommun
ication facilities and mobile phone has provided opportunities for rural people
to keep in touch with men and markets. Development of TV networks and reasonable
channels has enabled the marketers to pass on message about product and service
s to rural people. In rural areas especially in large villagers and villagers ne
ar to towns and cities, children and youth have accused to information such as j
ob opportunities, national news, weather conditions, bank loans etc..IT and inte
rnet are sure to spread up exchange of information in rural india though at a sl
ower rate compare to urban market Legal :The government has come out with legisl
ative measures to protect the interest of consumers some of the important ones a
re:IV.
a.
Money lenders:The money lenders advance long term loans against security of land
over period of time manipulate the records and seize the land. The government p
rotects the assets of farmers from money lenders.
b.
Consumer protection act:Consumer protection act provides protecting the rights a
nd interest of consumers and we have a quasi judicial machinery operating at 3 l
evels i.e. district forum, state and national forum. V. Cultural factors:http://www.miteshk.webs.com
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a) Culture and sub culture :Culture represents an overall heritage a distinctive
form of environmental adaption by whole society of people culture is a system o
f shared beliefs and customs that influence the behavior of consumers. Tradition
al life, traditional occupation, traditional beliefs are the features of rural l
ife. Culture provides people with a sense of identity and an acceptable behavior
with in a society. Technological advances education and travel have considerabl
e influence on culture and change the rural life style. Culture offers direction
and guidance to the members of a society in all facets of life. It provides met
hods of satisfying physiological, personal and social needs. b) Sub culture:It e
xists within the dominant culture, with its own set of values, beliefs and attit
udes and behavior pattern. The pattern of behavior would vary between north and
south even in rural areas.
c) Social class:Consumer behavior is determine by social class to which they bel
ong and is determine by a combination of factors like education, occupation, inc
ome and assets. It is seen that over a period of 10years there has been consider
able reduction in the per culture of destitute and increase in other social clas
ses in rural areas. This is a positive indication of the growing rural market in
our country. VI. Social factors:a) Family:Family is a group of persons related
by blood, marriage or adoption who reside together. It is basic social group and
consists of individual known as members. The 3rd generation family is very comm
on in rural areas. The head of the family provides economic security to family m
embers. The members of family play different roles such as influencer decider an
d purchaser is the buying process. Personal values, attitudes and buying habits
have been shaped by family influences. Family life cycle also influences. b) Ref
erence group:It includes family and friends with whom an individual interacts on
a face to face basis. Word of mouth communication is a process by which the mes
sages are passed within group from one member to another member. The consumer de
velops positive opinion towards a product or service based on admiration (cricke
t players), aspiration (film stars) or empathy. The consumer thinks that if he u
ses it, it must be good if use it, I will be like him.
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VII. a)
b)
c)
d)
e)
VIII. a)
Personal factors:Age and life cycle:Life cycle of a person began with child birt
h, move to infancy, teenage, adult, middle age, old, and then ends with death. U
nder each stage buying behavior is different. Occupation:About 500 millions of p
opulation depends upon agriculture for a living. Income from agriculture is a se
asonal and therefore demand particularly consumer durables is high during post h
arvested period and festivals. Many farmers have diversified into fish culture a
nd small scale industries in order to reduce their dependence on forming and to
ensure regular income. This leads to increase the demand for consumer durables.
Economic circumstance:-Rural income is seasonal compare to an urban consumer who
receives regular income regarding saving habits, traditionally rural people pre
fer to invest in jewelry and fixed deposits in banks and posts offices. A farmer
would like to invest these funds for development of agriculture and buying land
s. Another interesting observation is that for the same income level, a rural co
nsumer has relatively high disposable income. Life style:Life style studies how
people spend their money and time in day to day activities. The life style dimen
sions are activities and demographic features such as age, gender, occupation, e
ducation, and income. Rural consumes prefer to spend, spare time, in activities.
Such as visiting meals i.e. commodity and religious fairs, companys can use such
meeting places for product promotion. Personality and self concept:Personality
is a unique combination of different individual characteristics. We find that ma
ny individuals are similar in terms of one or more characteristics, but they are
not alike in all characteristics. Personality is a combination of factors such
as sociability, self confidence and dominance. Personality influences in many wa
ys. Psychological factors:Motivation:When a buyer purchases a product or service
, he has a reason. Motive is a strong felling, desire or emotion that makes the
buyer to take decision to buy every human activity is a result of motivation. Ea
ch person is motivated by his needs and satisfaction of one need shows that rura
l consumers are satisfied by meeting the 2needs i.e. physical and security need,
where as urban consumers would like to satisfy social and needs .
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Motives can be also classified as psychological and psychogenic motives. In rura
l areas there exits large population consisting of agricultural laborer, small a
nd marginal farmers, petty traders who have very limited income and their needs
are very basic i.e. food clothing and shelter. b) Perception:All consumers are n
ot alike; they see the world in their own special ways. For instance, all the me
mbers of the family have viewed a particular advertisement in different ways. Th
is is because needs, wants, values attitudes and personal experience vary from p
erson to person. Similarly, consumers perception means what he thinks about the p
roduct, producer or the brand. Consumers action, buying habits, consumption habit
s are based on perception and therefore the motor should have good understanding
of perception of consumers. c) Learning:It is a process of acquiring knowledge
about products, product benefits, method of usage and maintenance and also dispo
sal of the products considering low literacy, low awareness, the marketers have
to educate the consumers through rural- specific promotion media and methods. d)
Belies and attitudes:In general attitude is a state of mind or feeling. Attitud
e indicates our feeling about a product, service, brand and shop whether we are
positively or negatively disposed towards the object or class of objects. Consum
er attitudes or composed of beliefs, feelings and behavior intentions towards a
product, brand or store. Belief may be positive, negative or neutral. The belief
that consumer hold need not be correct. Consumers also hold certain feelings to
wards product and these feelings are based on the beliefs. Examples:1) Many rura
l consumers belief that cool drinks are harmful and they prefer lime juice, butt
er milk etc.. Change of attitudes and beliefs is very low in the case of rural c
onsumers. Once he is convinced, he will continue to use the product and become a
loyal consumer. 2) Majority of lower and middle income group continue to use li
feboy and soap and about 70% of the sales of the life boy is in rural and semi u
rban areas.
UNIT 3, 4 AND 5 COMING SOON
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RURAL MARKET SEGMENTATION
Market segmentation means dividing heterogeneous market into homogeneous sub uni
ts into homogenous sub units here heterogeneous means consider the market as a w
hole and refers mass marketing. Homogeneous sub units means which have similar t
astes and preferences but not the same tastes and preferences. Rural market segm
entation is mainly based on demographic factors. The division is based on the pr
emises the different people have different preferences. The following are the ba
sic market preferences: Homogeneous preferences where consumers have roughly the
same preferences. Diffused preferences where consumers are scattered throughout
the market by their preferences. Clustered preferences were consumers are found
in distinct preference groups.
Degree of segmentation:The segmentation is considered as a process with two pola
r points from zero to complete, four distinct segment approaches are identifiabl
e as follows o.s Type Zero Mass marketing Segment marketing all Identitys people
as a differing group Niche marketing Serves very few groups of people Micro mark
eting Focus individuals are very groups on small
Approach Considers people as a bunch
Mass marketing:In the early period of the 20th century many companies practiced
mass production and mass distribution as economics evolved as economy evolved an
d societies became civilised, consumer choice and requirements came into focus u
ntil now the rural market was considered as homogeneous mass as worse the Indian
market till some 20 years ago. Some companies depend on mass marketing while ma
ny do not.
Segment marketing:The principle of segment marketing rests on the realisation th
at buyers differ in their needs, wants, demands and behaviours. The need for segm
ent marketing arises when
Consumers have become more diverse, sophistically and c
hoosy. Competition has become tuff.
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Niche marketing:A niche is very small group with a different set of traits, who
seek a special combination of benefits. Niche marketing identifies special sub g
roups within larger segments and offers different products and services.
Micro marketing:Micro marketing involves tailoring products and programs to suet
the taste of specific locations and individuals. It includes local marketing an
d individual marketing.
Local marketing:- It involves in the programs to suit th
e taste of specific locations and wants of local groups on a geographical bases.
Individual marketing:- Individual market is customized marketing or one to one m
arketing. Tailoring unitshotels, tourist operators provide individualised servic
es for example building contractors builds houses of flats to specific requireme
nts of customers.
Types of rural market segmentation:Demographic factors:Demographic factors are t
aken into detailed consideration for market segmentation of consumer goods and f
ast moving consumer goods (FMCG). In case of rural marketing i.e. to sell outsid
e goods in rural areas, demography came into the picture. However the categories
are much reduced. Some of the segmentations are as below.
Occupational segmentation(or)sociological segmentation:This segmentation is base
d on economy vice categorisation. This reflects the purchasing power of a farmer
and therefore the purchase power of his family they are Artisans, farm labourer
s Small farmers Tenant farmers Medium level farmers Large farmers Very large far
mers, zamindars
Artisans and others
This covers carpenters, blacksmiths, handy-crafts, people are unemployed.
Tenant farmers
Working on rented land to share the crops with owners of the land.
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Small farmers
Who own small farms are jointly owned farms for getting food.
Medium level farmers
Large farmers(or)rich farmers
Who have large lands and all local leaders they spend types in urban areas and d
oing other occupation.
Very large farmers, land lords(or)zamindars
Zamindars, rich money lenders and business men who owned big size lands and main
tain large size farm labour. Normally they spend time in nearby urban areas with
politicians. From the above the small farmers and tenant farmers will struggle
for basic needs but the medium level farmers struggle for comforts. But the larg
e farmers will not struggle for basic needs and comforts. So the marketers targe
t only large farmers and very large farmers for segmenting the market.
Thomson rural market index(TRMI)segmentation
Hindustan Thomson associates ltd developed a guide to market segmentation in 197
2 and revised it in 1986. They collected data in 335 districts based on 26 varia
bles finally they arrived on 10 selected variables having strong co-relation to
rural market potential.

Agricultural labourers Gross cropped area Gross irrigated area Area under non-fo
od crops pump sets.
Fertilisers consumption
Tractors Rural credit Rural deposits & village electrified. Based on these facto
rs, the districts are classified as A,B,C,D&E. Which are in order of high potent
ial market to low potential market.
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LINQUEST
This method is software developed by initiative media on data along the followin
g parameters Demographic Agriculture Income. Literacy & Civic amends.
As per the product to be launched, the marketer would be interested in certain p
arameters like literacy levels, income levels, bank deposits, accessibility (rai
l, road, and schools etc). in the software the marketer can give weighted averag
e to different factors for Eg:- To launch new audio cassette recorders, paramete
rs could be villages above 1000 population and monthly income 2000 and distance
from nearest towns within 30kms.
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BRANDING:Branding is a practise of giving specified name the specified name crea
tes individuality in the product and it can be easily recognised from rival prod
uct the term brand is broadly applied to all identifying such as trade names, tr
ademarks trade symbols etc e.g.:- pepsi, lifeboy are brand names it is recognisab
le by sight but hes not normally pronounceable. The rural consumer likes to stick
to brands that give value for money
Importance of branding
1. Branded product can be easily recognised by the customer in the retail shop i
t offers protection to the consumer as it identifies the firm behind the product
. 2. Branding enables the firm assured control over market. It creates an exclus
ive market for the product. 3. If a firm has one or more lines of branded goods
it can had a new item to its list easily & the new item can enjoy all the advant
ages of branding immediately.
Characteristic of branding Attributes &benefits:Brands of a product plays an imp
ortant role to attract the rural customers because they mostly believe in the br
ands, just by seeing branded products they will purchase assuming that they will
be satisfied by product.
Values :By seeing the brand the customers will consider the performance of the p
roduct and the safety of the product some customers felt that prestige while pur
chasing the branded products.
Culture:By seeing the brand the customer assumes the product is efficient and th
ey also assumes high quality.
Personality:The person who is using that product
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Types of brands 1. Individual brand name
Each product has a special and unique brand name the manufacturer has to promote
each individual brand in the market separately this creates a practical difficu
lty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chi
k shampoo etc.
2. Family brand name
Family name is limited to one line of a product i.e. products which complete sam
e cycles family brand name can help combined advertising and sales promotion how
ever if one member of the family brand is rejected by the consumers or customers
the prestige of all under the family brand may be adversely affected. The manuf
acturers have to take extraordinary care to guard against the danger family bran
d name enables creation of strong shelf. It helps to secure quick popularity it
is preferable to have separate brands for each product for eg:-amul for milk pro
ducts, pounds for cosmetics etc
3. Umbrella brand name
We may all products such as chemicals, engineering goods, automobiles etc. Manuf
actured by the Tata concerns will have the Tata as one umbrella brand such a dev
ice will also obtain low promotion cost and minimise however experience in any o
f the line of products, a solitary failure may be very dangerous to the rest of
the products sold by a particular business house under umbrella brand.
4. Combination device
Data house is using combination device each product has individual name to indic
ate the business house producing the product eg:- Tata Indica, side by side with
the product image we have the image of the organisation also many companies use
this device profitably.
5. Private or middlemans brand
Branding can be done by manufacturers or distributors such as wholesalers, large
retailers. In India this practise is popular in the wooden, sport goods and sea
rches other industries it helps small manufacturers who have to rely on the midd
lemen for marketing. It is also used by big manufacturers the manufacturer merel
y produce goods as per specifications and requirements of distributors and he ne
ed not worry about marketing. Manufacturers make both national and private or mi
ddleman brands. Consumers of the private or dealers brand.
21
Some of the brand names that have created lasting impact on rural consumers are
aybatteries:Batterywithcatasasymbol Lifeboy Asianpaintsmascot Daburchawanpraka
mul Zandubalm Tatasalt Nirma Textile:Chermas,Kumarshirts.
Q.Explainthebrandawarenessinruralmarketing? Ans:Ruralproductdevelopment:
The rural market is a
eeds of rural market sometimes existing products mighthavetobemodifiedtosuitthe
ingly. Rural product development
eandexpertiseinthisarea.
Ruralbranding: Ruralbrandingbears quitdifferent fromurban branding. The firsts

towardsruralbrandingistosearchandgaininsightintotheworkingofruralmarkets.Based
on campaigns products have to be developed with a lot of rural sensitivity. Rura
ch: rural market behave most differently from urban markets. While many marketer
arket their products in rural areas. Just a hand full of sum only has succeeded
into rural consumer behaviour andsensitivity to their values and beliefs is ess
the rural market research not just gathering data but analyzing them and linking
o promoting their products. Rural communication campaigns communication for rural m
alls for a different kind of outlook. There must be a strong ascent on helping
o message. The entire communication and media strategy has to device a system ba
findings. These have to be developed in the regional languages and set in the l
asier acceptance and reach to the customers. Besides mass and outdoor media rur
22
extravaganza (cultures) like temple, festival, melas, and other events where the v
ometogethercanbeusedforpromotions.
Ruralevents:Intheruralcontext,oneofthebestwaystocapturetheattentionofthe
audience is through event management. Since rural areas have limited venues for e
t,conductinganeventinruralareascanbringagoodresponse..
Rural direct marketing campaigns: Direct marketing is one of the most powerful
ways to meet the targets and buildproduct awarenessaswell as promotion. The suc
marketing campaigns depends on the field workers and their sensitivity and emotion
vitytoruralmarkets.
Data base creation and management: Marketing branding and promotional

activitiesinruralcontextcanbehighlyeffectiveandthereafterhavetocreateadatabase
ata is essential for marketers to reach their target accurately and helps marketi
nicationstrategies.
23
RURAL MARKET SEGMENTATION
Market segmentation means dividing heterogeneous market into homogeneous sub uni
ts into homogenous sub units here heterogeneous means consider the market as a w
hole and refers mass marketing. Homogeneous sub units means which have similar t
astes and preferences but not the same tastes and preferences. Rural market segm
entation is mainly based on demographic factors. The division is based on the pr
emises the different people have different preferences. The following are the ba
sic market preferences:Homogeneous preferences where consumers have roughly the
same preferences. Diffused preferences where consumers are scattered throughout
the market by their preferences. Clustered preferences were consumers are found
in distinct preference groups.
Degree of segmentation:The segmentation is considered as a process with two pola
r points from zero to complete, four distinct segment approaches are identifiabl
e as follows o.s Type Zero Mass marketing Segment marketing all Identitys people
as a differing group Niche marketing Serves very few groups of people Micro mark
eting Focus individuals are very groups on small
Approach Considers people as a bunch
Mass marketing:In the early period of the 20th century many companies practiced
mass production and mass distribution as economics evolved as economy evolved an
d societies became civilised, consumer choice and requirements came into focus u
ntil now the rural market was considered as homogeneous mass as worse the Indian
market till some 20 years ago. Some companies depend on mass marketing while ma
ny do not.
Segment marketing:The principle of segment marketing rests on the realisation th
at buyers differ in their needs, wants, demands and behaviours. The need for segm
ent marketing arises when Consumers have become more diverse, sophistically and c
hoosy. Competition has become tuff.
24
Niche marketing:A niche is very small group with a different set of traits, who
seek a special combination of benefits. Niche marketing identifies special sub g
roups within larger segments and offers different products and services.
Micro marketing:Micro marketing involves tailoring products and programs to suet
the taste of specific locations and individuals. It includes local marketing an
d individual marketing. Local marketing:- It involves in the programs to suit th
e taste of specific locations and wants of local groups on a geographical bases.
Individual marketing:- Individual market is customized marketing or one to one m
arketing. Tailoring unitshotels, tourist operators provide individualised servic
es for example building contractors builds houses of flats to specific requireme
nts of customers.
Types of rural market segmentation:Demographic factors:Demographic factors are t
aken into detailed consideration for market segmentation of consumer goods and f
ast moving consumer goods (FMCG). In case of rural marketing i.e. to sell outsid
e goods in rural areas, demography came into the picture. However the categories
are much reduced. Some of the segmentations are as below.
Occupational segmentation(or)sociological segmentation:This segmentation is base
d on economy vice categorisation. This reflects the purchasing power of a farmer
and therefore the purchase power of his family they are Artisans, farm labourer
s Small farmers Tenant farmers Medium level farmers Large farmers Very large far
mers, zamindars
Artisans and others
This covers carpenters, blacksmiths, handy-crafts, people are unemployed.
Tenant farmers
Working on rented land to share the crops with owners of the land.
25
Small farmers
Medium level farmers
Large farmers(or)rich farmers
Who have large lands and all local leaders they spend types in urban areas and d
oing other occupation.
Very large farmers, land lords(or)zamindars
Zamindars, rich money lenders and business men who owned big size lands and main
tain large size farm labour. Normally they spend time in nearby urban areas with
politicians. From the above the small farmers and tenant farmers will struggle
for basic needs but the medium level farmers struggle for comforts. But the larg
e farmers will not struggle for basic needs and comforts. So the marketers targe
t only large farmers and very large farmers for segmenting the market.
Thomson rural market index(TRMI)segmentation
Hindustan Thomson associates ltd developed a guide to market segmentation in 197
2 and revised it in 1986. They collected data in 335 districts based on 26 varia
bles finally they arrived on 10 selected variables having strong co-relation to
rural market potential.
Agricultural labourers Gross cropped area Gross irrigated area Area under non-fo
od crops pump sets.
Fertilisers consumption
Tractors Rural credit Rural deposits & village electrified. Based on these facto
rs, the districts are classified as A,B,C,D&E. Which are in order of high potent
ial market to low potential market.
26
LINQUEST
This method is software developed by initiative media on data along the followin
g parameters Demographic Agriculture Income. Literacy & Civic amends. As per the
product to be launched, the marketer would be interested in certain parameters
like literacy levels, income levels, bank deposits, accessibility (rail, road, a
nd schools etc). in the software the marketer can give weighted average to diffe
rent factors for Eg:- To launch new audio cassette recorders, parameters could b
e villages above 1000 population and monthly income 2000 and distance from neare
st towns within 30kms.
BRANDING:Branding is a practise of giving specified name the specified name crea
tes individuality in the product and it can be easily recognised from rival prod
uct the term brand is broadly applied to all identifying such as trade names, tr
ademarks trade symbols etc e.g.:- pepsi, lifeboy are brand names it is recognisab
le by sight but hes not normally pronounceable. The rural consumer likes to stick
to brands that give value for money
Importance of branding
1. Branded product can be easily recognised by the customer in the retail shop i
t offers protection to the consumer as it identifies the firm behind the product
. 2. Branding enables the firm assured control over market. It creates an exclus
ive market for the product. 3. If a firm has one or more lines of branded goods
it can had a new item to its list easily & the new item can enjoy all the advant
ages of branding immediately.
Characteristic of branding Attributes &benefits:Brands of a product plays an imp
ortant role to attract the rural customers because they mostly believe in the br
ands, just by seeing branded products they will purchase assuming that they will
be satisfied by product.
Values :http://www.miteshk.webs.com
27
By seeing the brand the customers will consider the performance of the product a
nd the safety of the product some customers felt that prestige while purchasing
the branded products.
Culture:By seeing the brand the customer assumes the product is efficient and th
ey also assumes high quality.
Personality:The person who is using that product
Types of brands 1. Individual brand name
Each product has a special and unique brand name the manufacturer has to promote
each individual brand in the market separately this creates a practical difficu
lty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chi
k shampoo etc.
2. Family brand name
Family name is limited to one line of a product i.e. products which complete sam
e cycles family brand name can help combined advertising and sales promotion how
ever if one member of the family brand is rejected by the consumers or customers
the prestige of all under the family brand may be adversely affected. The manuf
acturers have to take extraordinary care to guard against the danger family bran
d name enables creation of strong shelf. It helps to secure quick popularity it
is preferable to have separate brands for each product for eg:-amul for milk pro
ducts, pounds for cosmetics etc
3. Umbrella brand name
We may all products such as chemicals, engineering goods, automobiles etc. Manuf
actured by the Tata concerns will have the Tata as one umbrella brand such a dev
ice will also obtain low promotion cost and minimise however experience in any o
f the line of products, a solitary failure may be very dangerous to the rest of
the products sold by a particular business house under umbrella brand.
4. Combination device
Data house is using combination device each product has individual name to indic
ate the business house producing the product eg:- Tata Indica, side by side with
the product image we have the image of the organisation also many companies use
this device profitably.
5. Private or middlemans brand
Branding can be done by manufacturers or distributors such as wholesalers, large
retailers. In India this practise is popular in the wooden, sport goods and sea
rches other industries it helps small manufacturers who have to rely on the midd
lemen for
28
marketing. It is also used by big manufacturers the manufacturer merely produce
goods as per specifications and requirements of distributors and he need not wor
ry about marketing. Manufacturers make both national and private or middleman br
ands. Consumers of the private or dealers brand. `1 Some of the brand names that
have created lasting impact on rural consumers are as follows:Every day batteri
es:- Battery with cat as a symbol Lifeboy Asian paints mascot Dabur chawan praka
sh Parle Parachute Amul Zandubalm Tata salt Nirma Textile:- Chermas, Kumar shirt
s.
Q. Explain the brand awareness in rural marketing? Ans: Rural product developmen
t:The rural market is a fast growing one and has a huge population with a great
level of disposable income to encase this; products have to be specifically deve
loped to meet the creeds of rural market sometimes existing products might have
to be modified to suit these markets too accordingly. Rural product development
has a strong edifice on a great deal of research like feasibility, studies, rura
l aspiration and soon. This paves way for a great deal of infra structure and ex
pertise in this area.
Rural branding:- Rural branding bears quit different from urban branding. The
first step towards rural branding is to search and gain insight into the working
of rural markets. Based on this communication campaigns products have to be dev
eloped with a lot of rural sensitivity. Rural market research:- rural market beh
ave most differently from urban markets. While many marketers have tried to mark
et their products in rural areas. Just a hand full of sum only has succeeded. A
strong insight into rural consumer behaviour and sensitivity to their values and
beliefs is essential to upgrade the rural market research not just gathering da
ta but analyzing them and linking the findings to promoting their products. Rura
l communication campaigns communication for rural markets calls for a different
kind of outlook. There must be a strong ascent on
29
helping the target relate to message. The entire communication and media strateg
y has to device a system based on research findings. These have to be developed
in the regional languages and set in the local culture for easier acceptance and
reach to the customers. Besides mass and outdoor media rural extravaganza (cult
ures) like temple, festival, melas, and other events where the villagers come to
gether can be used for promotions.
Rural events: - In the rural context, one of the best ways to capture the attent
ion
of the audience is through event management. Since rural areas have limited venu
es for entertainment, conducting an event in rural areas can bring a good respon
se..
Rural direct marketing campaigns: - Direct marketing is one of the most
powerful ways to meet the targets and build product awareness as well as promoti
on. The success of any direct marketing campaigns depends on the field workers a
nd their sensitivity and emotional connectivity to rural markets.
Data base creation and management:- Marketing branding and promotional
activities in rural context can be highly effective and thereafter have to creat
e a database of prospects. This data is essential for marketers to reach their t
arget accurately and helps marketing plan and communication strategies.
Q) What is meant by Product? And explain it with different strategies in rural m
arket?
Ans: Product is the most tangible and important dingle component of the marketin
g program. Without product, there is nothing to distribute promote and to price.
Product is a vehicle by which a company provides consumer satisfaction. A produ
ct is a bundle of benefits assembled in an identifiable form. In simple terms, p
roducts are anything that satisfies human wants. The product mix includes produc
t quantity, features, benefits, design, style, colors, brand packaging, labeling
, services and warranties.
Product market strategies:Markets have the following alternations to increase ma
rket share and profits Existing product Existing markets New markets Market pene
tration Market development New product Product development differentiation Diver
sification (or) product
It involves expansion of sales of existing products in existing markets by selli
ng more to present customers or gaining new customers in existing market. The fi
rm can market its present products to existing markets. This is done through mor
e aggressive marketing mix.
Market penetration:-
30
In Market development a present product is introduced to a new market or a segme
nt . Market development is the creation of new market by discovering new applica
tion for existing goods. This is another alternative to expand market opportunit
y, prolong product life cycles, profitability and survival. Ex:- many companies
are extending their activities to rural market to increase sales volume of produ
cts like mineral water, chocolate, mobile phones etc. Product development occurs
when a firm introduces new products to a market in which it is well established
. Product development is the introduction of new products in present market. Ex:
- New syntactic fibers are known for textile products. The firm may decide to cr
eate new products for existing market. Diversification occurs when a firm seeks
to enter a new market with completely new product. The innovations are introduce
d for the first time in the new markets. The strategy is risky but the innovator
can have speculator results.
Market development:Product development:Diversification:Product strategies in rural market:markets are given below
product strategies used by companys in rural
most of the rural consumers believe that heavier the item, higher the power and
durability, they prefer tough and long lasting product. EX:- bullet motor cycle
continuous to be popular in villages; royal Enfield sells about 65% of two wheel
ers in semi urban and rural areas; ambassador cars continuous to be popular in r
ural areas. The companys can come out with new Designing products:products or pro
mote existing products to suit field conditions in rural areas. EX: L.G electroni
cs came out with a unique product for rural market. It launched sampoorna Indias
first T.V with a Devanagari script on screen display. Voltas has introduced a r
efrigerator for rural areas direct cold technology keeps the refrigerator cold f
or several hours in case of long power cut. Nokias basic model is dust resistant
and has a mini torch light for using in rural areas. Small unit packing:It has b
een used for money consumer products . Small units packing provide an opportunit
y for the consumers to try the product and help the company to reach consumers l
ike daily wage earners.
Sturdy products:EX:http://www.miteshk.webs.com
31
Ponds has gain market share over the past few years, focusing on rural market an
t it has introduced 20grams talcum powder. Cavin kare studied rural buyer behavi
or and introduced chik shampoo in small sachet of 4ml at a low price of 50ps. Ra
snna is now available in sachet pack priced at 1rupee each and one sachet will m
ake 2 glasses of soft drink Godrej Sara lee has single coiled sachet of goodnigh
t coil for rural products Utility products:The rural people are concerned with t
he utility of the items rather than appearance or show EX:
Philips has introduced free power radio RL117 priced at 995/- for the
first time in India. The radio requires no external batterys or electricity for o
peration.
HMT watches are popular for utility value.
Q) What is meant by pricing and explain factors influencing pricing? Sol:Economi
sts defines price as the exchange value of a product or service always expressed
in terms of money. In simple terms price is the amount charged for the product
or service. To the buyer price is a package of expectations and satisfaction. To
the seller price is a source of revenue and main determinant of profit.
Factors influencing pricing decisions:1.Objectives:- many companies have establi
shed marketing goals or objectives
such as growth in sales, profits, market share and pricing plays a major role in
achieving the objectives.
2.cost of production:-The most decisive factor in
pricing is the cost of production. In the past, fixing of price was a sample aff
air: just add up all the costs incurred and divide the final figure by the numbe
r of units produced. The main defect with this approach is that it disregards th
e external factors, particularly demand and the value placed on goods by the ult
imate consumer. Today on account of the various lines of production as well as d
istributing, the overhead costs finding the cost of production are not simple.
3)Demand:- in the consumer oriented marketing , the consumers influence the
price. Every product has some utility for the buyer. It gives the buyer service,
32
satisfaction, pleasure; the consumer would continue to buy the product. Higher t
he demand for a product, lesser the need for giving additional discounts, credit
, etc.. To the distributors and dealers. This leads to higher price realization.
4)Competition:- another factor that influence pricing is competition. No
manufacture is free to fix his price without considering competition, unless he
has a monopoly. To avoid competitive pricing, a firm may decide that its product
may be sufficiently different from that of the others. This is achieved through
methods of advertising, branding etc.. Sometimes a higher price may itself diff
erentiate the product. This is known as prestige pricing.
5)Distribution channels:- Distribution channels also sometimes affect the
price. There are many middlemen working in the channel of distribution between t
he manufacturer and the consumer. Each one of them has to be compensated for the
services rendered.
6)Supply of the product:-if the supply is less than demand, then the price of
the product will be more.
7)Availability of raw materials:- Availability of raw materials in domestic
markets generally enable the firm to bring down cost of production. The firm can
fix a low selling price.
8)If the brand is very popular among the consumers, then the manufacturer can
charge a higher price for the product.
9)If the purchasing power of the consumer is high, then the company can charge a
higher price for the product.
10) Promotion cost would normally increase the selling price as the company woul
d
like to recover the cost from the consumers.
Q) What is meant by pricing and explain kinds of pricing? Sol:Economists defines
price as the exchange value of a product or service always expressed in terms o
f money. In simple terms price is the amount charged for the product or service.
To the buyer price is a package of expectations and satisfaction. To the seller
price is a source of revenue and main determinant of profit.
Kinds of pricing:http://www.miteshk.webs.com
33
A firm may choose various kinds of pricing for their products:1) odd pricing:odd price may be a price ending in odd number or a price just under a round numb
er. Such a pricing is adopted generally by the seller of specialty or convenienc
e goods.
E.g.. Bata shoes are priced at399.95. Odd price may bring more sales. Under odd
pricing, buyers may feel that it is a mark down price.
2) Psychological pricing:it is stated that there are certain critical points at prices such as 1,2,4,5,10
are psychologically appearing to consumers.
E.g.. Products such as shampoo, chocolates and biscuits are sold at certain pric
e to attract customers.
3) Prestige pricing:- prestige pricing is one that is fixed at a higher price, w
hen
the producers near perfect substitute. Prestige pricing is adopted because many
customers feel that high price means high quality. Moreover the customer heels a
high status at a high price.
4) Consumers expectations:- such prices are fixed by consumers.
Consumers are familiar with the rates and market condition and expect a particul
ar price to be charged for certain products.
5) Geographical pricing:- the distance between the seller and the buyer is
considered on Geographical pricing. When there is lot of distance between produc
tion center and consumption centre, the producer or marketer can adopt different
prices in each area without creating any ill/will among customers. There are tw
o ways of charging transit cost.
a) F.O.B pricing( free on board):- F.O.B may be of two types i) F.O.B origin and
F.O.B destination:- in the first case, the buyers will have
to incur the cost of transit a part from the price quoted and in the latter the
price quoted is inclusive of transit charges.
6)Zone pricing:- price is equal in the same zone. Market for a product is divide
d
into various zones. South zone, north zone etc.. In other words price are unifor
m with in a zone.
7) price lining:- price lining is formed more commonly among retailers than
among wholesaler or producers. This system consists of selecting a limited numbe
r of prices at which the store will sell it goods. E.g. A buyer of shirt can go
into a shop where shirts are retailed between 250/- t 500/-, it also helps the s
hopkeeper to plan his purchases..
34
when a manufacturer sells the same product at two different prices, it is dual p
ricing. Under the dual pricing a producer is required compulsory to sell a part
of production to the govt or its authorized agency at substantially low price. T
he rest of the product may be sold in the open market at a price fixed by the pr
oducers. Eg. Sugar. it is also known as variable pricing. This method is invalua
bly adopted by industrial suppliers. In certain cases, the product may be prepar
ed on the basis of specification or designed by the buyer. In such cases the pri
cing has to be negotiated and then fixed.
8)dual pricing:9)Negotiated pricing:http://www.miteshk.webs.com
35
DISTRIBUTION IN RURAL MARKET
Introduction:The rural consumers normally purchase their household requirements
from village shops, haats and mandi towns. There are 60lakh outlets, both in urb
an and rural markets in India. Out of this, 36lakh retail outlets are spread ove
r 6lakh villages and making the products available in the store shelves is a cha
llenge for the marketer.
Obstacles to reach the rural consumers:1. The distribution chain requires a larg
e number of intermediaries and this increase the cost of distribution. 2. Non-av
ailability of dealers. 3. Poor viability of retail outlets due to low business v
olume. 4. Inadequate banking facilities. 5. Only about 80% of the markets are co
nnected by roads. 6. Interior village roads get flooded during monsoon. 7. Trans
port and communication facilities are generally poor in villages. 8. Credit requ
irement of channel members.
Channels of distribution:Marketing channel is the route taken by the title to th
e product as it moves from the producer to the ultimate consumer. Every marketin
g channel starts with the producer and ends with the consumer. Its a two-way comm
unication. Consumers purchase goods through such channels and producers reach th
e consumers through marketing channels. The channel members consist of wholesale
rs and retailers who are middlemen in distribution and they perform all marketin
g functions.
36
0 level Manufacturer
C&F agent
Retailer
Distributor
C&F agent
RuralDistributor consumer Consumer Retailer Distributor wholesaler
Consumer
Retailer
Retailer
Consumer
Consumer
1. Manufacturer- Consumer(Direct sale):In this case, the stocks are directly
supplied to the ultimate consumer avoiding middlemen and their commission. This
benefits the consumer as well as the seller.
Examples:in many states, the government has encouraged farmers to sell
vegetables directly to urban consumers by setting up farmers market. These markets
are known as Rythu Bazzars (Andhra Pradesh) and vivasayigal santhai (Tamilnadu)
. These markets are run by government and only farmers are allowed to sell the a
gricultural produce to the consumers in the market. The market works both in the
morning and evening hours. The market committee in consultation with farmers fi
xes the rates for different commodities. The farmers come from about 25 villages
surrounding the city and are allotted stalls by the market committee. The marke
t committee also provides cold storage facilities for perishable commodities.
2. Manufacturer- Retailer-Consumer:Here, the stocks are sold to the consumers th
rough a network of retailers.
Examples:- Mahindra and Mahindra tractors have appointed dealers in important ru
ral
markets. A dealer either covers one district or two three tehsils. The company ar
range for supply of tractors to these retailers from their manufacturing unit. T
he dealer looks after sale and service of tractors.
37
3.Manufacture-distributor-retailer-consumer:The manufacturer appoints distributo
rs in key rural markets and these distributors cater the needs of retailers in v
illages. This is a popular channel option used by manufactures.
Examples:- Manufacturers of tea, coffee and branded oil, appoint distributors in
district/
taluka headquarters and distributors service the retailers in villages.
4.Manufacturer-company-depot/C&F agent-Distributor-Retailer-Consumer:In this cas
e, the manufacturer moves the stocks to company depot/depot operated by a C&F ag
ent and from these depots, stocks are supplied directly to distributors, who in
turn service the retailers.
Example:- Agro-chemical companies like Syngenta, are using two/three intermediar
ies to
reach the farmers in remote villages.
5.Manufacturer-company-depot/C&F agent-Rural Distributor-WholesalerRetailer-Cons
umer:The manufacturer opens his own depots or appoints
C&F agents in state capital or in key cities in each state. The C&F agent, suppl
y stocks to rural distributors. From the rural distributors, the stock move thro
ugh wholesalers and retailers to reach the ultimate consumers.
Examples:- Distribution of consumer products by companies like HUL, Dabur, Nirma
, Parle,
Marico in rural market.
Physical distribution:Physical distribution activities include order processing,
handling of goods, packaging, ware housing, transportation, inventory control,
banking and customer service. Considering the constraints in physical distributi
on of stocks in rural areas, many companies have come out with innovative soluti
ons.
1) Company owned delivery vans:The van may be owned by the company or distributor. The delivery van takes the p
roduct to the retail shops in village. The
38
distributors salesperson travels in the van and he delivers the stocks to the re
tailer and collects the money too.
Examples:Bharat petroleum has introduced rural marketing vehicle(RMV) way
back in 1999 in Punjab. The vehicle moves from village to village and fills LPG
cylinders on the spot to rural customers.
2. Hired vans:- In this case, the wholesaler uses a hired vehicle to cover the r
etailers in
villages. Normally, the cost of operation of the hired vehicle is shared between
the wholesaler and the company.
Examples:- (a) HUL distributors use hired vehicle to reach the rural retailers.
(b) Syngenta distributors use hired vehicles for delivery of pesticides as well
as for collections.
3.bullock carts or camels:- these are used for covering remote villages with no
motor
able road. In certain parts of Kerala, A.P and Westbengal, boats also used to co
ver villages that are not connected by roads.
4. Syndicate van distribution:In this case, the firms/distributors selling non-competitive
consumer goods come together to service the rural retailers. The delivery van ca
rries the product of both the companies.
Example:- A firm manufacturing edible oils and another local firm dealing in bis
cuits,
namkeen and Atta could jointly service rural retailers, through van operation.
Conclusion:The rural markets and the consumers are scattered over a wide
geographical area. Considering low income of consumers, low density of
n, poor condition of roads, it becomes a difficult and uneconomical to
lly service all the villages. The marketers have to follow a selective
based on market potential in developing a network of distributors and
in rural markets.
populatio
individua
approach,
retailers

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1

UNIT: 1 RURAL MARKETING

5 Aspect Philosophy Demand Competition Urban Marketing&socialconcepts &relationshi

Consumers: Location Literacy Income Expenditure Needs Innovations Productawareness

Ruralbranding: Ruralbrandingbears quitdifferent fromurban branding. The firsts

Data base creation and management: Marketing branding and promotional

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