Contents

Introduction 2

Classification of Rural Consumer 5

Profile of rural consumers 6
Characteristics of rural market 8

Challenges of rural marketing 8

The 4Ps of Rural Marketing 11
Opportunities in Indian Rural market 14
Strategies 15

Product item decision 21

Need of rural marketing 22

Problems in rural marketing 22
Suggestions 23
Conclusion 24

Reference 25
Abstract

Indian rural marketing has always been complex to forecast and consist of special
uniqueness. However many companies were successful in entering the rural markets.
They proved that with proper understanding of the market and innovative marketing
ideas, it is possible to bag the rural markets. It is very difficult for the companies to
overlook the opportunities they could from rural markets. As two-thirds of the Indian
population live in rural areas, the market is vast than expected. For the companies to
be successful in rural markets, the companies they have to overcome certain
challenges such as pricing and distribution. They found the way-out for the challenges
to become successful. They believed that it is patience which is important to gain loyal
customers than entering the rural with aggressive marketing. By introducing the
products in to rural markets, companies are not changing customers' tastes and
preferences but their habits which is most challenging and in which case if the
customer is dissatisfied, it will become more difficult to regain the trust or may be
never possible.
Introduction:

What is Rural?
The definition of the word rural in a market like India is very amorphous. There are multiple
versions of the same idea, which are followed by different entities. Even in the rural marketing
space, there is not one concrete definition. Different brands define rural according to their
product and service offerings. In a diverse market like India, which has a population of more
than 1.17 billion people (estimate till July 2009), the urban-rural divide is quite significant.
According to various studies, around 12.2 per cent of the worlds population lives in rural India,
this also indicates that 29 per cent of the worlds rural population lives here
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. So,
from the above stated conditions, there are 6,38,000 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.
But, FMCG and consumer durable companies are considering a territory as a rural market which has
more than 20,000 and below 50,000 population. 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.

Meaning and Definition of rural marketing

The term rural marketing used to be an umbrella term for the people who dealt with rural people in
one way or other. This term got a separate meaning and importance after the economic revaluation in
Indian after 1990. So, before venturing into the other aspects of rural marketing let us discuss the
development of this area in different parts which is briefly explained here.
Part I (Before 1960):
Rural marketing referred to selling of rural products in rural and urban areas and agricultural inputs
in rural markets. It was treated as synonymous to agricultural marketing. Agricultural produces like
food grains and industrial inputs like cotton, oil seeds, sugarcane etc. occupied the central place of
discussion during this period. The supply-chain activities of firms supplying agricultural inputs and
of artisans in rural areas received secondary attention. The local marketing of products like bamboo
baskets, ropes, window and door
frames, small agricultural tools like ploughs by sellers like black smiths, carpenters, cobblers, and
pot makers were emphasized in general. This was totally an unorganized market where all banias
and mahajans (local business people) dominated this market.

Part II (1960 to 1990):

In this era, green revolution resulted from scientific farming and transferred many of the poor
villages into prosperous business centers. As a result, the demand for agricultural inputs went up
especially in terms of wheats and paddies. Better irrigation facilities, soil testing, use of high yield
variety seeds, fertilizers, pesticides and deployment of machinery like powder tillers, harvesters,
threshers etc. changed the rural scenario. In this context, marketing of agricultural inputs took the
importance. Two separate areas of activities
had emerged- during this period marketing of agricultural inputs and the conventional
Agricultural Marketing. During this period, the marketing of rural products received considerable
attention in the general marketing frame work. The formation of agencies like Khadi and Village
Industries Commission, Girijan Cooperative Societies APCO Fabrics, IFFCO, KRIBHCO, etc., and
also the special attention government had paid to promote these products were responsible for this
upsurge. Village industries flourished and products like handicrafts,
handloom textiles, soaps, safety matches, crackers etc. hit the urban market on a large scale from
rural areas.

Part III (After Mid 1990s):

The products which were not given attention so far during the two earlier phases were that of
marketing of household consumables and durables to the rural markets due to obvious reasons. The
economic conditions of the country were as such
that the rural people were not in a position to buy these kinds of products. Secondly, our market was
in a close shape and we never allowed companies (foreign) to operate in Indian market. But we lifted
the and opened up economy, consequently companies started flourishing
in India. The small villages/hamlets were widely scattered making reach difficult and expensive
consequently. Rural markets were seen an adjunct to urban market and conveniently ignored.
However, since 1990s, Indias industrial sector had gained in strength and maturity. Its contribution
to GNP increased substantially. A new service sector had emerged signifying the metamorphosis of
agricultural society into industrial society. Meanwhile, due to the development programmers of the
central and state governments, service organizations and socially
responsible business groups like Mafatlal, Tatas, Birlas, Goenkas and others, the rural area
witnessed an all round socio-economic progress. The economic reforms further accelerated the
process by introducing competition in the markets. Steadily, the rural market has grown for
household consumables and durables. Rural marketing represented the emergent distinct activity of
attracting and serving rural markets to fulfil the needs and wants of persons, households and
occupations of rural people. As a result of the above analysis, we are in a position to define rural
marketing Rural marketing can be seen as a function which manages all those activities
involved in assessing, stimulating and converting the purchasing power into an effective demand for
specific products and services, and moving them to the people in rural area to create satisfaction and
a standard of living for them and thereby achieves the goals of the organization.

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 behavioral 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's 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.
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.

Classification of Rural Consumer

1. Affluent Group:
This group is very small and almost negligible. This group can afford luxury products. E.g. chilly
merchants in Guntur (AP) and wheat farmers in Punjab.

2. Middle Class:
This class is about 300 million in size and continues goes on expanding. It forms the base for
demand of manufactured goods in the country. E.g. jute farmers in West Bengal and sugarcane
farmers in UP.
3. Poor:
This class is about 250 million in size. Their purchasing power is very low. E.g. poorest farmers of jawar
and bajra of Bihar and Orissa

Profile of rural consumers:

IMRB (Indian Market Research Bureau) and NCAER (National Council for Applied Economic
Research) have made available a few studies based on which rural consumers profile can be arrived
at.

Literacy: 23% of rural Indian population is literate and people are getting added to this list
year after year. There are still some villages which are underdeveloped. Maximum education
is primary school or in some cases high school. To this group the marketing promotional
strategy to be adopted is demonstration of product features and advantages. Print media and
posters do not make any impact.
Income: An average rural consumer has a much lower income than his urban counterpart.
The disposable income has increased in the recent years to considerable extent. In spite of
this, the common traits of rural consumers are low purchasing power, low standard of living,
low percapita income and low economic and social positions.
Density: Rural population is scattered across 7 lakh villages. This implies that rural demand
is scattered and urban demand is concentrated.
Influencers: There are many reference groups in a village. These include teacher, doctor,
panchayat members, health workers, bank manager and co-operative board workers. These
influencers need to be kept in mind when a marketer decides on rural marketing.
Occupation: The main occupation is agriculture. The size and ownership of land determines
the basis for differentiation and consumption patterns.
Culture: Rural consumers are traditional in their outlook. They associate faster with messages
that match their cultural behavior.
Language: English is not a language of rural India. Hence a marketer should aim for
communication in the local language.
Media Habits: Television, radio, video and theatre are some of the traditional media that a
rural consumer identifies with.

The above are some of the factors that differentiate the rural consumer from his urban counterpart. A
marketer has to decide on all the above parameters while designing a marketing plan.
Changing profile of rural consumers

Rural consumers as studied are dependent on agriculture and were not very literate about products
and services available. This scenario is slowly changing due to increase in literacy and disposable
income.
Not long ago, rural consumers went to a nearby city to buy``branded products and
services". Only select household consumed branded goods, be it tea or jeans. Earlier, big companies
flocked to rural markets to establish their brands.
Rural markets today are critical for every marketer - be it for a branded shampoo or
a television. Earlier marketers thought of van campaigns, cinema commercials and a few wall
paintings to entice rural folks under their folds. Today a customer in a rural area is quite literate
about myriad products that are on offer in the market place, thanks to television. Many companies
are foraying into the rural markets and educating them on newer products and services.
The rural youth today are playing a far more significant role in influencing the
purchase decisions. They travel frequently out in the village and are the drivers of purchase decisions
regarding radios, television (black and white as well as color), automobiles and other goods. They
may not be the end customers but often are the people who influence the purchase of high value
products and they decide on which brands to choose.
Penetration levels of consumer durables in the rural sector have risen dramatically
in the last decade or so. Even the rural woman is coming out of the closet. She is exercising her
choice in selecting categories - the choice of brands may still be with the males of the household.
The prerogative of making the final purchase decisions stills rests with the chief
male. In other words, the chief wage earner syndrome still applies in the rural markets.

Influencing the rural consumers

The biggest challenge today is to develop a scalable model of influencing the

rural consumers mind over a large period of time and keep it going. This needs to be achieved in a
limited or a reasonable budget. Thats where the marketers who really understand rural markets and
advertising agencies can make a difference and develop a scalable media/communication model.
The mass media has the drawback that the time gap between the point of
exposure and the time of purchase is long. Hence it is difficult to use it in rural communication.

The most important element in rural communications is that the marketer has to integrate 3 things in
communication.

1. Exposure of a message
2. Trial or demonstration
3. Final sale.

There is minimal brand loyalty in rural consumers. This is mainly due to a bigger problem of brand
recognition. There are a lot of looks alike in the rural market. The challenge is to create
communication that would help the rural consumer in recognizing brands, logos, visuals, colors, etc.,
so that he or she actually buys the actual brand and not something else.

Characteristics of rural market:

The rural markets are of diverse nature. There are people from diverse cultural, linguistic and
religious background. No two markets are alike and it is dispersed across India.
Shift towards rural markets are mainly because of saturation and competitiveness of urban
market. Marketers do not want to neglect this huge untapped market.
The incomes of rural customers are also increasing. As seen earlier disposable income of
rural consumers have increased and they spend on FMCG and consumer durables.
Rising literacy has generated a demand of life style products. Lot of youth move out of the
village and visit surrounding cities. They come back and influence decision making.
Cable television has also contributed to an increase in life style. The reach has increased and
marketers are in a position to promote their products much more easily,

Challenges of rural marketing:

The rural market may be attracting marketers but it is not without its problems: Low
per capita disposable incomes that is half the urban disposable income; large number of daily wage
earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests
and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional
advertising media.
However, the rural consumer is not unlike his urban counterpart in many ways. The
more marketers are meeting the consequent challenges of availability, affordability, acceptability and
awareness in rural market.

Availability:
The first challenge in rural marketing is to ensure availability of the product or service.
India's 7, 00,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural
areas, finding them is not easy. They are highly dispersed.
Given the poor infrastructure, it is a greater challenge to regularly reach products to the
far-flung villages. Marketer should plan accordingly and strive to reach these markets n a regular
basis. Marketers must trade off the distribution cost with incremental market penetration.
India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong
distribution system which helps its brands reach the interiors of the rural market. To service remote
village, stockists use auto rickshaws, bullock carts and even boats in the backwaters of Kerala.
Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and
spoke distribution model to reach the villages. To ensure full loads, the company depot supplies,
twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a
week, smaller distributors in adjoining areas.
LG Electronics has set up 45 area offices and 59 rural/remote area offices to cater to these
potential markets.

Affordability:
The The second major challenge is to ensure affordability of the product or service.
With low disposable incomes, products need to be affordable to the rural consumer,
most of who are on daily wages.
A solution to this has been introduction of unit packs by some companies. This
ensures greater affordability.
Most of the shampoos are available in smaller packs.
Fair and lovely was launched in a smaller pack.
Colgate toothpaste launched its smaller packs to cater to the traveling segment and the
rural consumer
Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50- gm
packs.
Hindustan Lever has launched a variant of its largest selling soap brand, Lifebuoy.
Coca-Cola has addressed the affordability issue by introducing the smaller bottle
priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come
from the rural markets. A series of advertisement for this was rune showing people
from diverse backgrounds featuring Aamir Khan.
Acceptability: Next
challenge is to gain acceptability for the product or service.Therefore, there is a need to offer
products that suit the rural market.
LG Electronics have reaped rich dividends by doing so. In 1998, it developed a
customized TV for the rural market named Sampoorna. It was a runway hit selling
100,000 sets in the very first year.
Coca-Cola provided low-cost ice boxes in the rural areas due to the lack of electricity
and refrigerators. It also provided a tin box for new outlets and thermocol box for
seasonal outlets.
The insurance companies that have tailor-made products for the rural market have
also performed well. HDFC Standard LIFE topped private insurers by selling policies
worth Rs 3.5 crore in total premia. The company tied up with

Non-governmental organizations and offered reasonably-priced policies in the nature

of group insurance covers.
Awareness:
A large part of rural India is inaccessible to conventional advertising media. Only
41 per cent rural households have access to TV.
Building awareness is another challenge in rural marketing. A common factor
between the rural and the urban consumer is the interest for movies and music.
Family is the key unit of identity for both the urban and rural consumer.
However, the rural consumer expressions differ from his urban counterpart. For a
rural consumer, outing is confined to local fairs and festivals and TV viewing is
confined to the state-owned Doordarshan. Consumption of branded products is
treated as a special treat or indulgence.
Hindustan Lever has its own company-organized media. These are promotional
events organized by stockists. Godrej Consumer Products, which is trying to push
its soap brands into the interior areas, uses radio to reach the local people in their
language.
Coca-Cola uses a combination of TV, cinema and radio to reach the rural
households. It has also used banners, posters and tapped all the local forms of
entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising
stressed its `magical' price point of Rs 5 per bottle in all media. LG Electronics
uses vans and road shows to reach rural customers. The company uses local
language advertising. Philips India uses wall writing and radio advertising to drive
its growth in rural areas.
Also, in India, the retailers are highly fragmented, highly dispersed. At the same
time, each of these regions serves a large population. The media penetration in
rural areas is only about 57%.
It has been seen that, two out of five Indians are unreached by any media
- TV, Press, Radio and Cinema put together. Hats, mantis and meals are
opportunities.

The 4Ps of Rural Marketing:

Most of the companies treat rural market as a dumping ground for the lower end products designed
for an urban audience. But, this scenario is slowly changing and importance is given to the need of
the rural consumer. Hence it is important to understand the 4Ps of rural marketing with respect to a
rural consumer.

1. Product:

A product is the heart of rural marketing. It is a need satisfying entity to a rural consumer. NCAER
has classified consumer goods into 3 categories. These categories cover most of the products from
Rs. 100 to Rs. 20000 and above.
 Category I Category II Category III
Pressure Cookers 2-in-1 (mono) C TVs (S)
Pressure Pans 2-in-1 (stereo) C TVs (R)
Mono Cassette Recorders B and W TV (S) VCRs/ VCPs
Wrist watches (mechanical) B and W TV (R) Scooters
Wrist watches (quartz) Instant Geyser Mopeds
Radio/Transistors Storage Geysers Motor Cycles
Electric irons Sewing Machines Refrigerators

The hierarchy depends on the needs of the rural consumers. Most of the products under
category 1 are of immediate use to the family. Category 2 products reduce the strain of the
households and also act as a source of entertainment. Category 3 is a combination of means to
supplement income.
Rural branding aims at creating and disseminating the brand name so that it is easily
understood and recognized by the rural consumers.
In rural markets, brands are almost non-existent. They identify FMCG by three things:
1. Color,
2. Visuals of animals and birds and
3. Numbers.
So a 555, 777, hara goli, pila hathi, lal saboon, saphed dantmanjan are the kind of terms with
which they identify brands.
Hence it is very important for us to understand that a lot needs to be done in terms of
communications, media, marketing and branding. There are a number of cases which suggest that to
sell brands in the rural market, it is necessary to simultaneously educate the consumers. If you have
to create brand communication, marketing efforts must be supported by education.

The following have to be kept in mind while the marketer makes a decision on the product.

The product for the rural markets has to be simple, easy to use and provide after sales service
or maintenance.
The product has to be packed for low price and convenient usage.
The pack has to be easily understood by the rural consumer. The information on the pack is
preferred in local language communicating the functional benefit of the product.

2. Pricing
A rural customer is price sensitive and shops for value. This is mainly because of his lower
income levels than his urban counterparts. Hence the marketer has to find ways of making the
product affordable to the rural consumer.
Banks offer loans for tractors, pump sets, television sets and so on to make the product
affordable to a rural consumer.
 Smaller unit packs are preferred in the case of FMCG products to offer at lower prices. The
product packaging and presentation offers scope for keeping the price low. Reusable packs or refills
are also preferred and are seen as value addition.

3. Placement or Distribution:

Distribution of products is one of the biggest challenges of rural marketing. There are CWC (Central
Warehousing Corporation) and SWCS (State Warehousing Corporations) set up in rural areas to
store and distribute products.

A three tier rural warehousing setup exists:

CWC/SWCs
Co-operatives
Rural Godowns

CWC and SWCs reach up to the district levels. The co-operatives are at the mandi level. The Rural
Godowns are at the village level wherein they are owned by panchayat heads. All these tiers provide
warehousing facilities only to their own members. Hence it is a big problem for a company to store
its goods in rural areas.

There are some problems of rural distribution:

Transportation has not been fully developed.

Lack of proper channels of communication like telephone, postalservices, and so on pose a
lot of problem to marketer to service the retailer as it is difficult to the retailers to place order
for goods.
Storage of goods in rural areas is also a problem for the marketers.
Multiple tiers push up the costs and channel management is a major problem for marketers
due to lot of middlemen in the process.
Availability of suitable dealers
Poor viability of rural outlets
Rural outlets need banking support for remittances to principals, get fast replenishment of
stocks, receive supplies through bank and facilitate credit. This gets handicapped due to
inadequate bank facilities.
There are a lot of private shops in the rural sector.

Retailers in rural markets

There are different kinds of retailers.

Shops within the village
 Shops located on the main road and not exactly within the village
Kasba market or the tahsil market.

4. Promotion:
Communication to rural consumer is through organized media. More number of
rural consumer (~70%) listen to radio and many go to cinema. Rural communication can be through
Conventional media or through a nonconventional media. The most common conventional media
include: Print, Cinema, Television and Print. The Non-conventional media include: Theatre, Posters,
Hats and Meals.
The conventional media have excellent reach, less expensive and create a better
impact. But at the same time, it is not customized to each village and also offers unnecessary
coverage at times.
Low literacy rates, culture, traditions, rural reach, attitudes and behavior
are the other problems in rural communication.
An effective promotion should plan for a proper mix of media. This is very important
to create a mind share in the rural consumers. Hence, talking to the customer in a language known to
him, advertising the functional benefits and demonstrating the product go a long way in capturing
the rural market.
The Indian rural market today accounts for only about Rs 8 billion (53 per cent -
FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs
120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way
ahead.
Hindustan Lever is the first company that comes to mind while thinking of rural
marketing. Amul is another case in point of aggressive rural marketing. Some of the other corporates
that are slowly making headway in this area are Coca Cola India, Colgate, Eveready Batteries, LG
Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to
name a few.
Until some years ago, the rural market was being given a step-motherly treatment by
many companies and advertising to rural consumers was usually a hit and miss affair. More often
than not, the agenda being to take a short-cut route by pushing urban communication to the rural
market by merely transliterating the ad copy. Hence advertising that is rooted in urban sensitivities
didn't touch the hearts and minds of the rural consumer. This is definitely changing now but is still a
slow process. The greatest challenge for advertisers and marketers is to find the right mix that will
have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan Ad campaign succeeded in
providing just that.
Corporates are still apprehensive to "Go Rural." Since, the rural consumers are scattered and it is
difficult to predict the demand in the rural market. A few agencies that are trying to create awareness
about the rural market and its importance are Anugrah Madison, Sampark Marketing and
Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M Outreach, Linterland and RC&M, to
name a few. Also, the first four agencies mentioned above have come together to form The Rural
Network. The paramount objective of the Network is to get clients who are looking for a national
strategy in rural marketing and help them in executing it across different regions.
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

Strategy:
Rural Marketing Strategy:

Rural marketing strategy is based on their As Availability Affordability and Acceptability.

The first A-Availability emphasizes on the availability of the product for the customers, i.e., this
gives importance on effective distribution through efficient channels of distribution.
The second A- Affordability which focuses on product pricing, i.e, this gives importance for
smaller packages/pouches easily affordable by families in the rural areas,
The third A Acceptability focuses on convincing the customers to buy the product, i.e.,
extending suitable promotional efforts to influence the customers to buy the product.

Marketers need to understand the psycho of the rural consumers and then act accordingly.
Rural marketing involves more intensive personal selling efforts compared to urban marketing.
Firms should refrain from pushing goods designed for urban markets to the rural areas. To
effectively tap the rural market a brand must associate it with the same things the rural consumers
do.
This can be done by utilizing the various rural folk media to reach them in their own language and in
large number so that the brand can be associated with the myriad rituals, celebration, festivals,
melas, fairs and weekly hats.

Strategies that may be helpful in improving marketing in rural areas are listed below
A. Product Strategies
B. Pricing Strategies
C. Distribution Strategies
D. Promotion Strategies
E. Marketing Strategies
F. Sales Strategies

A. Product Strategies:

1. Small unit and Low price packing:

By making the product available in small and low price packing, a company can attract villagers to
at least try its product because larger pack sizes may be out of reach for rural consumers because of
their price and usage habits. For example: Shampoos, Biscuits.

2. New Product Design:

A company can opt for new product designs or modified designs that are specially meant for rural
areas keeping their lifestyles in view.
3. Sturdy Products:
Sturdiness of a product either in terms of weight or appearance is an important fact for rural
consumers. The product meant for rural areas should be sturdy enough to stand rough handling and
storage. People in rural areas like bright flashy colours such as red, blue, green etc., and feel that
products with such colours are sturdy but they are more concerned with the utility of the item also.

4. Brand Name:
The brand name awareness in the rural areas has fairly increased. A brand name and is very essential
for rural consumers to remember the product.

B. Pricing Strategies:

The pricing strategy for rural market will depend upon the scope for reducing the price of the
product to suit the rural incomes and at the same time not compromising with the utility and
sturdiness of the product.

1. Low cost Products:

This strategy can be adopted by both, manufacturing and marketing men. Price can be kept low by
small unit packing.

2. Simple Packaging:
Sophisticated packing should be avoided and Simple packaging should be adopted to cut down the
cost.

3. Reusable packaging:
Packaging that is reusable and can be refilled attracts the attention of rural buyers. For examples:
Zandu Chyawanprash is providing plastic Containers that can be reused by the consumers.
4. Application of value engineering:
This is a technique which can be tried to evolve cheaper products by substituting the costly raw
material with the cheaper one, without sacrificing the quality or functional efficiency of the product,
for example in food industry, 'soya protein is being used instead of milk protein. Milk protein is
expensive while soya protein is cheaper but the nutrition value is same.

C. Distribution Strategies:

Most of the manufacturers and marketers can arrange for distribution to villages using the strategies
listed below:

1.Using Own Delivery Vans:

One of the way of distribution to rural area can be using delivery vans which can serve two
purposes-it can take product to consumer 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. However, only
big companies can adopt this channel.

2. Annual Meals:
Annual meals organized are quite popular and provide a very good platform for distribution because
people visit them to make several purchases. According to Indian Market Research Bureau-around
8000 such meals are held in rural India every year. Also every region consisting of several villages is
generally served by one satellite town termed as Mandis and Agri-markets where people prefer to go
to buy their commodities. By making product available in these annual Meals, Mandis and Agri
Markets, a firm can cover large section of rural population.

3. Paintings:
A picture is worth thousand words. This way of conveying message is simple and clean. Rural
people like the sight of bright colours. COKE, PEPSI and TATA traders advertise their products
through paintings.
D. Promotion Strategies:
Mass media is a powerful medium of communication and other strategies that can be followed to
promote the product in rural market include:

1. Promoting Products with Indian Models and Actors:

Companies should picking up Indian models, actors for advertisements as this will help them to
show themselves as an Indian company. Shahrukh Khan is chosen as a brand ambassador for MNC
quartz clock maker "OMEGA" even though when they have models like Cindy Crawford.

2. Associating them with India:

MNCs must associate themselves with India by talking about India, by explicitly saying that they are
Indian. M-TV during Independence Day and Republic Day time make their logo with Indian tri-
colour

3. Promoting Indian Sports Team:

Companies may promote Indian sports teams so that they can associate themselves with India. With
this, they influence Indian mindset. ITC was promoting Indian cricket team for years; during world
cup they launched a campaign "Jeeta hai jitega apna Hindustan India India India".

4. Talking about a Normal Indian:

It is a normal tendency of an Indian to try to associate him/her with the product. If he/she can
visualize himself/herself with the product, he /she become loyal to it. That is why companies like
Daewoo based their advertisements on a normal Indian family.

E. Marketing Strategy:

Marketers need to understand the psyche of the rural consumers and then act accordingly. Rural
marketing involves more intensive personal selling efforts as compared to urban marketing. Firms
should refrain from designing goods for urban markets and subsequently pushing them in the rural
areas. To effectively tap the rural 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 number so that the brand can be associated with the rituals, celebrations,
festivals, melas and other activities where they assemble.

F. Sales Strategy:
Rural sales strategy will include hiring employees genuinely like spending time in the rural areas and
who are comfortable with the local language. Marketers can continuously assess all aspects of the
business by interacting with the people and their family members personally, evaluating product
choices for popularity and keeping favorites on the list.

1. Understanding Cultural and Social values:

It is recognized that social and cultural values have a very strong hold on the people. Cultural values
play major role in deciding what to buy. Moreover, rural people are emotional and sensitive. Thus, to
promote their brands, they are exploiting social and cultural values.

2.Changing Perception:
If one go to villages they will see that villagers using Toothpaste, even when they can use Neem or
Babool sticks villagers are using soaps like Nima rose, Breeze, Cinthol etc. even when they can use
locally manufactured very low priced soaps. Villagers are constantly looking forward for new
branded products. What can one infer from these incidents, is the paradigm changing and customer is
no longer price sensitive? They just want value for money.

The other distribution strategies for the rural population are as under:
i. The general insurance companies may promote their policies of health insurance, crop insurance
and vehicle insurance through the existing co-operatives.
ii. Marketers may arrange more number of wave-houses for storage and re-packaging into smaller
pouches for which employing local villages will work profitable and popular.
iii. All communication in the rural areas must be in the regional language and dialects.
iv. Markets need to develop innovative packaging technology which would be economic, protective
and improve shelf-life of goods.
v. In addition to focusing on targeted promotions and advertising, there is an urgent need to work on
economical packaging, dual pricing and special size of PMCQ and household products.
vi. Marketers need to place emphasis on retailers directly rather than depending on the wholesalers
for distribution in the rural market as this has not proved to be very effective marketing channel.
vii. Marketers targeting the rural market should be well aware about the seasonality of the business.
Because the trade is seasonal, employment and disposable income can fluctuate arrange the villages
during the year. This means that business should view market research data that relies on yearly
aggregate statistics with caution.
viii. Marketers must trade off the distribution cost with incremental market penetration.

PRODUCT ITEM DECISIONS:

Product or service is an offer made by marketer that has the ability to satisfy the needs and wants of
customer. Products are physical and tangible. Examples are fertilizers, mosquito repellants,
analgesics and footwear Services are intangible and people-based or equipment Examples is soil
testing, retailer advice, training and health care.

The key consideration in individual product/service offer is developing of the product at three levels.
1. Core product development
2. Tangible product development
3. Augmented product development

NEED OF RURAL MARKETING :

There are many reasons that have urged the Indian companies to enter the rural India. Some of them
are discussed below:
The rural Indian population is large and its growth rate is also high which shows that the
Indian rural market has great potential which needs to be captured.
The purchasing power in rural India is on steady rise and it has resulted in the growth of the
rural market.
The rural audience has matured enough to understand the communication developed for the
urban markets Television has been a major effective communication system for rural people
and, as a result, companies can identify themselves with their advertisements. Socio-
economic changes (lifestyle, habits and tastes, economic status)
Infrastructure facilities such as roads, electricity and media in rural India has improved and it
now becomes comparatively easy to transport goods to rural parts of the country.
 Literacy level among the rural mass is increasing day by day. Rural consumer can
understand the message given by the producers in the advertisements.
Expectations of the people living in rural India have increased manifolds. So. Manufacturers
can capture large market share by meeting the expectations of rural people.

PROBLEMS IN RURAL MARKETING :

The rural market offers a vast untapped potential. It is not that easy to operate in rural market
because of several problems and also it is a time consuming affair and it requires considerable
investments in terms of evolving appropriate strategies with a view to tackle the problems.
The problems are:

Underdeveloped people and underdeveloped markets

Inadequate Media coverage for rural communication
Multi language and Dialects
Traditional Values
Lack of proper physical communication facilities

1. Underdeveloped people and underdeveloped markets:

The technology has tried to develop the people and market in rural areas. Unfortunately, the impact
of the technology is not felt uniformly through out the country. Some districts in Punjab, Haryana or
Western Uttar Pradesh where rural consumer is somewhat comparable to his urban counterpart, there
are large areas and groups of people who have remained beyond the technological breakthrough

2. Inadequate Media coverage for rural communication:

A large number of rural families own radios and television sets. There are also community radio and
T.V sets. These have been used to diffuse agricultural technology to rural areas. However the
coverage relating to marketing is inadequate using this aid of Marketing.

3. Multi language and Dialects:

The number of languages and dialects vary from state to state region to region. This type of
distribution of population warrants appropriate strategies to decide the extent of coverage of rural
market.

4. Traditional Values:
The traditional values and superstitious beliefs of the rural regions seem to be a major hurdle in the
progression of this sector.

5. Lack of proper physical communication facilities:

Nearly 50 percent of the Villages in the country do not have all weather roads. Physical
communication to these villages is highly expensive. Even today, most villages in eastern part of the
country are inaccessible during monsoon season

SUGGESTIONS:
Infrastructure of markets and warehouses should be regulated so as to ensure fair prices.
The arrivals of various products such as Food grains, Vegetables, Dairy products and
Flowers etc. need speedy transport. Therefore, rural roads must be compliment and
coordinate with railways, nearest waterways (port), airports to avid spoiling of such
products.
The efficient marketing and distribution system is necessary to reach ultimate consumer in
the quickest time possible at minimum cost.
The communication systems must be developed to make it appropriate to rural market. If not
possible, communication must be in regional language.
Public weighing machines one in each rural market to ensure correct weightment both for
farm and non-farm arrivals. Storage godowns are also required.
For storage facilities the government should not depend on private agencies to store food
grains (National commission on Agriculture recommended).
The existing marketing staff must be increased and adequate training must be given.
The proper packaging technology must be improved.
CONCLUSION :
The vital role rural marketing have to play in the economic development of a developing
country, is beyond doubt at present. An intensive effort in order to provide the basic
facilities to rural consumers is the need of the hour. Indian rural marketing system should be
made much more competitive by infusing competition within the country and preventing the
external system equation from interfering with the local markets in the larger interests of the
nation.
REFERENCES :

[1] Bharat (2008) Rural Marketing in India-With Special Reference to Agricultural Produce in
India. 123eng.com
[2] Katiyar Ruchi, C.K.Prahalad(2000), Rural marketing: Challenges, Opportunities & Strategies
[3] Kaur Manpreet (2013) Rural Marketing: A Case Study on Hindustan Unilever Limited
International Journal of Applied Research and Studies, Vol.2, Issue 6.
[4] Kotni VV Devi Prasad (2012) Prosoects and Problems of Indian rural Markets Zenith
International Journal of Business Economics and management Research.Vol.2, Issue 3.
[5] MISRA, S.K. (2000). Indian Economy, Himalaya Publishing House, 18th Edition, p. 739 New
Delhi.
[6] priya Lakshmi and Vandana Bajpai , http://conference.aimt.edu.in/mba
[7] Rajendhiran. N, S.Saiganesh,Asha p,Rural Marketing- A critical Review
[8] Rakshit Rajarshi ,M.L.Narasimham,Ashish Gudhe,Kartik Vaddadi (2006) Strategies for rural
marketing by an organization
[9] www.miteshk.webs.com
[10]www.world-agriculture.com