Rural Market & Indian

Economy
Marketing Channels
Business models
Capturing the left out areas
What is rural market ?
Difference b/w rural an urban market ?
• The concept of Rural Marketing in India
Economy has always played an influential role in
the lives of people. In India, leaving out a few
metropolitan cities, all the districts and industrial
townships are connected with rural markets.

• The rural market in India is not a separate entity in

itself and it is highly influenced by the sociological
and behavioural factors operating in the country.

• The rural population in India accounts for around

627 million, which is exactly 74.3 percent of the
total population.
• Rural Marketing in India Economy covers two broad
sections, namely: -

• Selling of agricultural items in the urban areas

• Selling of manufactured products in the rural
regions.

Scope :

• The rural market in India is vast and scattered and

offers a plethora of opportunities in comparison to
the urban sector.

• The social status of the rural regions is precarious

as the income level and literacy is extremely low
along with the range of traditional values
The steps taken by the Government of India to
initiate -

• Proper irrigation

• Infrastructural developments

• Prevention of flood

• Grants for fertilizers

• Various schemes to cut down the poverty

FMCG
Income wise distribution

• India is now seeing a dramatic shift towards

prosperity in rural households.

• NCAER projections, by 2009 – 10, the lowest

income class (i.e.Rs.2500 and below) will shrink by
more than 60%

National Council of Applied Economics and Research

Growth Market

What is rural market comprises of :-

Effectiveness of communication
• A rural consumer is brand loyal and understands
symbols better.

• 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 mass.

• Advertisements touching the emotions of the rural

folks, it is argued, could drive a quantum jump
in sales.
Challenges :

• The biggest mistake a FMCG company can make

while entering the rural India is to treat it as an
extension to the existing urban market.

•The rural Indian consumer is economically, socially,

and psychographically different from his urban
counterpart

• The kind of choices that an urban customer takes

for granted is different from the choices available
to the rural counterparts.

• Low disposable incomes

Case of COSMOS
• Cosmos Ignite has developed cheapest solar
charged lamps.

• Gives 50 times brighter light than a kerosene lamp

 and can also provide power for water purification,
 radios, mobile phones and even fans and insect
 exterminators.

• Plan to market these lamps to rural poor of India.

If market channel can help achieve
its goals??
Factors Affecting Market Channel
 Customer Financing
 BUSINESS STRATEGY:- Segmentation of Rural
India on the basis of access to electricity, income
levels and geographical locations.
 MARKETING STRATEGY:- Target “Higher
disposable income”.
 Product
 Price
 Promotion
 Place
COMPETITIVE STRATEGY

 Framework to assess marketing channels

 Sales via microfinance institutions
 Sales via mobile handset distribution channel
 Sales via Mobile network operators ‘ Distribution
channel
 Small independent networks
 Direct Sales to large donor organizations, CSR,
Governments to support the poorest
 Direct sales to smaller (donor) organizations
 Regarding location
 Telecom
Rural Telecom Poised for Explosive Growth
Opportunities
Disposable income in rural areas are
increasing.

With the increase in agricultural income

and improving standards Indian Rural
market is becoming a large untapped
market.
 Itis expected that of the next 250 million
Indian wireless users, approximately 100
million (40 percent) will be from rural areas.

 Operators have demonstrated they achieved

profitability in spite of Average Revenue Per User
(ARPU) of less than $6 per month by reducing
fixed costs.

 Operators are driving down the handset costs to

aid access in rural areas.
Bangladesh – Grameen Phone

Use of GSM Technologies.

Effective use of the Microfinance network
for promoting Grameen Phone.
Significant subsidy being given to the
service
Philippines – Smart Communications

Use of Innovative over the air payment

system to overcome the availability
problems
Developed smaller options of recharge
Use of used handsets reduced barriers to
ownership.