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Rural
Marketing
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The Rural Market Envt.
The Rural Consumer:
The Rural Demand Other Aspects
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The Rural Consumer: A detailed Profile
Size of RCG
Rural population about 73% of total population.
Acc to 2001 census74 crore population
12 crore households70% of total
Location Pattern: A scattered market
Urban population in 3,200 cities
Rural population in 5,70,000 villages
55% - 500
>25% - 200
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Socio-economic Position
Low purchasing power/per capita income
Bounded by tradition, culture, religion &
community.
60% rural income from agriculture
>50% have income < Rs. 25,000About 14% have income >50,000
In recent years, 70 % rural households have started
saving their income. (service class, non-farmers likeshop keepers)
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Culturally a Diverse & Heterogeneous Market
In terms ofreligious, linguistic, social & cultural factors.
State to state variation in extent of development
From study conducted by IMRB (Indian Market Research Bureau)provides development index points for each state on
Health & education
Availability of public transport
Electricity
TV transmission Banks
Post offices
Water supply, etc
Average villages have 33 index points
In Kerala88 index points
Bihar22
UP, MP, Rajasthanclose to 22
Maharashtra, Haryana, Karnataka40-50
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Literacy level: Rural India has literacy rate of 28% compared with 55% of the
whole country.
Scenes have changed since last few years. Literacy rate hasincreased from 20% to 28%.
Every year 8 million people get added to rural India's literatepopulation
Adult literacy programmes have been launched
Lifestyle:
Conservative & tradition bound.
But it has changed to a good extent due to:
Increase in income Growth in education
Enlarged media reach
Growing interaction with urban area
Marketer's effort to reach rural areas
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Buying Behaviour: factors that influence
Literacy level
OccupationSocial & cultural factors
Exposure to media
Exposure to urban lifestyle
Marketers efforts
The way the product is used.
Involvement of others in the purchase
The buying Behaviour has undergone a major
change. There are people in the rural area whose
income has increased & they have the potential to
buy expensive products.
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The Rural Demand:
Some well established products
Pressure cooker
Cooking utensils
Batteries
Cycles, bikes, scooters
Radio/tape
Pesticides, fertilizers
Tea
Toothpowder/paste
Sewing machines
Artificial jewelry
Medicines
Tobacco & products
Bathing soaps, washing
cakes, washing powder
Cell phones
Fans
TV
Wristwatches
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Recent Trends
1. Steady growth2. Welcome change in the composition of Rural
Demand.
Several products already well established in the ruralmarket
In many products, rural consumption accounts for alarger share than urban
In many products, rural market has overtaken the urbanin growth ratedetergent powders, washing soaps,analgesics.
Position of durables - (bicycle53, ceiling fan19,
radio - 42 )
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Who buys the high-priced durables in the rural areas?
NCAER (National Council for Applied Economic
Research) classified durables into 3 categories-
Low priced durableswatches, radios, irons, fans, etc. Relatively higher priced durablesb/w TV, sewing
machines, mixers 2-in-1 music systems.
High aspiration & high pricedcolor TVs, refrigerators,
motorized two-wheelers.
3. Factors behind the Growth & Diversification in
rural demand New income due to agricultural/ rural development
Green revolution since 1970.
New employment, income & purchasing power.
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The expectation revolution
The rising expectations have enlarged the desire &
awareness. Strengthened their motivation to work, earn & consume.
4. Rural demand is more seasonal Agriculture dominates the income source.
Purchasing on marriages & festivals (also the
harvesting time)
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1. The growing opportunity, one main driver -
Rural demand is growing rapidly
Increase in income/purchasing power has increased in access of
products.
2. Heat of competition in the urban market
Growing competition in the urban market
Rural market is largely untapped (advantage to early entrants)
Competition in urban area is tough for products whose
penetration is high. (E.g.toothpaste penetrates to 80% in urban& 30% in rural market)
Brand loyal customers in urban. First time users in rural.
Not competing in the rural market will keep them out of about
half of countrys market
Rural Market Becomes Attractive To Corporates
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Company Rural sales ( % share)
HUL 50Colgate 50
Godrej 30
Cavinkare 33Marico 25
Cadbury 25
Cipla 18
3. Many cos. Have already taken to the rural market in
a big way
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Tapping the Rural Market
Segmentation & Targeting Product Management
Physical Distribution Channel Management
Sales Force Management
Marketing Communications
S i d T i
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Segmentation and Targeting
Geographic segmentation
Climate & level of irrigation Nearness to a feeder town/industrial project
Demographic segmentation
Population concentration Age
Literacy level
Incomeregular income & seasonal income
Buying behaviour segmentation
Sources of data on rural consumersCMIE (Centre ForMonitoring India Economy)
Thompson rural index
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Product Strategy
Whether the product that is sold in the
urban market can be supplied as it is orneed any modification.
Economic and income realities should
be considered.
Lower priced versions do succeed inmany cases but not in all cases.
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1. Specifically designed products
The Tractor/trailer
Evereadys Jeevan Saathi Torch
Model Variants - bikes
Colour VariantsAsian Paints
2. Different products/models, brands, packing,
pricing & positioning
3. Package design & pack size
4. Logos symbols & mnemonics
5. Brand decisions
6. Sell value brands, not cheap brands
7. Preconceived notions have no place
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Physical distribution
PROBLEMS:Transportation & warehousing
Costservice dilemma becomes more acute
transportation & warehousing costs r high
The delivery vanITC & HUL have their own vans.
High costs can be covered if business is good
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Channel management
Problems:multiple tiers add to the costs
Non-availability of dealers
Poor viability of outletsmanufacturer- additionalexpenses & shopkeeper- no returns
Inadequate banking and credit facilities50 villages &
1 bank branch
The village shop is the key to rural distribution
Improving the viability of the outletsdeal in no.
of product lines.
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Sales force management
What a salesman requires to be in rural market
Willingness to be located in rural areas
Cultural congruenceguide in choosing the rightproduct and not forcing to buy everything or anything
Attitude factorssalesman should be patient & shouldhave perseverance.
Knowledge of local language
Ability to handle several product lines
Creativitycreate consumption pioneers & opinionleaders
Managing rural sales forcepractical training to
rural sales force
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Marketing communications
Selecting the media mix
TV
Cinema
Radio
Print media
Outdoor
POPs
Audio-visual/publicity vans
Syndicated AV vans
Puppet shows, Harikatha
Music cassettes
Communication should be uniquely assembled & delivered
Need for creativitybuyers are time consuming
HULs rural communication for surf
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Rural Marketing Is
DevelopmentalMarketing