Rural Marketing 2

SUBMIT TOPROF. Mukesh Ranga

SUBMITTED BYSANDEEP DWIVEDIABDUL NADEEM KHANM.B.E 3rd SEMESTER

RURAL MARKETINGRural marketing is the study of all the Activity , agency and policy involved inThe procurement of farm inputs by the

Farmers and the movement of rural products from farmers to consumers.

_ G.N. MURTHY

NATURE OF RURAL MARKETING

The rural market is quite different from urban markets.Agriculture is the chief economic activity in rural areas, the entire village population is associated directly or indirectly to agriculture.In the process of development of civilization agriculture and pastoral life along river banks are the first of settled life.

Importance of rural marketing Size of rural marketRural target populationEmployment Better living Contribution to national income Increase in farm income

Rural v/s Urban

OCCUPATION:Rural:Cultivators n few non –agricultural pursuits.Urban:manufacturing,trade,commerce,professions

Size of community

Rural:open farms & small community are –vly co-relatedUrban:urbanity & size of community are +vly co-related

Problem and difficulties faced in rural marketing

Lack of proper communicationDistribution problemSeasonal demandLow literacy level

Rural products

Rural products are the results of the art of agriculture and allied activities.

In a narrow sense,rural products refer to the products arising out of the cultivation, namely various crops, vegetables and fruits etc.

Types of rural goods

Industrial goods consumer goods

Industrial goods:-industrial rural goods are those use for further industrial processing. e.g. tabacoo, fibre crops like cotton and jute.

Consumer goods:-goods are mean for direct use like all foodgrains, dairy product, poultry products vegetables and fruits.

Attractiveness of rural market Rural markets have become the new targets to

corporate enterprises for two reasons : 1. Urban market has become congested with

too many competitors. 2. The market have reached a near saturation

point.

Various factors which have made rule markets viable:-

1. Large population 2. Raising prosperity 3. Growth in consumption4. Life-style changes5. Life-cycle advantages6. Market growth rates higher than urban7. Rural marketing is not expensive8. Remoteness is no longer a problem

Now for some facts and figures. 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.Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. Hindustan Lever Limited (HuL) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'.

RURAL MARKETING CHANNELS Marketing channels are routes through which

rural products move from producers to consumersCleary the main challenge that one faces while dealing with rural marketing is the basic understanding of the rural consumer who is very different from his urban counterpart. Also distribution remains to be the single largest problem marketers face today when it comes to going rural. "Reaching your product to remote locations spread over 600,000 villages and poor infrastructure - roads, telecommunication etc and lower levels of literacy are a few hinges that come in the way of marketers to reach the rural market

In 1998 HuL’s personal products unit initiated Project Bharat, the first and largest rural home-to-home operation to have ever been prepared by any company. The project covered 13 million rural households by the end of 1999.During the course of operation, HuL had vans visiting villages across the country distributing sample packs comprising a low-unit-price pack each of shampoo, talcum powder, toothpaste and skin cream priced at Rs. 15. This was to create awareness of the company’s product categories and of the affordability of the products.

Khaitan fans' ad on a horse cart

The greatest challenge for advertisers and marketers continues to be in finding the right mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad campaign succeeded in providing just that.

"Yaara da Tashan...” ads with Aamir Khan created universal

appeal for Coca Cola

"Yaara da Tashan..." ads with Aamir Khan created universal appeal for Coca ColaCoca-Cola India tapped the rural market in a big way when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The company, on its behalf, has also been investing steadily to build their infrastructure to meet the growing needs of the rural market, which reiterates the fact that this multinational has realised the potential of the rural market is going strength to strength to tap the same.

For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in giving the consumers a trial opportunity. While it does help in generate volume but not in terms of values. "Till the time that volume - value equation is managed better. Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactivity.

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.

Interestingly, the rural market is growing at a far greater speed than its urban counterpart. "All the data provided by various agencies like NCAER, Francis Kanoi etc shows that rural markets are growing faster than urban markets in certain product categories at least. The share of FMCG products in rural markets is 53 per cent, durables boasts of 59 per cent market share. Therefore one can claim that rural markets are growing faster than urban markets

Satellite dish antennas reach rural India

In 2000, ITC took an initiative to develop direct contact with farmers who lived in far-flung villages in Madhya Pradesh. ITC's E-choupal was the result of this initiative.

So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by some, but there seems to be a long way for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so back. Things are sure a changing

Typical shop in rural India stocked with sachets, etc