Rural Marketing

Defining Rural & Rural

Marketing
 As per census report 03-04,, there are total 638365
villages in India in which nearly 70% of total
population resides.
 Rural per capita consumption expenditure grew by
11.5% per cent while the urban expenditure grew by
9.6% .
 Rural consumers are keen on branded goods
nowadays, the rural population has shown a trend of
moving to a state of gradual urbanization in terms of
exposure, habits, lifestyles and lastly, consumption
patterns of goods and services.
 Definition: ‘Rural Marketing’ is similar as ‘simply
marketing’. Rural marketing differs only in term of
buyers. Here, target market consists of customers
living in rural areas. Thus, rural marketing is
application of marketing fundamentals (concepts,
principles, processes, theories, etc) to rural markets
 Rural marketing is a process of developing, pricing,
promoting, and distributing rural specific goods and
services leading to desired exchange with rural
customers to satisfy their needs and wants, and also
to achieve organizational objectives.

 Characteristics of Rural Marketing
1.More Prospective-upsurge of employment growth
2.Size-account for about 70% of total Indian Population
3.Nature-Precarious income/literacy levels, Superstitious
4.Response to products-utility, durability and value,
suitability
5.Response to Price-Price sensitive, credit facility
6.Response to promotion-local promotions, personal selling
7.Response to distribution-known retailers, familiar
salesman
8.Predictability-unstable pattern of income level
9.Role of Government
10.Rigidity-illiterate,orthodox
11.High level of Heterogeneity-rich & poor
Distinction between urban and
rural markets
 Although rural markets offer immense potential, marketers
need to recognize the fact that there are considerable
differences in many respects, including the nature,
characteristics buying patterns and behavior of rural
consumers when. compared with their urban
counterparts.
 While the urban economy thrives mainly on secondary and
tertiary activities such as manufacturing and services, the
rural economy is driven mainly by primary activities such
as agriculture, fishing and forestry.
 The consumer demand and consumption patterns also differ
across rural and urban areas, in many products, rural
consumption now accounts for a larger share than urban.
In washing soaps (cakes/bars), the rural share is over
60%. In popular bath soaps, it is more than 50% and in
batteries , it is more than 56%. Similar is the case with
packaged tea and hair oils.
 Owner ship of Dur ables by Rur al
Product
Consumer s No. of owners per 100
households
Bicycle 53

Fan (Ceiling) 19

Fan (Table) 13

TV (B&W) 16

Pressure Cooker 13

Wristwatch 76

Radio/Transistor 42
 Who buys the High-Priced Durables in the Rural Areas?

Occupation Weight age in Contribution Contribution Contribution

Category
Owner rural
34 to
33 TV to
33 two- refrigerator
31
farmer households ownership wheeler ownership
Shopkeeper 8(%) 14
(%) 16
ownership 20
(%)
Service 13 31 39
(%) 40
Player
Agriculture 20 6 3 2
worker
Unskilled 17 9 4 5
non-
Artisans 6 6 4 2
agriculture
Others
labour 2 2 1 1
 There are also differences in rural literacy and
education levels; In Pakistan the rural and urban
literacy levels are 33.64% and 63.08% . In
Bangladesh it is 33.45 and 51.75 and in India it is
58.7% and 79.9% respectively.
 Pattern of income levels in rural markets is yet
another differentiating factor that affects the buying
power and consumption behaviour of rural
consumers. About 80% of the rural households in
India for instance, have a monthly income of less
than Rs.3000. It is estimated that only 15% of the
rural population in India owns a table fan and about
9% own two wheelers.
 Government initiatives has led to improvements in
rural literacy levels in the last few years, in India
from 36% in 1981 to 59% by 2001.
 Likewise it is expected that by the year 2015 about
70% of the villages would be accessible by road.
Villages with a population of over 500 people have
telephones with subscriber trunk dialing
Modifying marketing-mix for
rural markets
 Success of any business enterprise depends on
marketing-mix. These four elements are like
powerful weapons in the hand of manager to
defend his market and/or attack on rivals.


 Behaviour of rural consumers is different and less

predictable, the manager has a challenging task
to design marketing mix strategies for the rural
segments. Due to considerable level of
heterogeneity, a manager needs to design tailor-
made programme to cater tailor-made
programme to cater needs and wants of specific
groups.
 Dynamics of Rural Markets differ from other
market types, and similarly rural marketing
strategies are also significantly different from
marketing strategies aimed at urban or
industrial consumers.
1)Product Mix :


 Product is a powerful determinant of firm’s success.

The products must be suitable to rural
customers in all significant aspects. The
company must produce product according to
present and expected state of rural buyers.


 Product features (size, shape, colour, weight, etc),

qualities, brand name, packaging, labeling,
services, and other relevant aspect must be fit
with needs, wants and capacity of buyers.
Product must undergo necessary changes and
improvements to sustain its suitability over time.
 Economic and income realities of the market should certainly
be considered while developing the product strategy for the
rural market. In addition, socio-cultural realities should also
be considered. When products are designed reflecting both
these influences, the chance of success is greater.
 Specifically-Designed Products do help in many cases;
◦ The Tractor/trailer
◦ Eveready’s Jeevan Sathi Torch
◦ Titan-Sonata watches
◦ Model Variants
◦ Colour Variants


 PRICE MIX
◦ Rural customers are most price-sensitive and, hence, price
plays more decisive role in buying decisions. Pricing
policies and strategies must be formulated with care and
caution.
◦ Price level, discounts and rebates, credit and installment
facilities, and so on are important considerations while
setting and altering prices.
 ◦ Lower-priced product version do help in many cases in
the rural market, but no generalization can be made
in this regard.
◦ Many companies try to reduce the prices of their
products for the rural market by creating smaller size,
or by decreasing the quality. The approach works
sometimes and with some products, but not all times,
with all products.
◦ While brands specifically developed for the rural market
and low-priced variants may work better in many
cases, the strategy should be one of selling value
brands, not cheap brands.
◦ Example: Phillips, Atlas Cycle, Honda Motor Cycle and
Lifebuoy.
◦
 Promotion mix:
◦ The promotion strategies are of paramount importance.
◦ The television advertisements can lure rural masses,
and they are sure it reaches the target audience,
because majority of rural India possesses and is glued
to TV sets.
◦
◦ The method of promotion needs to be tailored to suit
the expectations of the market. Van/vehicle
campaigns edutainment films generating word of
mouth publicity through opinion leaders, colourful wall
paintings etc. techniques have been proved effective.
◦ Similarly, puppet-shows, dance, dramas, and
mythological songs specially developed for product-
promotion purpose, are now being used in rural
markets.
◦ Music cassettes are another effective medium for rural
communication. It is an appealing medium and a
comparatively less expensive medium.
◦ Opinion leaders play a key role in popularizing products
and influencing rural markets. Nowadays, educated
youth of rural youths also influences the rural
consumers. Rural consumers are influenced by the life
style they watch on TV or through movies.
 PLACE MIX:
◦ Distributing small and medium sized packets through
poor roads, over long distances, into deep pockets of
rural India and getting the stockiest to trust the
mobility is a herculean task.
◦ Choosing suitable mode of transportation, locating
warehouses at strategic points, sufficient points,
sufficient insurance, maintaining adequate inventory,
maintaining sufficient number of retail outlets at
different regions and deploying specially trained sales
force are some of the critical decisions in rural
distribution.
◦ For service marketing, employees of rural branches and
agents can do better jobs. Banking, insurance,
investment, satellite and cable connection, cell phone,
auto sales and service etc, the market is booming in
villages of some states. Service industries are trying
to penetrate the rural segments by deploying
specially trained employees and local agents.