Some Myths about rural markets

Myth
1-Rural
Market
is
a
homogeneous massIn reality it is a heterogeneous market.
various tiers which present on the incomes
like land lords, traders, small farmers,
marginal farmers, labours, artisans, and
state wise variations in rural demographics
are present viz literacy (kerala 90%,Bihar
44%) & population below poverty line is
(orissa 48% Punjab 6%)

Myth 2-Disposable income is low

In reality nearly 50% of very Rich plus well off
households in rural India.
(million)

(million)

(million)

Demographic classification

Urban

Rural

Total

Very Rich greater than10Lakh P/A

4.84

1.32

6.16

Well off greater than 5Lakh P/A

29.45

27.36

56.81

Total

34.29

28.68

62.97

% of total

54%

46%

100%

Myth 3-Individuals decide about

purchases
In

reality decision making process is

collective purchase processinfluencer, decider, buyer, one who
pays all may be different. so
marketers may must address brand
message at all levels.

Urban

What makes Rural Markets

attractive ?

Markets are becoming increasingly complex, competitive &

saturated
A huge

people.

untapped Market.-6 lakhs villages with 700m

The

rise in disposable income of the rural families

Increase in literacy level as a result increase in wh
collar jobs in nearby towns & cities means more
disposable income. (Airtel ad - Baba, ghabrana ma
Is bheed mein, main khounga nahin )
Revolution

dhabas

in the Information Technology- sanchar

Some impressive facts about the

rural India

There are 42,000 rural super markets (haats) in

India that exceed the total number of retail chain
stores in the united states(35,000)

In the year 2001-2002 the LIC sold 55% of its

policies in rural India.

Of the 20 lakhs BSNL mobile connections 50% are in

small towns & villages.

The billing per cell phone in small towns in Andhra

Pradesh is higher than the billing in the state capital.

CONT_ _ _ _

Some impressive facts about the

rural India

Of the 2 crore who have signed up for

rediffmail,60% are from small towns.of the
one lakhs who have transacted on the rediff
shopping site 50% are from small towns.

Internet access in semi urban & rural areas

has increased through the sanchar dhabas
of BSNL operating in 3617 out of 6,332
blocks in the country.

The 41 million kisan credit cards issued in

rural India exceed the 40 million credit plus
debit cards issued in urban India.

Classification of Indian Economy

1.Crop Cultivation
2.Animal Husbandry
3.Dairying
4.Fisheries
5.Poultry
6.Floriculture
7.Horticulture

1.Industry-Cottage & village industry

(khadi, Handloom, Crafts)
2.Business-Small shops, petty traders
3.Services-communication,Banking,
Insurance, Education, Tailoring etc

Evolution of Rural Marketing

Phase-1(Before the 1960s)

Agricultural produces like food grains &

industrial inputs like cotton & sugar cane
were the primary products which were
marketed
During
this
period,
Scope
for
farm
mechanization equipment (Tractors, pump
sets) & agricultural inputs like fertilizers,
seeds & pesticides were very limited.
As the rural economy was in primitive stage,
Marketing of products made by skilled
workers in rural areas was an important
activity.

Phase-II (1960s-1990)

The green revolution changed the face of

rural india
by using scientific farming
practices with the advent of agricultural
inputs & implements.

During this period apart from conventional

agricultural marketing
a new area of
marketing of agricultutural inputs emerged.

During this period the marketing of rural

products received considerable attention
through
agenciee
likr
handicrafts
emporium.

Phase-III (After-1990s)
As a result of Indias industrial sector
gained strength & maturity signifying the
transition of agricultural society into an
industrial one.
The increased efforts of central & state
government for rural development
witnessed socio economic progress.
All these factors resulted in the growth of
rural markets for house hold consumables
& durables.

Government Policies for rural

reforms

Pradhan
Mantri
gramodaya
yojana
-announced in 2002 fund of 5000 crores
sanctioned out of which 50% for roads &
rest for house, water, sanitation.
Pradhan Mantri gram sadak yojana
Pradhan mantri Rojagar yojana.-To provide
skill based training & credit.
National housing & habitat policy-aimed at
providing for all.
Swarna jayanti gram swarojagar-on going
programmes for the self employment of
poor.

Definition of Rural Marketing

According to the national commission on agriculture rural

marketing is a process which starts with a decision to
produce a saleable farm commodity & it involves all the
aspects of market structure & includes pre & harvest
operations, assembling, grading, storage, transportation &
distribution.

As per Thompson The study of rural marketing comprises

of all the operations & the agencies conducting them
involved in the movement of farm produced food, raw
materials such as textiles, from the farms to the final
consumers & the effects of such operations on producers,
Middlemen & consumers.

The above two definitions concentrates on goods from rural

to urban.

Rural Marketing is a two-way marketing process. Its

content now encompasses inflow of products into rural
areas for production or consumption purposes & also
outflow of products to urban areas.

To Rural

To urban

From Urban

1.Consumable & durable agricultural

inputs.
2.Consumables like soaps, detergents,
cosmetics, beverages etc
3.Consumer durables like Mopeds,
television sets, Electrical goods & more.
Agricultural
inputs like fertilizers,
pesticides, seeds, Tractors, Power tillers
etc.

From Rural

Rural artisans services & products 1.Agricultural

&
allied
(bamboo
baskets,
ropes,
small
production
agricultural tools & aluminum utensils. (Food grains, oil seeds,
Rural artisans like blacksmiths,
cotton ,sugarcane &
carpenters & cobblers cater to the
others are consumed by
professional & household needs of the
urbanites
after
due
rural people.
processing.
2.Rural artisans & rural
industry products.
Handloom textiles, cottage
industry products like
agarbathi,
safety
matches & others.

Challenges of Rural Market

Market Difference
1.Diverse in Nature.
Environmental Difference
1.Small settlements
2.Low infrastructural level
3.Low density of population
4.Poor connectivity between villages
Peculiar social relations
1.Individuals are better known & identified.
2.Social norms influences the individual
more.
3.Caste influence is direct & strong.

Classification of Rural Markets -1

Rural market can be classified as below.

1.Consumer market - consist of individuals

& households.

Products:

Consumables-Food products, toiletries,

cosmetics, textiles, garments & footwear.

Durables-Watches, Bicycles, television

sets, radios, home appliance, two wheeler
etc.

Factors or contents of Rural Marketing

Environment

Population, Occupation pattern, income

generation.
Location of rural population, expenditure pattern.
Literacy level, land distribution, land use pattern.
Irrigation, development programs, infrastructure
facilities.
Rural credit institutions, rural retail outlets, print
media in rural areas, rural area requirement.
Problems in rural marketing, rural demand, rural
market index.

POPULATION - About 70 percent of Indians

reside in rural areas. As per the 2001 census
data, India has a total population of 1027 million
of which rural population is large & is 742 million.
It should be noted that a large population will
require a wide variety of consumable & durable
goods & services but at the same time these
needs of the rural areas do not automatically
guarantee a market, unless backed by rising
disposable income & the resultant purchasing
power.

Population in India-proportion of
rural VS urban
Year

Rural population Proportion

in million
to total
populati
on (%)

Urban
populati
on in
million

Proportion
to total
populati
on (%)

Total
populati
on in
million

1951

295.0

82.6

62.0

17.4

357.0

1961

360.0

82.0

79.0

18.0

439.0

1971

439.0

80.1

109.0

19.9

548.0

1981

508.0

76.0

160.0

24.0

668.0

1991

621.0

74.3

215.0

25.7

836.0

2001

742.0

72.2

285.0

27.8

1027.0

Occupation Pattern
The main occupation for a vast majority of
rural population is agriculture & allied activities.
About half of the rural population own or lease
land & cultivate it for their livelihood.
Another 27 percent are dependent on these
cultivators for jobs as agriculture laborers.
Others include petty shop owners, Merchants,
teachers, health workers & village-level
officials. So disposable income in the hands of
rural people is very much dependent on the
status of agriculture & other allied activities.

Table indicating Occupation Pattern

Sl No

Occupation

Proportion to total rural

population(%)

Agriculture

50

Agricultural Labour

27

Business

10

Non agricultural Labour

Salary Earners

Total Rural population

100

Income generation
The occupation pattern dictates the
pattern of income generation. Major
occupation being agriculture a large
portion of income generated in rural areas
is from agriculture & agriculture related
activities.

The prosperity of rural areas &

development of rural market to a large
extent depends upon the progress of
agriculture & related activities.

Table Indicating Income

Generation in Rural Areas
Sl No

Occupation

Proportion to total rural

population(%)

Agriculture

59

Agricultural wages

16

Business & Crafts

Non agricultural Wages

Salaries

Others

Total Rural
population

100

Expenditure Pattern -1

The National Sample Survey organization

conducts consumer expenditure surveys in the
country.
Usually
expenditure
data
are
presented expenditure group wise for different
items under two major headings food items &
non food items.
Out of every rupee spent in 2004-05 by the
average rural Indian on consumption, 55 paise
was spent on food. Of this, 18 paise was spent
on cereals and cereal substitutes, 8 paise on
milk and milk products, 6 paise on vegetables,
5 paise on edible oil, 5 paise on sugar, salt and
spices, and 5 paise on beverages, refreshments
and processed food.

Expenditure Pattern -2

The share of clothing in total consumer

expenditure has fallen from 7-8% to 4.5% in
rural India & from 5-7% to 4% in urban India.

From the above data it is clear that people in

rural India spend more on food item rather than
on beverages, refreshments and processed food.

Literacy Level

Since independence a number of steps have

been taken to increase the rate of of literacy
in rural India.
The
high
literacy
rate
implies
that
communication should not prove a hurdle
with
the
rural
population,
provided
appropriate means are chosen. Today
television has proved to be an effective
mass medium for communication with the
rural masses. The television network in the
country today covers nearly 100 percent of
the population offering a grater reach when
compared to any other mass medium.

Table indicating Literacy Level

Literacy Levels in Percentage
Sl
N
o Sex

1971

1981

1991

2001

Rural

Urban

Rural

urban

Rural

Urban

Rur
al

urban

Male

34

61

41

66

58

81

71

87

Female 13

42

18

48

31

64

47

73

Total

52

30

57

45

73

59

80

24

Land Distribution

The basic resource in agriculture is land. The land

distribution is a main factor in deciding the
distribution of rural income. Since the land
distribution is uneven the income distribution is
also uneven which means the rural areas consist
mainly of a large number of small consumers or
families in lower income groups compared to the
number of families with higher income.

Infrastructure facilities-3

3.Television & Radio

Doordarshan has a reach over 87% of the

population plays a important medium of
communication in rural area. some programmes
are telecasted specially for agriculture purpose &
welfare programmes which our rural people can
use the information. Even satellite channels are
making in roads to rural areas.

From six radio stations at the time of

independence All India Radio today has 208 radio
stations & provide a coverage to rural & urban
population

Infrastructure facilities-4

4.Postal SystemThe department of post comes under the ministry of

communications & information technology. India has
1,55,279 post office & which serves on an average
of 6,614 persons.

5.Telecom & Mobile services-

1.Village public telephone

2.Mobile postman scheme -DAAKIYA AAYA! MOBILE
LAAYA! (MOBILE POSTMAN SCHEME) 24.12.2002

 The

scheme is designed to provide

availability of a phone at the doorstep
of every rural household.
Under the scheme, mobile phone will
be provided to a Postman(Gramin
Sanchar Sevak). When the postman
goes to a house to deliver a letter, he
will carry the phone with him. Since a
postman reaches practically every
house, the scheme will enable the
phone service to be made available
practically to all citizens in his area.

Rural sources of credit

Credit

providers in Rural India can be

classified into two groups.

1.organised.
2.Un

organized.

Forms of Rural Credit

1.Unorganized Finance

Private Money Lenders

2.Organised credit Providers

Banking-Nationalised Banks,
Grameen
Banks,
Cooperatve
societies,
Cooperative
banks,
Non
Banking
institutions,
Peerless, Sahara & others

3.Innovative
Systems(avoid)

Credit Micro finance (SHGs), Chit

funds. (avoid)

Unorganized Finance.

In the past private money lenders have provided the much

needed credit in rural areas against gold, jewellery, land &
house as collateral security. Access to finance was informal
& easy as it did not require any paper work (as in the case
of bank). Money lenders are of four categories.

Rich farmers who lend to fellow villagers & farmers.

Village shopkeepers.

Professional money lenders who belong to a particular

community.

Commission agents, (Artiyas in mandis).-The agricultural

marketing system (mandi) set up by the government
includes commission agents who help build the interface
between farmers & buyers. Over the years these artiyas
have become private financers of farmers for the
productive & consumption needs there by ensuring that
farmers sell their produce only through them.

Organized Sector
Rural

finance in the organized sector has

been spearheaded by cooperatives,
commercial banks & RRBs
under government programmes these
organizations provide timely, cheap &
adequate credit to benefit small &
marginal farmers & the weaker sections
of society.

Problems in the Booming Rural

Marketing
Although

the rural market does offer a

vast untapped potential, it should also be
recognized that it is not that easy to
operate in rural market because of
several problems. Rural marketing is thus
a time consuming affair and requires
considerable investments in terms of
evolving appropriate strategies with a
view to tackle the problems.

1.Underdeveloped People and

Underdeveloped Markets:

The number of people below poverty line

has not decreased in any appreciable
manner. Thus underdeveloped people and
consequently underdeveloped market by
and large characterize the rural markets.

Vast majorities of the rural people are

tradition bound, fatalistic and believe in
old customs, traditions, habits, taboos
and practices.

2.Lack of Proper Physical

Communication Facilities

Nearly fifty percent of the villages

in the country do not have all
weather
roads.
Physical
communication of these villages is
highly expensive. Even today most
villages in the eastern parts of the
country are inaccessible during the
monsoon.

3.Media for Rural

Communication

Among the mass media at some point of

time in the late 50's and 60's radio was
considered to be a potential medium for
communication to the rural people.
Another mass media is television and
cinemas. Statistics indicate that the rural
areas account for hardly 2000 to 3500
mobile theatres, which is far less when
compared to the number of villages.

4.Many Languages and Dialects

The number of languages and

dialects vary widely from state to
state, region to region and probably
from
district
to
district.
The
messages have to be delivered in the
local languages and dialects. Even
though the number of recognized
languages are only 16, the dialects
are estimated to be around 850.

5. Dispersed Market:

Rural areas are scattered and it is

next to impossible to ensure the
availability of a brand all over the
country. Seven Indian states account
for 76% of the country's rural retail
outlets, the total number of which is
placed
at
around
3.7
million.
Advertising
in
such
a
highly
heterogeneous market, which is
widely spread, is very expensive.

6. Low Per Capita Income

Even though about 33-35% of gross

domestic product is generated in the
rural areas it is shared by 74% of the
population. Hence the per capita
incomes are low compared to the
urban areas.

7. Low Levels of Literacy:

The

literacy rate is low in rural areas

as compared to urban areas. This
again
leads
to
problem
of
communication
for
promotion
purposes. Print medium becomes
ineffective
and
to
an
extent
irrelevant in rural areas since its
reach is poor and so is the level of
literacy

8.Prevalence of spurious brands and

seasonal demand:

For any branded product there are a

multitude of 'local variants', which
are cheaper, and, therefore, more
desirable to villagers. (For ex-Edible
oil)

9.Different way of thinking

There is a vast difference in the lifestyles

of the people. The kind of choices of
brands that an urban customer enjoys is
different from the choices available to the
rural customer. The rural customer usually
has 2 or 3 brands to choose from whereas
the urban one has multiple choices. The
difference is also in the way of thinking.
The rural customer has a fairly simple
thinking as compared to the urban
counterpart.

Rural Retail Outlets.

Retailing can be defined as the end process of supply chain

management where there is a direct interaction with the
end user or the customer

Much transformation has taken place in the rural retailing

format.

1.Traditional FormatHaats
Melas
Local shops

2.Government supported format

Fair price shops
Co-operative societies
3.Modern Format
Rural Malls.

Haats- (Periodic Markets)

are held on a particular day every week.
Haats plays an important role in the rural
economy as well as in the social life of
villagers.
A first point contact for villages with the
Market.
A means of distributing local product
An opportunity for buying daily necessities
as well as farm supplies & equipments.
A place for political, social & cultural
contact

Table Indicating Average sale at a

Haat
Total Number of Haats

47,000(MART estimates,1995)

Average number of Visitors

4,580

Average number of villages 14

catered by a haat
Number of stalls

314

Average sale at a Haat

Rs2.23 lakhs

Melas

are held once or

twice a year for
longer duration &
are normally timed
to coincide with
religiously festivals.

Number
of 25,000
Melas Held
annually
Average number 7.6 lakhs
of visitors
Average number 854
of outlets
Average sales
Source-Mart
study

Rs243 lakhs

Local Shops
As

per the 2001 census out of the

1.33 crore shops in India,55 lakhs
are in rural areas. The type of outlets
found in villages are kirana store,
paan shops, Flour mills, tailor,
barber, Medical shops etc.

Government supported format.

1.Fair

Price shops-Public distribution

system is the distribution of essential
commodities to a large number of people
through network of fair price shops.
Commodities distributed are wheat, rice,
sugar, edible oil & kerosene.

Of

the total number of FPS 80% are in

rural areas.

Government supported format

2. Co-operative societies- co-operatives

occupy an important place in Indias rural
economy in terms of their coverage of
population & their share in the total
supply of agricultural inputs, including
credit.

Co-operatives account for 34% of the total

quantity of fertilizers distributed in the
country. warna bazaar & farmers services
co-operative societies (FSCS) function like
mini supermarkets for rural consumers,
where consumables, house hold durables
& agricultural products are sold at
economical & reasonable price.

Warna Bazar

A milk & sugar cooperative society in

the kolhapur district of Maharashtra
opened the first departmental store in
1978.Today it has 41 retail stores in
the rural areas of sangli & kolhapur
districts. This has become a one stop
shop for rural consumers looking to
purchase all kinds of items of rural
need, ranging from FMCG, durables,
auto
components
&
agricultural
products.

Rural malls

Days are gone when the kirana shop owner sat in full
control of the products stocked in shelves behind him.
Rural people can now have the shopping experience
as their urban counterparts in some of the rural
organized retail outlets listed below.

1.Aadhar from Godrej.

2.Hariyali kisaan Bazar-DCM Shriram Consolidated Ltd

4.Choupal Sagar from ITC.

http://www.businessworldindia.com/sep2004/indep
th02.asp

5.Triveni Kushali Bazar-Triveni Engineers & industries

Ltd.

6.Kisan Seva Kendra-Dabur

ITC-CHOUPAL SAGAR(Rural
Mall) in Rafiq Ganj-Madhya
pradesh

ITC-CHOUPAL SAGAR(Rural
Mall) in Rafiq Ganj-Madhya
pradesh

ITC-CHOUPAL SAGAR

E-Chaupal is the backbone of Choupal sagar).

ITC choupal sagar was the first rural mall in India, with an
7,000 square feet. it stocks almost everything from tooth
paste to fertilizer. Most of the brands that choupal sagar
sells are national brands such as Marico, eveready & others.
the mall is located near the stock points of ITCs echoupals.To offset the huge investments made in the
distribution net work ITC has partenered with other
companies interested in serving the Rural market.

Hariyali Kisaan Bazaar from DCM

Shriram Consolidated Ltd

Hariyali Kisaan Bazaar

The "Hariyali Kisaan Bazaar" chain, seeks to
empower the farmer by setting up centres,
which provide all encompassing solutions to the
farmers under one roof.
Each "Hariyali Kisaan Bazaar" centre operates in
a catchment of about 20 kms. A typical centre
caters to agricultural land of about 5000070000 acres and impacts the life of approx.
15000 farmers.
Each centre is engaged in:
Bridging the last mile: Provides handholding to
improve the quality of agriculture in the area.
Provides 24X7 support through a team of
qualified agronomists based at the centre.

Hariyali Kisaan Bazaar

Quality Agri-Inputs: Provides a complete range of

good quality, multi-brand agri inputs like
fertilizers, seeds, pesticides, farm implements &
tools, veterinary products, animal feed, irrigation
items and other key inputs like diesel, petrol at
fair prices.
Financial Services: Provides access to modern
retail banking & farm credit through simplified
and transparent processes as also other financial
services like insurance etc.
Farm Output Services: Farm produce buyback
opportunities, access to new markets & output
related services.
Other
Products
and
Services:Fuels,
FMCG,
Consumer Goods and Durables,Apparels etc.

Fortis HealthWorld

Organised retail outlets not only help in

giving necessary information, buy back of
agriculture produce, selling of agriculture
& consumer goods but they have become
the easy source in accessing the rural
people. As a result petroleum company
HPCL & healthcare provider Fortis they are
tieing with rural retail outlets to offer their
services to rural people.

Fortis Health World tie up with Hariyali

Kisaan Bazaar, a unit of DCM Shriram
Consolidated Ltd.to open health care
facility in mandi(Ahmedgarh)

Fortis Health World

Fortis Health World will have the following key

features at the stores:

OPD facility (Doctors Consultation)

Telemedicine

Routine Pathology tests Collection centre (SRL

Ranbaxy).

Prescription, OTC, Alternate medicines (Ayurveda

& Homeopathy) and also veternary medicines.

Wide range of fast moving health good and

support systems.

Godrej Aadhaar
Khushiyon Ka, Khushhali Ka

Godrej - Aadhaar
GODREJ

Aadhaar, the rural retail initiative

of Godrej Agrovet Ltd, has chain of 18
stores providing a host of services to
farmers and their families.

Positioned

as `Godrej Aadhaar Khushiyon Ka, Khushhali Ka', The

company is in the process of talking
among others to Apollo Hospitals to set
up pharmacy/polyclinics at the large
format stores.

Godrej - Aadhaar

The company launched the first couple of these

new large format retail stores at Mancher and
Alephata in the Pune district of Maharashtra . The
new format stores sprawl over an area of around
10,000 sq.ft. at Mancher and 3000 sq. ft. at
Alephata on the Pune-Nashik Highway. These
stores not only offer complete agricultural
solutions and products for the farmers but also a
wide range of commodities for rural households.

Godrej Aadhaar, with an objective to improve

productivity, higher returns and improved cost
benefit ratio, at present offers crop advisory
services, soil and water testing services; buy back
of output, crop finance, supply of agri-inputs and
animal feeds, transfer of information (weather,
price, and demand supply), door delivery of
products among other things.

Working Model of E- Choupal

Working Model of E- Choupal - 1

Each e-Choupal (equipped with a PC with Internet

connectivity, printer and UPS) typically housed in the
farmer's house, is linked to the Internet via phone liness.

Using the system costs farmers nothing, but the host

farmer, called a sanchalak, incurs some operating costs
(The IT part of each e-Choupal costs about Rs 1.3 lakh,
each e-Choupal is estimated to pay back for itself in 4.5
years) and is obligated by a public oath to serve the entire
community;

The sanchalak benefits from increased prestige and a

commission paid him for all e-Choupal transactions.

The farmers can use the computer to access as well as to

track global price trends or find information about new
farming techniques-either directly or, because many
farmers are illiterate, via the sanchalak.

Working Model of E- Choupal -2

They also use the e-Choupal to order seed, fertilizer, and

other products such as consumer goods from ITC or its
partners, at prices lower than those available from village
traders;

the sanchalak typically aggregates the village demand for

these products and transmits the order to an ITC
representative.

At harvest time, ITC offers to buy the crop directly from any
farmer at the previous day's closing price; the farmer then
transports his crop to an ITC processing center, where the
crop is weighed electronically and assessed for quality.

The farmer is then paid for the crop and a transport fee.
"Bonus points," which are exchangeable for products that
ITC sells, are given for crops with quality above the norm.
In this way, the e-Choupal system bypasses the
government-mandated trading mandis.

Demand: Rural VS urban

Sl

Features

Rural

Urban

Demand pattern

Seasonal

Uniform

Spread

Widely spread

concentrated

Literacy Level

Low

High

Sources of supply

Inadequate

adequate

Physical Communication facilities Poor

Very good

Sources of information

Word of mouth

Any media

Timeliness of supply

Untimely

timely

After sales service availability

Inadequate

Adequate

Per capita income

Low

high

10

Product as status symbol

Mostly No

Mostly yes

N
o

Hierarchy of markets for Rural

consumers
State
Capital
/Metros

Affiliate Primary

te
Secondary whole sale markets

Primary wholesale assembling

Markets
Shandies,Haats,jathras & Melas
(Cloth,Cosmetics, Soaps, Services, Kitchen
equipments, Agricultural tools, Bamboo baskets etc

Village Shops
(matchboxes, Cigarettes, Tea, kerosene, Salt,
Edible oils etc

Rural marketing strategies

Considering the environment in which the rural market operates

and its associated problems, and the experience of
manufacturer and marketing men who operates in the rural
market, it is possible to evolve certain strategies specifically for
rural marketing.
In this section we try to draw a framework for the adoption of a
mix of marketing strategies pertinent for rural marketing.

Product strategies

Drawn from the experience of companies operating in the

rural market, meaningful product strategies for the rural
market and rural consumer have been discussed here.
Small unit packaging : this appears to be an effective
strategy for realizing the potential of rural market. The
reduced pack sizes attract a large number of rural
consumers to at least try and test the products.
Low priced packaging : take an e.g. of Janta blend,
they marketed a brand of tea which contained 70 percent
tea, 20 percent of chicory and 10 percent of tipoca flour.
New product designs
Sturdy products
Utility oriented products
Brand name

Pricing Strategies

Pricing strategies are linked to the product strategies. The

product packaging and presentation also keeps the price
low to suit the rural consumer.
Some of the pricing strategies are discussed below:
Low cost/ cheap products: the price can be kept low by
low unit packing's like paisa pack of tea, shampoo sachets,
Vicks 5 grams tin, etc. this is a common strategy widely
adopted by many manufacturing and marketing concerns.
Refill packs / Reusable packaging: in urban areas most
of the health drinks are available. The containers can be
put to multipurpose uses. Such measures can a significant
impact in the rural market.

Distribution Strategies

While it is necessary to formulate specific strategies for

distribution in rural areas, the characteristic of the product
whether it is consumable or durable, the life of the
product and other factors have to kept in mind.
The following strategies formulated for the rural category.
Coverage of villages with 2000 and above population:
Ideally, coverage of villages with up to 2000 and above
population could be the break-even point for a distribution
setup. By doing so the percentage of villages covered comes to
only 10% of all the rural population covered will b substantial.
With improved communication facilities it is possible to reach
distribution vas to these villages.

Use of co-operative societies: There are over 3 lacks co-operative

societies operating in rural areas for different purposes like marketing
cooperatives, farmers service cooperatives and other multipurpose
cooperatives. These cooperatives have an arrangement for centralized
procurement and distribution through their respective state level
federation.
Utilization of public distributory system: The PDS in the country
is fairly well organized. The revamped PDS places more emphasis on
reaching remote rural areas like the hills and tribals. The purpose of
PDS is to make available essential commodities like food grains,
sugar, kerosene, edible oils and others to the consumers at a
reasonable price.
Utilization
of
multipurpose
distribution
centres
by
petroleum/oil companies: In order to cater to the rural areas the
petroleum/oil companies have evolved a concept of multipurpose
distribution centres in rural areas. In addition to petrol/diesel,
lubricants, these outlets also stock consumables agricultural inputs
like fertilizers, pesticides and seeds.

Agricultural Input Dealers: Fertilizers should be made

available to the farmers within the range of 4-5 km from
their residence, as per the essential commodities act. This
is why there are about 2 lakh fertilizer dealers in the
country, both in cooperative & private sector. Example of
Varana Nagar in Maharashtra proved an eye opener in this
regard where the sugar and milk co-operatives have totally
changed the life style of people. The supermarket in Varana
Nagar caters exclusively to rural consumers. Similarly a cooperative supermarket called Chintamani in Coimbatore
(T.N) arranges free transit of rural consumers to the
supermarket of their purchases.