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Rural Marketing

THE CALL OF RURAL


MARKETING IN
BANGLADESH
CHAPTER # 1
Stanley Rodrick
Assistant Professor,
Department of Marketing, FBA,
AIUB

The Call of Rural Marketing


in Bangladesh

Why Rural Marketing became so


Attractive???
The 4 billion people at
the bottom of the
income pyramid have
a combined income of
about $ 8 trillion
Source: Creating Value for all

UNDP 2008
Large Population - untapped potentials:
With more than 70% of its population residing in the
rural areas, it would not be wrong to describe
Bangladesh as a giant village.
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Rural Marketing in
Bangladesh
Fuelled by NGO activities (Micro credit and
women empowerment programs), good
monsoons and the increase in agricultural
output (by virtue of hybrid seeds), rural
Bangladesh has evolved with a large
consuming class made up of almost 40% of
the country's middle-class with 50% of the
total disposable income.

Rural Marketing in
Bangladesh
TV & Radio does not reach out to more than
55% of the population & more critical is the
press media penetration when literacy is
less than 30% but FMCGs are bought by
more than 70%.

Rural Marketing:
Definition
What is Rural?

Government Definition: Places which are densely


populated and a majority of the population depends
on agriculture and where amenities like roads,
communication facilities, electricity, gas, water
supply, sewerage, sanitation are not adequate or do
not exist.

Corporate Rural Marketing: A function that manages


all activities involved in assessing, stimulating &
converting the purchasing power of rural consumers
into an effective demand for specific products &
services & moving these products & services to the
people in rural areas to create satisfaction & a better
standard of living & thereby achieving organizational
goals.
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Rural Marketing - A Mindset


Who are Rural consumers?

People with limited or no education, have simple


thinking, mostly the low income group who buy
low unit packs & more frequently from the local
retailer, preferably on credit.

Rural Marketing - A Mindset


Who are Rural consumers?

The peons & runners of our offices, semi skilled garment


workers, the rickshaw pullers, CNG Drivers, slum dwellers
who all live in the heart of the capital.

They are very sensitive & alert to the value of the


product, & are usually habitual buyers. They adhere to
prevailing social & cultural norms; they strongly believe
in fate, luck & religion.

Classification of Rural
Market
The rural market can be classified in a way similar to
urban markets.

(a) Consumer Market

Constituents: Individuals & households

Products: Food products, Toiletries & cosmetics,


Textiles & garments, Foot wear etc.

Durables: Watches, Bicycles, Radio, TV sets,


Kitchen appliances, Furniture, sewing machines,
two-wheelers etc.
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Classification of Rural
Market

(b) Industrial Market

Constituents : Agricultural & allied activities,


food processing, poultry farming, fishery,
animal husbandry, cottage industries, health
center, schools, cooperatives, NGOs etc.

Products: Consumables Agri inputs(seeds,


fertilizers, pesticides) Animal feed, Fishnets,
Medicines, Petrol/Diesel/engine oil etc.

Durables: Agri implements (tractors, Pump


sets, harvesters etc.) Generators, Boats etc.
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Classification of Rural
Market
(c) Services Market
Constituents: Individuals, House holds,
Local Offices, etc.
Services: Repairs, Transport, Banking,
Credit,
Insurance,
Healthcare,
Education, Communication, Power etc.

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Attractiveness of Rural
Market
Various factors which
markets viable:

have

made

rural

Large population Despite the rural urban


migration, the rural areas continue to be
the place of living for a vast majority (about
75%) of Bangladeshis.
Raising
prosperity

due
to
rural
development programs, land reforms, rural
electrification, rural communication, rural
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credit facilities.

Attractiveness of Rural
Market
Growth in Consumption
Life-style changes
Life cycle advantage Many products
have achieved near maturity in the urban
market, while in rural these are still in the
growth phase. The reason for the
variations in product life cycle stages
may be attributed to the different rates of
diffusion-adoption process in urban &
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rural markets.

Attractiveness of Rural
Market
Market growth rates higher than urban (specially
for FMCG & Durable market)
Rural marketing is not expensive
Remoteness is no longer a problem - Remoteness
is a problem but not unsolvable, the rural
distribution is not much developed for the reason,
Lack of proper infrastructure &
Lack of makers imagination & initiative.

Nothing is impossible if there is a will. Hence to tap


the untapped opportunity in rural markets we need
a willingness to go & be14 rural.

Market Differences
Environment Difference
The Urban Environment is characterized by:

High infrastructural level (such as road, electricity)

High density of population

Good physical connectivity, high mobility

The rural environment presents a different picture:

Low infrastructural level

Low density of population

Poor physical connectivity with other villages & towns,


low mobility.
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Market Differences
Social Relations
Urban Social Relations:
Individuals are less known & identified between
members in the social system
Social norms are less visible
Status is achieved
Caste influence indirect, generally subjected to
economic influence
Rural Social Relations
Individuals are better known & identified
Social norms influencing individuals are more
visible.
Status is credited, determined by birth in a family.
Caste influence is direct16& strong

Market Differences
Exposure to Marketing Motivation

Urban

High product exposure, high exposure to branded products


High ad exposure, high brand awareness
Multiple sources of information & learning
More convenient buying, availability of wide range of
products.

Rural

Low product exposure, low exposure to branded products


Low ad exposure, low comprehension of ads, low brand
awareness
Limited sources of information & learning
Less convenient buying, availability of limited range of
products along with imitation products.
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Market Differences
Employment & Incomes
Urban
More
stable,
occupations
mostly
include
employment in
Govt., Business, Industry & service organizations.
White collar employees & workers are a majority
Frequency of income receipts is predictable & at
regular intervals.
Rural
Less certain work environment
Mostly large & small scale agricultural occupations
Severe seasonality of income receipts.
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The Rural Marketing Mix:


Challenges

It is an undeveloped /under developed


country scenario.

The adventurous companies are meeting


the consequent challenges of the 4A
principle for rural marketing

Availability (of products or services)


Affordability (financial acceptability

of

products or services)
Acceptability (of the product proposition)
and
Awareness (of the brand)
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"How to do Marketing in
Rural?"

Access & availability are equally important as the


mantra for success in rural India Jo dikta hai, wohi
bikta hai.

Clinic Shampoo & Parle G are expensive brands,


but the largest selling in Rural India because of
deep distribution & easy availability.

Affordability is the key driver in rural market, as a


result, companies have introduced small packs
(sachets) & coinage pricing (Tk. 2, Tk. 5, Tk. 10)

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"How to do Marketing in
Rural?"
Rural Communication
There is a strong need to build reassurance
& trust about the product quality, service
support & company credentials in the
minds of the rural customers. This is best
done through the face to face below the
line touch, feel & talk modes at Haats &
Melas.
(Face
to
face
interactive
communication medium).
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"How to do Marketing in
Rural?"
Gombhira
Gombhirais a type of song
(originating in Chapai Nawabganj,
in
the
Northern
region
ofBangladesh). It is performed with
a particularly distinctive rhythm
and dance with two performers,
always personifying a man and his
maternal grandfather, discussing a
topic to raise social awareness.

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"How to do Marketing in
Rural?"
o The AICDA Model
Effective communication with rural audience requires
understanding the aspirations, fears and hopes of the
rural customers in relation to each product category:

Awareness
Interest
Conviction
Desire
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Action

END OF CHAPTER 1

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