This document discusses rural markets in India. It defines rural markets and outlines some key differences between rural and urban markets, including lower per capita income, literacy, and infrastructure in rural areas. While rural markets face challenges like low awareness and affordability, many companies have found great success targeting rural consumers. Over half of sales for products like soft drinks, motorcycles, and consumer durables now come from rural India. To succeed in rural markets, companies must address challenges through strategies that improve awareness, affordability, availability, and acceptability of products for rural customers.
2. • Government agencies like
IRDA (Insurance Regulatory
and Development Agency and
NCAER (National Council
for applied Economic
Research) define Rural as :
Village with a population <5000
with 75% male population engaged
in agriculture etc.
population density <400 sq km
3. Rural Markets are defined as those segments of
overall market of any economy, which are distinct
from the other types of markets like stock
market, commodity markets or Labor economics.
4. Urban & Rural Markets
Key Differences
Per capita Income
Disposable Income
Literacy levels
Infrastructure
Communication
Geographical Spread
Customer has many choices
6. Size of the market
Largely Untapped
Too crowded Urban Market
Reasons Income on the rise/disposable
for income
Going Rural Income from other than agriculture
Income flow from urban
/abroad
Better exposure - media
Great success stories
HLL 50%
Colgate 50%
LG 50%
Asian Paints 60%
Dabur 40%
Videocon 40%
Cadbury’s 25%
7. Move to Rural Market …encouraging Data
Rural India buys
Soft Drinks approx 45% of all soft drinks
Almost 50% motor cycles
Approx 55% of cigarettes
Half the total market for TV,
Fans,
pressure cooker,
bicycles
Washing soap,
tea,
blades,
salt,
toothpowder
Coca Cola is growing over 35% in Rural areas compared to Over 22 % in Urban
According to Hasna Research , a market research farm that
Has published a Guide to Indian Markets 2006
Consumer durables in Indian Villages risen sharply
TV Sales up by 200%
Motorcycle by 77%
There are 3000 households in rural area that earn > 50 lakhs
8. Low per capita income
Low disposable income
Inadequate fixed income
(daily wages)
Majority – depends on Agricultural
Income
Acute dependence on monsoon
Consumption linked to harvest
Infrastructure problems
Roads, power
Low awareness
Communication- difficult & expensive
Too many languages
Geographic Spread
9. Awareness
Key
Affordability
Challenges
Availability
4A
Acceptability
4 As
4 Ps
Promotion Awareness
Price Affordable
Product Acceptable
Place
Available
11. • Rural India offers tremendous opportunity for any company to
tap.
• Companies face many challenges in tackling the rural markets.
• Important factors being an understanding of the rural
customers' needs, a reliable distribution channel, and an
effective marketing communication strategy to put their
message across to the rural consumer
• The Mantra(four As)
