A glimpse of rural India and scope of marketing.

1. RURAL INDIA : AN INTRODUCTION

2. POTENTIAL
74% or almost every 5th Indian lives in rural India
Villages – 6,27,000
 58% of total disposable income
 Market Size – 1,08,000 crores
A 1% increase in rural income increases buying power by almost
10,000 crores

3. DYNAMICS OF RURAL MARKETS
Need fulfillment/Functional benefits
are most sought after because of
highly routinized village life.
Low product knowledge and awareness
 Apply common sense in buying decisions
 High brand stickiness
 Influenced by symbols, logos , and colors
buying decisions
Friends, relatives, local
ambassadors such as local
mechanics play crucial role
Interpersonal communication is
best marketing communication
tool
Heavily influenced by
children/teens – most exposed to
TV and modern urban life
TV viewing highest among
children and women

4. DYNAMICS OF RURAL MARKETS
CONTD.
Lack of homogeneity:
perceptions, traditions,
values etc. vary vastly from
state to state, in some
cases region to region.
Focus on value for money rather than low
price
Example: No hesitation in buying
productivity increasing items such as
means of transportation
Rural financing initiatives increase
affordability increasing the intention to
purchase big items

5. ACQUIRING KNOWLEDGE OF
RURAL CONSUMERS
Rural India is very vast and
diversified and so the rural people.
Hence approach to research should
be different for these areas.
Rural people are social so try to
engage them in group and than ask
them questions.
Try to keep a local persona who is
revered highly among that area to
facilitate research.
Target HAAT/MELAS to better
enquire about product and behavior
Keep a constant touch with
retailers.

6. PROBLEMS OF COMMUNICATION AND
SOLUTION
Poor literacy levels leading to
lesser product knowledge.
Only 41% of Rural population
have access to Television.
Restricted viewing due to
frequents power cuts.
Numerous Languages and
dialects spoken in India.
Remembering advertisements
but failing to identify the
product.
Nearly 6.5 lakh villages in
India.
Identification of brands
through symbols and logos
• Live Demonstrations
showing product
benefits.(In haats, melas
etc.)
• Usage of Transistor Radios
for audio advertising.
• Usage of local customized
communication packages.
• Advertisements should be
functional with minimum
dialogue and powerful
characterization.
• Target villages with
population of above 2000
which have the purchasing

7. OPPORTUNITIES
Opinion Leaders: a group consisting of progressive farmers, village
heads, relatives. They influence the tastes and preferences of villagers
in their respective village.
Better brand communication by promoting through dealers and
retailers as villagers give high importance to their views.
Mill Marketing: Can be used for marketing of agri products because
of the suitable demographic.

8. OPPORTUNITIES CONTD..
Melas/Haats : Average Sale of INR 2.23 lakh and about 47000 Haats
and Melas held every year.
Local Festivals and village campaigns. Eg. Thums Up Chowfulla,
‘Gumbat Gari’.
Tapping the urban aspirations of villagers through aspirational
commercials and not treating him as a villager but someone who can
be much more. The above should be done without forgetting the
notion of ‘value for money’.

9. PRODUCT PRICING STRATEGY
Product Pricing Strategy
Cinthol, Fair
Glow
Introduced in 50 gm
pack in the price
range of
Rs 4-5
Smaller packs to bring the
price within the range of
rural population.
Rough N Tough
Jeans
•Current price rang
was Rs 150-300
•These jeans were
introduced at Rs.195
• Train the local tailors and
establish a distribution
network in villages with
population up to 5000.
•Thus, reducing cost and
improving distribution.
Philips Free
Power Radio
The price was kept
under 1000 Rs.
•The system doesn’t need
battery and hence cost
saving of Rs 1000/Year.
•The price was Rs.995

10. CONTD……
Product Pricing Strategy
Tiger Cream
Biscuits
The packs were
priced at Rs. 5.
•Consumers in rural areas
have aspiration but
cannot afford the steep
price of Rs. 10-12
•Thus, Britannia offered
cream biscuits at Rs.5
Agni Sholay Tea
Brand by Tata
The price ranged
from Rs 31.5- Rs.
6.5
Different packs at
different price points
were Introduced.
Thus a consumer unable
to buy a 250 gm pack
can buy 50gm at Rs.6.5

11. Most of the pricing
strategy revolves
round the fact that
rural consumers have
low purchasing
power and yet aspire
to use products out
of their reach
By packing the
product in different
quantities these
consumers could
afford to buy the
product

12. SUGGESTIONS
In case of Arvind Mill
jeans collaboration with
local tailor reduced the
price but increased the
risk of sub standard
products
The companies cannot
solely be dependent on
pricing even in rural areas
as the purchasing power
will increase and thus,
quality and quality of
service is important
As price can be matched
by competitors it’s
important to cater to
specific need of the rural
consumer rather than
just focusing on price

13. CHALLENGE IN DISTRIBUTION IN
RURAL INDIA
Poorly developed
transport
Infrastructure in rural
areas.
Companies faces challenge of
Inventory cost
Inaccessibility

14. CRITERIA TO SELECT
DISTRIBUTION CHANNEL
• Distribution network model should be appropriate for product and service which is using
it.
• Channel should be based on aggregate demand
• Help of rural entrepreneurs should be taken for distribution.
Rural entrepreneur for coke
distribution

15. TYPES OF DISTRIBUTION SYSTEM
EFFECTIVE IN RURAL INDIA
Hub and spoke
Coca-Cola
Distribution
through weekly
markets
HAATS , Coalgate
Distribution
through Feeder
towns
Durables
Bottling plant to a
HUB and from
there to local
distributor and
rural entrepreneur
will take forward
to the deeper side
of villages from
there
Hiring local youth
which will
distribute its
product through
HAATS and
manually by
travelling over bike
to rural areas
Rural consumer
purchases
electronic goods
from nearest
towns.
Distribution
network should
worry about
reaching to those
stores in town
only.

16. TYPES OF DISTRIBUTION SYSTEM
EFFECTIVE IN RURAL INDIA
CONTD..
By collaborating with
companies/NGO/SHG which
already are doing great in
terms of rural distribution
• P&G did it with Marico for
CAMAY
• Samsung did it with E-choupal
of ITC
• Hypermart (all brands can
collaborate)
• Project Shakti with SHG of
Women
Project Shakti
A Hyper Mart in
Rural India

17. PUSH OR PULL!!
Rural distribution incurs a
lot of cost on company’s
exchequer.
If distribution network is
selected and the demand is
not anticipated than entire
channel may collapse.
So it is strongly
recommended to
aggregate demand and
than plan your distribution
channel.
Consumer durables and agri-inputs are
supplied on the basis of this only.
Demand from all the spokes are aggregated on
hubs and than channel network is decided.