Scope of Rural Marketing

What is Rural area?• 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

Market

What is Rural Marketing?

Developing of the market in the area as defined as Rural

hence it could be aptly said that it encompasses the activities such as developing the process to meet

this objective :

Right product at the right price to the right people at the right time.

Exchange between rural and Urban is a factor . Could be Urban to Rural: Rural to Urban, Rural to

Rural

Reasons for Going Rural

Size of the market

Largely Untapped

Too crowded Urban Market

Income on the rise/disposable income

Income from other than agriculture

Income flow from urban /abroadBetter exposure - media

Great success storiesHLL 50%Colgate 50%LG 50%Asian Paints 60%Dabur 40%Videocon 40%Cadbury’s 25%

“India lives in villages”-Mahatma Gandhi

About 285 million reside in urban India as compared to 742 million in rural India.

The number of middle income and high-income household in rural India has grown from 80 million to 111 million while urban India has grown from 46 million to 59 million. 53 per cent of all FMCGs and 59 per cent of all consumer durables are sold in rural India.

Rural marketing involves addressing around 700 million potential consumers, over 40 per cent of the Indian middle-class, and about half the country's disposable income.

The Indian rural market is almost twice as large as the entire market of USA or Russia.

The rural market for FMCG is Rs. 65,000 crore, for durables Rs. 5,000 crore, for tractors and agri-inputs Rs. 45,000 crore and two- and four-wheelers, Rs. 8,000 crore. In total, a whopping Rs. 1,23,000 crore.

Potencial of Rural Market

Move to Rural Market …encouraging Data

Rural India buys Soft Drinks approx 45% of all soft drinksAlmost 50% motor cyclesApprox 55% of cigarettesHalf 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 thatHas published a Guide to Indian Markets 2006Consumer durables in Indian Villages risen sharplyTV Sales up by 200%Motorcycle by 77%There are 3000 households in rural area that earn > 50 lakhs

PROBLEMSIN

RURALMARKETING

PROBLEMSIN

RURALMARKETING

Low per capita income

Low disposable income

Inadequate fixed income(daily wages)

Majority – depends on AgriculturalIncomeAcute dependence on monsoonConsumption linked to harvest

Infrastructure problemsRoads, power

Low awareness

Communication- difficult & expensive

Too many languages

Geographic Spread

Urban & Rural Markets

Per capita Income

Disposable Income

Literacy levels

Infrastructure

Communication

Geographical Spread

Customer has many choices

Key Differences

Key

Challenges

4A

Awareness

Affordability

Availability

Acceptability

4 Ps 4 As

Promotion Awareness

Price Affordable

Product Acceptable

AvailablePlace

Mantra of SUCCESS

DEVELOPMENTAL MARKETINGDevelopmental marketing is a process through whichawareness is created

could be demonstrationcould be presentationFree samplescould be through up eg tie up with Bank tie up with Petrol/Diesel pumps (Hyndai did with IOC and PNB and SBI subsidiaries >30% sale of Hyndai from Rural/Semi Urban areas)

Awareness

Trial

Purchase

Post-Purchase Satisfaction

Colgate – program Operation Jagruti Switch from Charcoal to Colgate tooth powder

HLL - Free samples of LifebuoyCavin Kare – Free sample of Chik Champoo

PROFILE OF RURAL MARKET

RURAL CONSUMER

RURAL MARKET RESEARCH

RURAL SEGMENTATION –TARGETING & POSITIONING

RURAL MARKETING STRATEGY

RURAL PRODUCT

RURAL PRICE

RURAL DISTRIBUTION

About Rural Marketing…

CONCLUSION• 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)