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• 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

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.

Urban & Rural Markets

Per capita Income

Disposable Income

Literacy levels

Infrastructure

Communication

Geographical Spread

Customer has many choices

Key Differences

Scope of Rural Marketing

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

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

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

Key

Challenges

4A

Awareness

Affordability

Availability

Acceptability

4 Ps4 As

Promotion Awareness

Price Affordable

Product Acceptable

AvailablePlace

• Marketing Strategy• Distribution Strategy• Promotional Strategy• Sales strategy

• 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)