Many leading consumer durable companies are now increasing their presence in rural India. Recently, LG set up 45 area offices and 59 rural and remote offices. Click here for government certification in Marketing. I feel that RMAI is doing a great job and rural marketing has brought the Indian economy to great heights. Good work done. Great Article with almost all the examples related to big companies clearly covered.
Rural marketing is the center of attraction for all the major multinational companies today. The rural markets have been a vital source of growth for most companies.
For a number of companies is the country, more than half their annual sales come from the rural market. Rural Markets are Still Untapped! Your email address will not be published. The demand for dairy products can be easily met by processing a major portion of milk produced.
There are opportunities for export of high quality dairy products and rural India can be converted into a dollar India. In an underdeveloped country, a large part of national income is contributed by primary sector Agriculture and as the country develops, share of primary sector declines and that of secondary Manufacturing and tertiary sector Services increase.
There has been expansion of industrial and service sectors leading to more employment opportunities. Therefore, Indian economy has undergone a change from underdeveloped economy to a developing economy. The average household income has increased from Rs.
Further it has been observed that monthly salary earners have high income compared to income from the farm. The rise in income coupled with increased awareness and the need for possess modern goods have influenced the rural marketing environment in the country. The mobility towards higher income group has been higher in rural area compared to urban. The rural consumer is quickly moving from basic necessities to branded products.
They are modern, knowledgeable and receptive to changes than their elders. They value material comforts and are quick in adopting fashionable lifestyle. Marketers of two-wheelers, TVs, ready-made garments, soft drinks, cosmetic, etc. Expansion of TV network and more channels have contributed to the growth of rural markets.
Through several TV channels and internet, rural consumer is also exposed to the global village. There are about 6 lakh inhabited villages and about 80 per cent of the villages have.
Ending , there were million mobile subscribers. Out of this million subscribers are from rural 35 per cent areas. Further there are about 60 lakh public telephones in villages. The Government plans to reach rural teledensity of 40 per cent by Regarding internet users, at the end of , the number of total internet subscribers in rural India stood at 68 million All India million. Total internet subscribers is expected to reach million by More than in the US the second largest internet base in the world after China.
Project I Shakti, an IT-based rural information service has been developed to provide information and services to meet the rural needs. I Shakti kiosk is operated by Shakti entrepreneur and provide information on health, hygiene, legal, veterinary, agriculture, education and employment.
Private agencies have contributed to growth and development of rural areas through village level programmes. The farmers can sell their produce, buy a variety of products, receive all the information needed to improve their yields and get a better price for the produce through e-Choupal. Number of households in million coming under very rich and well-off categories are high in rural areas.
The average income level has improved due to modern farming practices, industrialisation of rural area, growth of service sector, migration of rural people into cities and remittance of their money, remittance of money by family members settled abroad. Rural income farm and non-farm contributes to over 50 per cent of the total income of the country. The farm wages have been rising and increased from Rs.
Rural markets are growing fast and in many states they contribute to substantial sale of FMCG products. Rural contribution to FMCG sales is high in states that have significant rural population as shown below:.
Marketing communication, and promotion too, poses problems in rural markets. There are many constraints emanating from the profile of the audience and the availability of media.
The literacy rate among the rural consumers being low, the printed word has limited use in the rural context. In addition to the low level of literacy, the tradition bound nature of the rural people, their cultural barriers and taboos and their overall economic backwardness add to the difficulty of the communication task.
The situation is further compounded by the linguistic diversity. Rural communication has to necessarily be in the local language and idiom. The constraints of media further compound the difficulty. It has been estimated that all organized media put together can reach only 30 per cent of the rural population of India.
TV is an ideal medium for communicating with the rural masses. But its reach in the rural areas is limited even today. As regards the print media, the various publications reach only 18 per cent of the rural population. Even in areas reached, the circulation is limited. And the low literacy level of the rural population acts as a further inhibitor in the use of the print media in rural communication. Cinema is relatively more accessible. It has been estimated that 33 per cent of the total cinema earnings in the country come from rural India.
Rural communication has also become quite expensive. For rural communication to be effective, repeat exposures is a must; and if the gap between exposures is long, the message loses its edge during this period.
These factors make rural communication more expensive. Rural communication has to go through all the time consuming stages of creating awareness, altering attitudes and changing behaviour.
In addition, it also has to work against deep rooted behaviour patterns. In short, the crux of marketing communication in the rural context is one of finding a media mix that will deliver the required message in a cost- effective manner to a target an audience that is predominantly illiterate. A company that seeks a long-term presence in the rural market has to squarely encounter these constraints and find a way of communicating effectively with the rural target audience.
Evidently, in the rural context the firm has to choose a combination of formal and non-formal media. Media Mix in the Rural Context :. Dance-dramas, puppet shows, rural specific art forms like Harikatha and Villupatu performed at village melas and temple festivals.
Caparisoned elephants, decorated bullock carts carrying ad panels. House-to-house campaigns by special promotion squads. With the increase in coverage and the increase in TV ownership in rural areas, TV has the potential to become the primary medium for rural communication. Studies have revealed that as much as 77 per cent of the villages in India now receive TV transmission and 27 per cent of all rural people actually watch TV.
The radio is a well-established medium in rural areas. A big expansion in broadcasting facilities has taken place in the country over the years. The availability of radio sets has also expanded. While radio as a medium cannot match TV in potency and effectiveness, in the existing context, radio does have a role in rural communication.
The cinema is a useful medium in the rural context. Most Indian villages have one or more cinema houses. And 29 per cent of all rural people do see cinema as a matter of regular lifestyle and habit. Short feature films with disguised advertisement messages, direct advertisement films and documentaries that combine knowledge and advertisements, can be employed for rural communication.
The outdoor also lend itself well to rural communication. In fact, presently, many companies are using the outdoor medium imaginatively in their rural communication mix, through hoardings, wall paintings, illuminations and other displays in the rural areas. The POPs, point of purchase or point of sale promotion tools are also quite useful in the rural markets.
The POPs meant for the rural market should be specially designed to suit the rural requirements. More than written words, symbols, pictures and colours must be used in POPs meant for the rural markets. Colour is of particular significance in the rural context.
As a general rule, the rural people love bright colours. The effective communicator utilizes such cues. A variety of non-formal media have been developed over the years by rural marketing firms to suit the specific requirements of rural communication. Some of them are interpersonal media and the others mass media. The more popular ones among them are analyzed below:. Audio-Visual Publicity Vans. The A V unit or the publicity van is very useful for rural, communication.
The van is a comprehensive mobile promotion station at the exclusive command of the concerned firm. The firm can exhibit its films and other audio-visual presentations such as slide shows, sound and sight presentations, puppet shows, etc. A portable shamiana or platform can be carried in the van and used as the stage. Even mini public meetings can be organized using the shamiana. Portable exhibition kits can be carried in the van and exhibitions put up instantly.
The van can also be used for sales campaigns in addition to promotion campaigns. It can also be used for product demonstrations. In short, the van has all the advantages of carrying and delivering a tailor-made communication programme for the chosen target audience.
Naturally, the A V vans are quite popular with rural marketing firms. Practically all the firms in the agri inputs business have their own A V vans all over their respective marketing territories. Firms marketing consumer softs come second in the use of A V vans. Firms marketing consumer durables come third. In the third category, the efforts of Philips India deserves a special mention. Philips India has very successfully used the A V vans for popularizing their radios in the rural markets.
While the AV vans are very effective tools in rural promotion, the cost is high as the target population is scattered. The cost of reaching an individual customer or prospect through the van works out high.
In the early stages of market development, in particular, the sales generated may not have any relationship to the cost involved in the extensive use of A V vans. Syndicated A V vans. In recent years, rural publicity vans have become a purchasable service. Firms which cannot afford to operate publicity vans of their own can utilize the syndicated AV van service offered by independent agencies.
Music records, puppet shows, Harikatha, etc. Music cassettes and records is another effective medium for rural communication. It is an appealing medium and a comparatively inexpensive medium. One complete language group can be reached on a low budget through specially developed records or cassettes. They can be played in cinema houses or in other places where rural people assemble. People entertainment programmes like puppet shows, dance dramas, Villupattu and Harikathas specially developed for product promotion purpose are now being used in rural markets.
These traditional art forms readily render themselves for communication in rural society. Sales messages can be beautifully blended with folklore to capture the imagination of rural audiences.
In certain cases, public meetings also are useful for promotion in the rural context. Interpersonal media. They also bring market feedback to the firm. In many cases, rural people prefer face-to-face communication to mass communication. Their confidence in the product and the firm and their goodwill towards the firm become stronger through interpersonal approach. Interpersonal media have their V unique ad vantages; they are segment-specific, market-specific and score high when it comes to involvement and participation of the audience.
Rural communication can work best when it generates involvement of the target audience. In the effort to reach out and go beyond the mass media, a firm can establish contact with the audience through fairs and festivals, folk performances and other special events.
These points of contact also provide multiple media opportunities. For example, at any fair various media like audio, audio-visual and interpersonal communication could be used. Group meetings, demonstrations, house-to-house campaigns. Group meetings of customers and prospects are an important component of interpersonal media. The salesmen or the promotion staff of the firm can effectively carry the product messages to the target audience at these meetings.
On the spot demonstrations of the products can also be carried out at these meetings. House-to-house campaigns constitute a handy tool in the rural market. In these campaigns, small squads of staff or persons specially hired for the x specific promotion make house-to-house visits in the rural areas.
Several independent teams may be at work at the same time in different parts of the same village. These campaigns are different from door-to-door selling campaigns. The promotion squads do not engage in the selling job; they only propagate the product. As companies may normally find it difficult to spare their own staff for such elaborate and time consuming work, they may hire the required people on a daily wage basis, train them briefly and use them under the supervision the of company staff.
Assembled and Delivered :. Media selection is not the only aspect that calls for great care in rural communication. The communication strategy as a whole requires unique the rural context. Experience shows that all companies, which have distinct strategies.
The following are a few examples of successful rural promotions which recognized the distinctiveness of the rural market. Market Segmentation in Rural Markets :. In addition to the major problem areas explained above, other aspects like market segmentation and product management also require a unique handling in rural markets. Let us first discuss market segmentation. It would be unwise for any firm to assume that the rural market is a homogeneous market and can be served with the same product-price- promotion combination.
Business firms have to carry out a thorough and data based market segmentation, select the relevant segments as their target market and develop distinctive positioning strategies and marketing mix for the chosen segments.
Fortunately, the rural market lends itself well to segmentation. In fact, it can be segmented in a number of ways using different bases. Geographic Segmentation :. In the first place, the rural market can be segmented geographically and different bases can be used for this segmentation. Climate can be the first of these bases; regions endowed with favorable climate are usually more prosperous compared with climatically handicapped regions. Level of irrigation can be another base.
Irrigated areas and dry land areas pose different marketing environments. And within irrigated areas, single crop; double crop and triple crop areas indicate varying levels of prosperity. Level of agricultural advancement in overall terms can also be a base. In this approach, parameters like adoption level of high yielding varieties, adoption level of fertilizer use and standard of agricultural practices will have to be reckoned with.
Studies have also revealed that in exposure and buying habits, those who are located near a feeder town are different from those living in the remote rural areas. It may be therefore, useful to segment the rural market into consumers who are located closer to a feeder town and consumers who are located away from the feeder towns.
Evidently, different. Approaches to marketing can be adopted to serve the two segments. Similarly, nearness to an industrial project center can also be used as a relevant consideration for segmentation.
There is a cross flow of population between project centers and rural hinterlands. As such, the project centers act as conduits for the flow of products and ideas. This fact can be used for segmentation. Demographically there are many possibilities of segmenting the rural market.
Population spread or population concentration can be one base. About 36 per cent of the rural population lives in seven per cent of the villages in the country and the remaining 64 per cent live in 93 per cent of the villages. The rural market can be segmented on the basis of different size classes with respect to population. Segmentation using age as the base also has a good scope in rural marketing. About 26 per cent of the rural population falls within the years age group. This means that there is a population of more than 15 crore in this age group in the rural market.
Similarly, there is a population of more than 20 crore in the age group of years in the rural market. It can serve as a base for segmentation.
Surveys have revealed that the younger generation dominates the purchases in the rural market. This is partly due to their greater literacy and exposure and partly due to their changing values and styles.
These facts are relevant to the marketing person. Literacy can be another base for demographic segmentation of the rural market. Though rural India, in general, is characterized by low literacy, there are wide variations in literacy within rural India.
For example, while the rural literacy rate in Kerala is 60 per cent that of Bihar is only 12 per cent. Income too can be a base. In fact, income will be a particularly useful base for segmenting the rural market since income distribution in the market is quite uneven. It will be unwise to assume that all people in a particular rural area will be able to consume a particular product. Product Management in Rural Markets :.
In product management, the most crucial decision in the rural context is whether the product that is sold in the urban market can be supplied to the rural market as it is or whether it must be adapted.
The decision depends on the situation and the nature of the product. The firm must find out what kind of product is required by the rural consumer and then make and supply the required product. In some cases, the same product may be equally acceptable in both rural and urban areas. In yet other cases, the basic product can be the same but the colour, size and package may have to be especially designed for the rural target group.
For example, in the paint. The rural market in India is made up of two broad compartments:. Not surprisingly, a survey carried out recently, indicates that the entire demand potential for manufactured goods that exists in this country has been largely untapped.
The truth, however, is that not even a fraction of the rural market has been serviced by the industries in the organized sector. New problems are emerging due to the invasion of corporations to take over the rural economy. One of them is opening up the rural sector to real estate development corporations, insurance companies, banking and transport, tele-communication, and power to give a surge to investment in rural industry. The Tatas have already established plants for preservation of perishable vegetables.
They have installed micro-processing plants for eradicating bacteria from fresh vegetables to ensure longer shelf life. These are examples of big business houses taking advantage of their position of vantage in acquisition of advanced technology. At present, agriculture is contributing 40 per cent of GDP, and showing a growth of 11 per cent. The capital industry is experiencing a much higher growth per cent in April end.
The share of the rural sector is 35 per cent in the total investment of the private sector. Factories for production of fertilizers and pesticides, farm implements and machinery, and motorised trollies are being located in the rural regions. Development would have been faster than, at present, if power and telecommunication facilities had been developed. A rough estimate of income in rural areas puts it at 1.
Till recently, it was strongly believed that the rural consumption pattern is traditional. The assumption led to the conclusion that the rural economy is static and devoid of dynamism. The awareness created by electric media began to change the traditional pattern of consumption. Watches, soaps, toothpastes, brushes, sewing machines fridges, TVs, transistors, record players. Hi-fi musical gadgets, allopathic medicines, fancy clothes, care, motorcycles, jeeps and gypsies are common durable consumer items in villages for the upper classes.
The members of the growing opulent class in the rural sector are educated. They are managing farms on commercial lines and have acquired a state for an urban life-style.
The houses, interior decoration, designs, architecture furnishing and fixtures resemble those of urban villages. The farmhouses have the guest rooms and servant quarters and poultries and dairies for the kitchen. The rich farmers are very rich. The economic activities have been vastly diversified from farming to real estate development. Rural market is more potential for consumer durables and services. Agriculture enjoys significant portion in export business, too.
Rural marketing improves agricultural sector and improved agricultural sector can boost whole economy of the country. Rural marketing can generate more attractive employment opportunities to rural and urban people. Growth of rural marketing leads to increased business operations, professional activities, and services that can generate a lot of employment opportunities.
Due to rural marketing system, rural buyers can easily access needed standard goods and services at fair prices. In the same way, rural marketing improves rural infrastructure. Additionally, rural marketing can also improve their income. These all aspects can directly improve living standard. Rural marketing leads to set up agro-based processing industries. Fruits, vegetables, cereals, pulses, etc. There are unlimited businesses opportunities exist in rural areas.
Untapped and underutilized resources can be utilized at optimum level and that can further accelerate overall economic growth.
Growth of rural marketing improves whole marketing system. Multiple options are available to farmers and local producers to market their products. Big domestic corporate houses and multinational companies prefer to buy agricultural products directly from villages by their own or through agents and small firms.
Rural producers can sell their produces easily at satisfactory prices. Their improved income level can improve their purchasing power that can further fuel to industrial demand. Rural marketing and basic infrastructures go hand to hand.
Growth of rural marketing leads to improved transportation, insurance, banking, communication, entertainment, and other facilities. Due to availability of basic infrastructural facilities, business units can easily reach the target rural buyers. Marketing results into better transportation, warehouses, and communication facilities. Agricultural products can be systematically marketed throughout the year.
Huge gap between demand and supply can be avoided and, as a result, prices of most of commodities remain more or less stable.
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