Evolution of Rural Marketing

Phase I (Prior to the 1960s)

In this phase rural economy was in very primitive stage, and there was limited scope was there for rural
marketing.

Prior to 1960s rural marketing was about transfer of products from rural to urban area. like sugarcane,
cotton seeds, milk

From urban to rural was mainly about agri input in rural area

Also, sales of agri machinery were very less

Phase II (1960s–1980s)

Green and white revolution change the face of rural economy of India. Better facilities for irrigation,
fertilizers, pesticides, and high-yield hybrid variety seeds, with the application of agri mechanization like
tractors, harvesters, power tillers, and sprinklers resulted in an exponential growth in agricultural
production, changing the very content of rural markets

The formation of village cooperatives societies has played a significant role in institutionalizing milk
production & processing.

New era of agri input marketing was emerged.

Village industries also received attention with formation of suitable organisation like KVIC (Khadi and
Village Industries Commission)

Very few FMCG began establishing their reach in rural areas.

Nirma was the first company that initiate and produce & sell for rural consumers.

Also at that time there were limited scope of home appliance for the companies like Usha, Murphy,
Phillips etc.

Phase III (1990s–2000)

In the first two-phase marketing of consumer durable in the rural market wasn't consider as a potential
market.

Main reasons for that were

1) company were busy on tapping higher potential market e.g urban market

2) potential of rural market wasn't at all visible for these product line.

3) Accessibility to rural market was very tough job

Continuously improvement in sale of agri input & Agri machinery.

Starting of evaluating true potential in rural market begin

Phase IV (After 2000)

After getting breakthrough in marketing models like Project Shakti & ITC e-Choupal, rural marketing
becomes an agenda for Indian & global corporations.

Increased in the integration of rural markets with global markets

Do you think marketing research in rural markets is different from urban markets?
Explain giving suitable examples on rural specific research tools.
Yes.

because in there is too much differentiation in between rural & urban customer.

like occupation

rural-cultivators
urban- Non-agri

Community size

rural-small
urban- Large

Population

rural-homogeneous
urban- heterogeneous

Social Differentiation

rural-low
urban- high

System of interaction

rural-less numerous contact

urban- more numerous contact

Participatory Rural Appraisals

mobility map, daily activity clock, process map, chapati diagram, wealth map & need assessment map

Scaling Tools for Quantitative research

Satisfaction scale, agreement scale & ranking ladder

activity clock
Aircel commissioned a research study to understand the mobile calling pattern of rural inhabitants in the
year 2009.

The objective of the study was to identify which is the best appropriate time slot for making promotional
& customized calls to different occupational groups in rural areas.

There were identified 5 occupational groups businessmen, farmers, students, the service class, and
labourers.

PRA tools, ‘activity clock’, was used for the research tool to get appropriate information that was
required for the study.

A daily activity clock mapping help to understand the voice calling pattern of each of the 5 groups, to
find out their high, medium, and low voice calling, and mobile switch-off periods on a daily basis.
This tool helped the company to identify the suitable time window for communicating with different
sets of consumers during their low voice calling periods, when they would not be too engaged in other
activities and hence could provide better attention.

Research Process
Defining business and research objectives
Determining the research budget
Designing the research (Approach, data sources, research tools- qualitative or quantitative)
Sampling method and size
Designing the research instrument (Questionnaire/discussion guide)
Fieldwork
Data collation and analysis
Reporting the findings for decision-making

Explain product, pricing and distribution strategy adopted by marketers in rural markets.

Product Innovation:

LG electronics

In late 90s Lg launched customized television specifically for a rural market name called Sampoorna.
T.V facilitated on-screen display in a different regional language like hindi, tamil & Bengali.

And company hit the sales with 1 lakh sets in the very first year.

Philips- Free Power Radio

This radio neither requires battery nor electricity for an operation.

Just one-minute winding of the spring with lever allows 30 minute listening time.

User-centric approach

Cadbury- ChocoBix biscuit

Based on the consumer insight Cadbury, that rural mother can opt for more affordable biscuits rather
than expensive chocolate bars for their children.

Parle- Glucose biscuit

Just for only 1Rs. customer will get 4 biscuits in it. Mainly sell at a tea stall.

Expected product

Micromax Mobile

Company targeted the rural consumer with economically priced also.

USP of the Micromax X1i was 30 days battery back-up and priced at 1,250 Rs.

This strategy enabled to endear the brand to rural market.

Pricing

Skimming Pricing
pricing strategy wherein a company charges the highest initial price that customers will pay for a
product. As the demand of the first customers is satisfied, the company lowers the price to attract
another, more price-sensitive segment.

Procter & Gamble- Ariel & Tide

Started with high prices and then later reduced them. They did this basically to create the image of a
superior product.

Bundle pricing
It involves combining several products and offering the bundle at a reduced price.

HUL-

HUL launched a combo pack comprising a Clinic shampoo bottle, a tube each of Pepsodent and Fair &
Lovely, and a Pond’s Dreamflower talc for rural areas.

They provided hampers at discounted prices of INR 5, INR 10, INR 15, and INR 20, in different sizes and
combinations.

Reliance Mobile

They created a revolution in India by launching a combo pack of handset and SIM card at INR 500, a very
affordable price for the common man

Value for Money

Chik Shampoo

With its focus on low prices along with a small unit size, was able to transform shampoo usage in rural
areas by increasing the penetration level.

Gillette

Gillette is holding >50% world blade & razor sales. But when it comes to rural market people can’t
purchase high end Gillette flagship products

So, Gillette launch Gillette-Guard comprising a blade and a light plastic handle at INR 15.

Penetrating pricing

Nirma

Nirma penetrating pricing strategy enabled it to establish the brand in the market quickly.
Nirma washing powder set a price significantly lower than the market rate to take on HUL’s Surf.
And also thry save their 25% of production cost by backward integration strategy.

Dish TV

low-cost set top boxes and cheaper monthly subscription schemes.

Also customer choice made packages that suit rural consumers interests.

Nokia

Nokia’s 1100 model at an affordable price for rural consumers.

At that time price of this mobile was around INR 690 to INR 920.

It has a radio, alarm, and flashlight, which are of great use to rural people.

Distribution

Coca-Cola

Refrigeration is more important as both electricity and refrigerators continue to be scarce in rural
markets of India.
Coca-Cola come up with its route-to-market strategy to win the rural markets.
In which greater focus was on refrigeration. So, in this strategy they provide shops with brine coolers
that can cool beverage for 12 hours without the electricity.
In other place Coca-Cola made up agreement with local ice-makers to tackle this bottleneck.

Modern Retail in Rural Areas

ITC’s Choupal Saagar

First rural mall in India to offer one stop solution under one roof. These mall is located near the ITC’s e-
choupals for making an integrated model.
It acts as a marketing hub by supplementing the farmgate presence of e-Choupal. It is a place where
farmers could sell directly to the parent company by bypass intermediaries, serving as the core
infrastructure to support ITC’s rural distribution strategy.

Farmers can come and sell their produce here, thereby providing themselves with cash, which they can
spend to purchase products.

Products & services- apparel, footwear, toys, games and music, horticulture products, agri input
products, and motor pumps, groceries, white goods, toiletries, and almost everything they need for the
family.

Like wise Hariyali Kisaan Bazaar, Tata Kisan Sansar, Godrej Aadhaar, 3A bazaar also enter in this modern
retail segment some of it failed also.

Tata Motors

Has added two indirect channels to increase its existing dealers network in semi urban towns where
population is more than 1 lakh.

Tata Motors Gram Mitras, commission to increase their sales teams.

Also Tata formed partnership with local gas station owners who can earn commission by feeding
customers to the automaker's dealer network.
That helped company to small commercial vehicle sales by 20%.

Idea Cellular

To replicate their urban direct-distribution model. Company stated recruiting and training of local
youths who reside near to the cell tower of the villages.

Also extend their reach ahead by adding local worker with Grammen Pratinidhis who need & want extra
income, and they visiting remote village by their own.

FINO PayTech

Company established a network of more than 38,000 Bandhus (self-employed). FINO provide
appropriate tech & pay fee to take over bank front end operations for perform the various services like
lending money, providing insurance, opening accounts, and settling remittances for the rural customers.

Bandhus earn 2000-3000 Rs in a month of supplemental income.

HUL- Project Shakti

HUL previously known as HLL (Hindustan Lever Limited) was wanted to increase their rural market
penetration.

For that company adopted SHG group base distribution strategy. And started project call Shaki in 2000.

Started initiated with SHG women to make HLL products available in 2000 peoples population village.
They remove retailer form the channel.
Company use 3-tier distribution network: first by clearing & forwarding agents (CFA) at state level, then
rural-distributors (RDs) at the district level who will delivered stocks to the doorstep of Shakti Dealers
(SDc) of remote villages.

They sometime penetrate in less than 1000 people population area.

Products are packaged in the smaller SKU so it become affordable to rural buyer and often cost half of
rupee each.
For the financial support to the Shakti Dealers company tie-up with microfinance institutions for
betterment of SDs and company can flourishing across India.

In the very beginning of this project SDc earning was ranging from 700-2000 INR per months that was
good at that time.

What are the factor Influencing rural consumer behaviour? Explain the consumer buying
behavior model by taking suitable example of your choice.
Cultural: culture, sub-culture, social class
In this factor individual behavior affect by his/her values, wants, perception & other behaviors
that he/she learned from the members of society.

Social: Reference group, family, role & status

In this factor we measured an individual’s combination of occupation, education, income,
wealth, and other similar variables.
Personal: Age & lifestyle stage, occupation, economic situation, lifestyle, personality and self
concept
This factor analyzed consumer behavior on the base of the buyer’s age and life-cycle.
Psychological: motivation, perception, learning, beliefs and attitudes

Example: Apple iPhone

Apple use cultural factor to target the customers, who always value newer technology and want
a product that have innovative features in that.
In order to fulfill their customer demand Apple understand their consumer and social factors
that influences consumer buying decision. For that they target mostly college going individuals.
When we look at Apple older mobile model like 5s & 5c version of iPhone. It was for two
different kind of different people of different generation.
Like 5c was for two different individual’s and they target according to them by lower price and
with color customize option. While 5s version that was at higher price and that offers more
features. So, it was targeted to individuals according to their lifecycle stage & economic
situation, lifestyle and also personality plays major role in it.
According to Apple innovation, boldness & creativity image attract consumers who feel &
believe the value of it they provide.
Psychological factors like motivation, perception, knowledge, attitude & belief. Customer who
already had experience with Apple they will become loyal to their brand and they will purchase
more of it products without doing any more research. Because the perception that brand give
to their customers, will influence buying decision of an individuals over and over.
NGO- 187, 234
Tata Tea- Gaon Chalo campaign

Tata Tea launch that campaign in December 2005, Gaon Chalo, meaning is ‘let’s go to the villages’.
And Tata Tea join hands with 12 NGOs to increase their reach across rural Uttar Pradesh.
At the end of 2006, Tata Tea added more than 20000 retailers, also added 500 new rural distributors, in
more than 10000 villages of the UP to strong their distribution network.
As part of initiative, agreements were signed with that NGOs (RD1-Rural Dealer-1) to act as the main
distributors of that particular district level, collecting products from company (Tata Tea) on credit before
they giving it out to rural distributors.
Raebareli, NGO, has been the principle partner with Tata Tea since, launching Project Gaon Chalo for
eight districts in Uttar Pradesh. Today, it has over 3,200 people working for project Gaon Chalo across
the eight districts, with 52 permanent employees on its payrolls. Let us understand the structure of
Project Gaon Chalo through this diagrammatic hierarchy.