Rural Marketing

Some Insights
 Why go Rural?
• Increasing competition in Urban markets
• Market size
• Socio economic changes in rural India
• Growing population in rural markets
• Income generation through self-help groups
• Change in rural consumer behaviour
• Accessibility of markets to near towns
Government Spending in Rural
• ALL RESULTING IN FARMERS
INCOME RISING
• Tremendous opportunities for existing and
new brands to enter rural markets
 Size of Rural Markets
FMCG Rs.65000 crore
Agri-inputs Rs.45000 crore
Durables Rs.5000 crore
Automobiles (2 & 4 Wheelers) Rs.8000 crore
Clothes, footwear etc. Rs.35000 crore
Construction material Rs.15000 crore
Total Rs.173000 crore
Source: CII Report (2008)
 Rural Market Segmentation
• Geographical location
• Population density
• Gender and age
• Occupation
• Income levels
• Socio cultural considerations
• Language and literacy
• Life style
 Others methods of Segmentation
• Land holding pattern
• Irrigation facilities
• Cropping pattern
• Education level
• Proximity to cities
• Occupation categories(labourer, farmer,
employees etc.,)
 Product Planning
• Product must be simple in design-simple to understand,
operate, maintain and repair
• Functional aspects rather than sophisticated looks should
be stressed
• Price should be within economic competence of rural
consumers
• Packaging should be simple, facilitate product use, should
not add to cost and lead to economy in use of the product
• The brand name should suit rural background
 Building Brands in Rural India
• Contrary to popular belief people in
Rural India are fiercely brand loyal
– Single Brand Villages
• Once converted, difficult to dislodge
them
• First mover advantages
Route to Brand Building in Rural
• Build customisation
– Chotukool from Godrej Boyce, a nano
refrigerator (43 litres cool box loaded from top)
– Co-created using suggestions from rural women
and sold by rural women
 Route to Brand Building in Rural
• Build Empathy / Relevance
– Nokia ‘Life Tools’ for farming and rural community
– Agri information to farmers in association with Reuters
– Imparting of knowledge of English language to
students by teaching one new word every day
Route to Brand Building in Rural
• Build Recognition
– Rural folks understands symbols and colours
better.
• ‘Pahelwan’ Chap – MRF
• ‘Haathi’ – Beedi
• ‘Laal Sabun’ – Lifebuoy
• Peela Powder - Nirma
• This also leads to duplicates and spurious
products
• Largely sold in the Haats (weekly markets)
in Rural India
– Rs.12000 crore p.a. is the estimated loss to
FMCG sector
 Pricing Decisions
• Price sensitive / value conscious
• Examine ways to make the product affordable to large
number of consumers in the rural markets
• In case of non-consumer durable, it is possible to design
smaller pack sizes or units sizes
• In case of consumer durable and farm machinery, such as
motor cycles, TVs, refrigerators, tractors, pumps etc., the
marketers may arrangements with some banks for
financing customers at low rates of interest or make
arrangements with his dealers to offer products on
installments.
 Pricing Strategies
• Linked more to product positioning and packaging.
• It is wrong to presume that only cheap brands or low
priced products are sell in rural markets.
• See value for price ie., utility value
• Rural consumers are ready to buy higher priced products
particularly after harvesting time and festival season.
• Price and positioning decisions influenced not just by the
income received and how it is to allocated among different
needs of the rural consumers.
 Distribution Strategies
• Build Access
– Distribution in rural India is not a nightmare
– For FMCG reach villages (feeder markets) in
towns with population 10000 to 15000
– For consumer durables reach towns with
population of 50000+ and also
– Look at opportunities in haats, melas, post
offices, public distribution system etc.
 Distribution Strategies
• Build word of mouth
– Through effective communication using
specific communication package aimed at
specific rural audience
 Distribution Strategies
• Build word-of-mouth
– Importance of opinion leaders
– Educated village youth as opinion leaders
– Women and children as demand generators
– Customised events targeting specific groups
with focused communication
 Rural
Rich

Aspiring
Middle Class

Bottom of the
Pyramid
 Ideal Media Strategy for
Reaching Rural Audiences
R Rural Cinema
U
Mass Media
R Radio
Plus Opinion A
TV
Leaders L
Direct Marketing
M Un-
Efforts
A conventional
SS Media
E Focused
S Events
Other Points to Remember
Understanding the Characteristics of
the Rural Masses
• Very intelligent and clever – cannot be easily
hoodwinked.
• Daily activity is routinised
– Plenty of time / No Sundays
• Very conscious of value for money
 Understanding the Characteristics of
the Rural Masses
• Does not like to pay extra for frills he cannot use.
– Eg. Colour TV
• High involvement in any product purchased
– Eg. Durables
 Characteristics…
• Perceptions, traditions, values vary from
state to state and in some cases from region
to region within a state.(MRF Bullock Cart
Tyres)
• Divisions based on caste, community and
other hierarchical factors continue to exist.
So how do we communicate with
the Rural Folks?
 Rural Communication
• Keep the communication simple…(poor
literacy level)
– No scope for gimmicks
• Take time in communicating the message
– Quickies have no impact.
• Think in the local language to capture the local
spirit in the communication aimed at specific
region.
 Rural Communication
• Demonstration – a key element for success
• The scope of print media is not viable
Shampoo Demonstration
 Dalda
Vanaspathi
Demonstration
Demonstration
 Analogies help in better
comprehension.
• Examples
– MRF Bullock Cart tyre
– Tafe Tyres
 Rural Communication…
• Television does not distinguish between
urban and rural
• You may be able to get away with a
common TVC for both urban and rural
audience particularly for FMCG products…
provided your communication is not
gimmicky, suggestive and is easy to
comprehend.
 Rural Communication…
• But when it comes to Durables, where rational
decisions are involved, it is advisable to target the
opinion leaders first.
• While urban oriented TVC may register with
opinion leaders and help create awareness, for real
impact down the line, a region specific and need
specific communication programme has to be
devised which provides for demonstration and
touch & feel of the products.
 Possible media mix
Formal media non-formal
• TV Audio visual
• Cinema publicity vans
• Radio puppet shows
• Print media demonstrations
• Outdoor announcements
• Pops music records
 Strategies for Rural Marketing

• Use of few select rural distributors and retailers to stock their goods but no
direct interaction with prospective consumer
• Use of print media or radio but no alternate form of advertising for
promotion their brands
• More focus on price of product but less attention devoted to quality or
durability
• Same products fractures for urban and rural setting with no customization
for rural areas despite differences in the market environment
• Low frequency of marketing campaigns
• Little uses of villages congregations like haats and meals to sell the
products
• More focus on men as decision makers and buyers
 Hurdles in Rural Marketing
• High distribution costs
• High initial market development expenditure
• Inability of the small retailer to carry stock without adequate
credit facility
• Generating effective demand for manufactured foods
• Wholesale and dealer network problems
• Mass communication and promotion problems
• Banking credit problems
• Management and sales managing problems
• Market research problems
 Hurdles in Rural Marketing
• Inadequate infrastructure facilities (lack of physical
distribution, roads warehouses and media availability )
• Highly dispersed and thinly populated markets
• Low percapita and poor standards of living, social, economic
and cultural backwardness of the rural masses
• Low level of exposure to different product categories and
product brands
• Cultural gap between urban based marketers and rural
consumers
Thank you