Rural Marketing
RURAL AREA
The "rural sector" means any place as per the
latest census which meets the following criteria:• A population of less than 5000 people
• Density of population less than 400 per sq km
and
• More than 25% of the male working population
is engaged in agriculture pursuers.
RURAL MARKETING
The term can be defined in 3 parts:• Part 1(Before 1960):- Rural marketing referred to
selling of rural products in rural and urban areas
and agriculture inputs in rural markets.
• Part 2(1960-1990):- In this era green revolution
started from scientific farming and transferred
many of the poor villages into prosperous
business centers. Two separate area of activities
had emerged during this period‘marketing of
agriculture inputs’, ‘agriculture marketing’.
Part 3(After mid 1990’s):-Since 1990’s,India’s
industrial sector had gained in strength and
maturity. Its contribution to GNP increased
substantially. A new service sector had emerged
signifying the metamorphosis of
agricultural society into industrial society.
As a result of the above analysis, we are in a position
to
define rural marketing:“Rural marketing can be seen as a function which
manages all those activities involved in assessing,
stimulating and converting the purchasing power into
an effective demand for specific products and services,
and moving them to the people in rural area to create
satisfaction and a standard of living for them and
thereby achieves the goals of the organization”.
SIGNIFICANCE Of RURAL MARKET
A number of factors have been recognized as responsible for the rural
market boom. Some of them are:
1:- Increase in population, and hence increase in demand. The rural
population in 1971 was 43.80 crores, which increased to 50.20 crores in
1981, 60.21 crores in 1991 and 72.0 crores in 2011.
2:- A marked increase in the rural income due to agrarian prosperity.
3. Large inflow of investment for rural development programmes from
government and other sources.
4. Increased contact of rural people with their urban counterparts due to
development of transport and a wide communication network.
5. Increase in literacy and educational level among rural folks, and the
resultant inclination to lead sophisticated lives.
6. Inflow of foreign remittances and foreign made goods in rural areas.
WHY RURAL MARKETING IS HOT
• On nov. 16th to appraise farmers about the
latest technology and machinary ,A FARM
MACHINARY MELA was organized by the
department of agriculture.
• Four Consecutive years of positive growth
in rural GDP
• 40% hike in MSP of Crops over last two
years
• Farm Loan Waiver & NREGS
• Growing Industry Demand for land
(Overnight Wealth)
• Big rise in remittances from Cities
• Slowing urban demand forcing corporates
to rural markets
Why Rural Marketing is a
New Discipline?
Rural Marketing is a new discipline because:•
•
•
•
•
•
India is a predominantly agrarian society.
Western Marketing has no experience to
manage it.
Urban markets are saturating in India.
There are immense opportunities at the
bottom of the pyramid.
R. M. can change rural business.
Retail boom will also expedite the growth of
rural marketing.
Size of Rural Market
Estimated Annual Size : Rural Market
FMCG
Rs. 65000 Crore
Durables
Rs. 5000 Crore
Agri-inputs
tractors)
(incl. Rs. 45000 Crore
2/4 Wheelers
Rs. 8000 Crore
Total
Rs. 1,23,000 Crore
Rural v\s Urban
OCCUPATION:
Rural: Cultivators n few non –agricultural
pursuits.
Urban: manufacturing, trade, commerce,
professions
DENSITY OF POPULATION:
Rural density of population is lower than
urban
Mobility:• Rural: social mobility less.More migration
from villages to town.
• Urban: social mobility inreases with urbanity.
Size of Community:• Rural: open farms & small community are –vly
co-related
• Urban: urbanity & size of community are +vly
co-related
1. Large population
2. Raising prosperity
3. Growth in consumption
4. Life-style changes
5. Life-cycle advantages
6. Market growth rates higher than
urban
7. Rural marketing is not expensive
8. Remoteness is no longer a problem
Why Agriculture Growth
has been slow & tardy?
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Low priority to Agriculture
Subsistence Orientation of Agriculture
Failure of Land Reforms
Low size of operational Landholdings
Inadequate Food Supplies
Sluggish Infrastructural Growth
Disconnect between Research & Farmers
Insufficient Availability of Credit
Inadequate Inputs
Slowdown of Rural Industrialization
Retail Outlet
Policy Interventions
Required
1.
2.
3.
4.
5.
6.
7.
8.
9.
Thrust on Land Reforms
Strengthening the Panchayati Raj Institutions
Financial Inclusion (Innovative Credit Delivery)
Development of Rural Infrastructure
Expansion of Kisan Credit Card Scheme
Protection of Farmers from natural calamities
Extensive use of ICT
Higher Investment in Agriculture & Rural Development.
Focus on High Value Crops & Non-farm Incomes.
10.
Bridging the Gap Between Agri-Research & Farming.
Companies Already Into Rural Marketing
COMPANY
RURAL SALES (% OF TOTAL)
HUL
COLGATE
GODREJ
CAVIN CARE
MARICO
CADBURY
CIPLA
50
50
30
33
25
15
18
CHALLANGES
• Clearly the main challenge that one faces
while dealing with rural marketing is the basic
understanding of the rural consumer who is
very different from his urban counterpart. Also
distribution remains to be the single largest
problem marketers face today when it comes
to going rural. "Reaching your product to
remote locations spread over 6lacs villages and
poor infrastructure - roads, telecommunication
etc and lower levels of literacy are a few
hinges that come in the way of marketers to
reach the rural market.
Contin…….
• In 1998 HUL’s personal products unit initiated
Project Bharat, the first and largest rural hometo-home operation to have ever been prepared
by any company. The project covered 13
million rural households by the end of 1999.
• During the course of operation, HuL had vans
visiting villages across the country distributing
sample packs comprising a low-unit-price pack
each of shampoo, talcum powder, toothpaste
and skin cream priced at Rs. 15. This was to
create awareness of the company’s product
categories and of the affordability of the
products.
Some Examples And Strategies Applied
For Rural Marketing
Khaitan fans' ad on a horse cart
Contd…..
• The greatest challenge for advertisers and
marketers continues to be in finding the right
mix that will have a pan-Indian rural appeal.
Coca Cola, with their Aamir Khan ad
campaign succeeded in providing just that.
"Yaara da Tashan...” ads with Aamir Khan
created universal appeal for Coca Cola
• "Yaara da Tashan..." ads with Aamir Khan
created universal appeal for Coca Cola
• Coca-Cola India tapped the rural market in a
big way when it introduced bottles priced at Rs
5 and backed it with the Aamir Khan ads. The
company, on its behalf, has also been investing
steadily to build their infrastructure to meet the
growing needs of the rural market, which
reiterates the fact that this multinational has
realised the potential of the rural market is
going strength to strength to tap the same.
• Amul is another case in point of aggressive
rural marketing. Some of the other corporates
that are slowly making headway in this area
are Coca Cola India, Colgate, Eveready
Batteries, LG Electronics, Philips, BSNL, Life
Insurance Corporation, Cavin Kare, Britannia
and Hero Honda to name a few.
• Interestingly, the rural market is growing at a
far greater speed than its urban counterpart.
"All the data provided by various agencies like
NCAER, Francis Kanoi etc shows that rural
markets are growing faster than urban markets
in certain product categories at least. The share
of FMCG products in rural markets is 53 per
cent, durables boasts of 59 per cent market
share. Therefore one can claim that rural
markets are growing faster than urban markets
CONCLUSION
Thus, looking at the challenges and the
opportunities, which rural markets offer to the
marketers, it can be said that the future is very
promising for those who can understand the
dynamics of rural markets and exploit them to
their best advantage. a radical change in
attitudes of marketers towards the vibrant and
burgeoning rural markets is called for, so they
can successfully impress on the 230 million rural
consumers spread over approximately six
hundred thousand villages in rural india.