Rural marketing
rural markets are growing faster than urban markets
“Rural Marketing is Real Marketing”
Rural marketing is a process of planning, and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchange (for rural segments) that satisfy individual and organizational objectives.
Rural marketing is a process of developing, pricing, promoting, and distributing rural specific goods and services leading to desired exchange with rural customers to satisfy their needs and wants, and also to achieve organizational objectives.
Rural marketing is a process of developing, pricing, promoting, and distributing rural specific goods and services leading to desired exchange with rural customers to satisfy their needs and wants, and also to achieve organizational objectives.
Population density of less than 400 per sq.km.
At least 75% of the male working population is engaged in agriculture.
No municipality or board.
If we go by statistics, roughly around 70% of the Indian population lives in the rural areas. That is almost 12 % of the world population. To expand the market by tapping the countryside, more and more MNCs are foraying into India’s rural market.
73 % of Indian population and 12% of world population living in villages of india .
In India--- 28 states 600000 villages 4 major religions 1650 ethnic group 15 major languages 1350 dialects
POTENTIAL:-
Market
research firm Nielsen expects India’s rural FMCG market to reach a size of US$
100 billion by 2025. Another report by McKinsey Global Institute forecasts the
annual real income per household in rural India to rise to 3.6 per cent 2025,
from 2.8 per cent in the last 20 years.
as
per the census report 2003-04, there are total 638365 villages in India in
which nearly 70% of total population resides; out of them 35 % villages have
more than 1000 population.
Rural
per capita consumption expenditure grew by 11.5 per cent while the urban
expenditure grew by 9.6 per cent. There is a tremendous potential for consumer
durables like two-wheelers, small cars, television sets, refrigerators,
air-conditioners and household appliances in rural India.
Market
size
Rural India accounts for 60% of the total national demand
India’s
per capita GDP in rural regions has grown at a Compound Annual Growth Rate
(CAGR) of 6.2 per cent since 2000. The Fast Moving Consumer Goods (FMCG) sector
in rural and semi-urban India is expected to cross US$ 20 billion mark by 2018
and reach US$ 100 billion by 2025
The Indian rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share.
Size of Rural Markets:
FMCG Rs.65000 crore
Agri -inputs Rs.45000 crore
Durables (long life goods) 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) Size of Rural Markets
Rural India buys
Soft Drinks approx 45% of all soft drinks
Almost 50% motor cycles
Approx 55% of cigarettes
Half 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
NCAER projects that by 2009-10 the number of lower middle income households will rise to 80 million with 81% of it living in rural areas.
The growing high middle classes and shrinking lower income groups are a positive signal.
50% of the total rural FMCG consumption is in U.P, Maharastra, A.P and West Bengal.
Why go Rural?:
Rapidly change of brands in urban -No Brand loyalty
High saturation levels in urban
Greater awareness of brands in rural
Ever-growing aspirations in rural
No effects of slow down on rural markets
Greater opportunities for business
Large customer area ( 73 % customers live in rural area in India)
Low competition
Government Spending in Rural:Government Spending in Rural
The Indian rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share.
Apparently in terms of the number of people, the Indian rural market is almost twice as large as the entire market of USA or Russia.
According to India’s NCAER (National Council of Applied Economic Research), rural India has a population of about 750 million in around 200 million households distributed across 600,000 villages.
Though 350 million of these people are desperately poor and survive only at subsistence level, the remaining 400 million are economically better off due to a combination of 11 years of favorable monsoon conditions, increased agricultural yields and a rise in rural mini industries.
In fact, 50% of national income is generated in rural India.
According to India’s NCAER (National Council of Applied Economic Research), rural India has a population of about 750 million in around 200 million households distributed across 600,000 villages.
Though 350 million of these people are desperately poor and survive only at subsistence level, the remaining 400 million are economically better off due to a combination of 11 years of favorable monsoon conditions, increased agricultural yields and a rise in rural mini industries.
In fact, 50% of national income is generated in rural India.
Size of Rural Markets:
FMCG Rs.65000 crore
Agri -inputs Rs.45000 crore
Durables (long life goods) 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) Size of Rural Markets
Rural India buys
Soft Drinks approx 45% of all soft drinks
Almost 50% motor cycles
Approx 55% of cigarettes
Half 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
NCAER projects that by 2009-10 the number of lower middle income households will rise to 80 million with 81% of it living in rural areas.
The growing high middle classes and shrinking lower income groups are a positive signal.
50% of the total rural FMCG consumption is in U.P, Maharastra, A.P and West Bengal.
Why go Rural?:
Rapidly change of brands in urban -No Brand loyalty
High saturation levels in urban
Greater awareness of brands in rural
Ever-growing aspirations in rural
No effects of slow down on rural markets
Greater opportunities for business
Large customer area ( 73 % customers live in rural area in India)
Low competition
Government Spending in Rural:Government Spending in Rural
Population in Rural area
The Rural Population In India Accounts For Around 627 Million,
Which Is Exactly 74.3 Percent Of The Total Population.
The Rural Market In India Brings In Bigger Revenues In The Country,
As The Rural Regions Comprise Of The Maximum Consumers In This Country.
The Rural Market In Indian Economy Generates Almost More Than Half
Of The Country's Income.
“Rural Markets” Are Still
Unexploited.
Factors responsible for the rural market boom.
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
66.0 Crores In 2001. 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.
Redesign marketing plan to make it more rural specific.
1.
Know The Importance Of Women.
2.
Offer Small Unit Packing. JK Dairy Top Sachets Revolutionized The Market.
3.
Reinforce Product Quality Through Service Initiatives. Hero Honda Has
Established Mobile Service Centers To Take Care Of Rural Customers.
4.
Establish One-To-One Communication Channels. Reckit & Colman Uses Ngos In
Rural Area To Educate Customers About Product Benefits.
5.
Use Local Idioms To Convey Your Message In A Meaningful Context.
6.
Core Values Of Brand Must Strike The Consumer.
7.
Go Rural And Be Rural.
8.
Groom A Separate Set Of Professionals More Conversant With The Rural Markets.
Redesign marketing plan to make it more rural specific.
1.
Know The Importance Of Women.
2.
Offer Small Unit Packing. JK Dairy Top Sachets Revolutionized The Market.
3.
Reinforce Product Quality Through Service Initiatives. Hero Honda Has
Established Mobile Service Centers To Take Care Of Rural Customers.
4.
Establish One-To-One Communication Channels. Reckit & Colman Uses Ngos In
Rural Area To Educate Customers About Product Benefits.
5.
Use Local Idioms To Convey Your Message In A Meaningful Context.
6.
Core Values Of Brand Must Strike The Consumer.
7.
Go Rural And Be Rural.
8.
Groom A Separate Set Of Professionals More Conversant With The Rural Markets.
MAJOR PART OF RURAL MARKETING.
INCLUDES
RURAL TO URBAN
- A Rural Producer Seeks To Sell His Produce In Urban Market Like Seeds,
Fruits And Vegetables, Forest Produce, Spices, Milk And Related Products, Etc.
RURAL TO RURAL - • Includes The Activities That
Take Place Between Two Villages In Close Proximity To Each Other Like
Agricultural Tools, Handicrafts, Dress Materials, Bullock Carts, Etc.
URBAN TO RURAL - Transactions Of Urban Marketers
Who Sell Their Goods And Services In Rural Areas Pesticides, Fertilizers, FMCG Products,
Tractors, Bicycles, Consumer Durables, Etc.
Types of rural goods
Industrial goods
consumer goods
Industrial goods:-industrial rural goods are those use for further industrial processing. e.g. tabacoo , fibre crops like cotton and jute.
Consumer goods:-goods are mean for direct use like all foodgrains , dairy product, poultry products vegetables and fruits.
Agricultural goods include Agri -inputs, Implements, product of allied sectors like poultry, livestock etc. This market accounts for RS 450 Billion annually.
Services in rural include health care, telecommunications, banking, insurance and education etc.
Types of rural goods
Industrial goods
consumer goods
Industrial goods:-industrial rural goods are those use for further industrial processing. e.g. tabacoo , fibre crops like cotton and jute.
Consumer goods:-goods are mean for direct use like all foodgrains , dairy product, poultry products vegetables and fruits.
Services in rural include health care, telecommunications, banking, insurance and education etc.
PHASE ORIGIN FUNCTION MAJOR PRODUCT
SOURCE MARKET DESTINATION MARKET
Phase I Before mid1960(From independence to Green revolution)
Agricultural Marketing Agricultural produce ----Rural Urban
Phase II Mid sixties (Green revolution to Pre- liberalization
period) Marketing of Agricultural inputs Agricultural inputs ------Urban Rural
Phase III Mid nineties(Post- liberalization period in 20th century)
Rural Marketing Consumables and durables for consumption and production-----
Urban and rural Rural
Phase IV 21st century Developmental Marketing All products and
services -----Urban and rural Urban and rural
ROLE OF MEDIA IN RURAL MARKETING
The growth in conventional media has been quite significant; however, it has not been substantial.
Rural India consists of about 127 million households of which only 54% comes in contact with any of the conventional media, like press, TV, satellite, radio or cinema.
That means roughly 238 million are waiting to be tapped by the conventional media.
The entire communication and also the vehicles for the communicated message thus have to be different.
It has been noticed that below-the-line communication like alternative and innovative ways of communication played a key role in building reassurance and trust, and so it is vital.
The traditional media include melas, puppetry, folk theatre etc. while the modern media includes TV, radio, e-chaupal.
LIC uses puppets to educate rural masses about its insurance policies.
Govt of India uses puppetry in its campaigns to press ahead social issues.
Brook Bond Lipton India ltd used magicians effectively for launch of Kadak Chap Tea in Etawah district.
MELAS :Dabur uses these events to sell products like JANAM GHUTI(Gripe water).
Escorts also displays its products like tractors and motorcycles in such melas.
:Rural people like the sight of bright colours. COKE, PEPSI and TATA traders advertise their products through paintings.
Product demonstration Building rapport and establishing credibility
Reference groups: panchayats Baniyas/mahajans Rural bank’s officers
Media:Music Folk dances TV, video Media
Hindustan Unilever Its Project Shakti , (rural self-help group) is a classic example of involving women in the distribution network through empowering women
the corporate world are coming out with ‘ Rural malls’.
Rural Customers Demographic understanding:-
The popular image of a rural consumer is of one who has limited educational background, is exposed to limited products and brands, chooses price over quality, and is influenced by word-of- mouth communication. There is also the view that a rural consumer is no different from his urban counterpart. Changing consumption patterns reflect the evolving lifestyle of rural consumers. •Examining the lifestyle of the rural consumer helps to understand the consumption pattern and the influence of the environment on consumer behavior.
ROLE OF MEDIA IN RURAL MARKETING
The growth in conventional media has been quite significant; however, it has not been substantial.
Rural India consists of about 127 million households of which only 54% comes in contact with any of the conventional media, like press, TV, satellite, radio or cinema.
That means roughly 238 million are waiting to be tapped by the conventional media.
The entire communication and also the vehicles for the communicated message thus have to be different.
It has been noticed that below-the-line communication like alternative and innovative ways of communication played a key role in building reassurance and trust, and so it is vital.
The traditional media include melas, puppetry, folk theatre etc. while the modern media includes TV, radio, e-chaupal.
LIC uses puppets to educate rural masses about its insurance policies.
Govt of India uses puppetry in its campaigns to press ahead social issues.
Brook Bond Lipton India ltd used magicians effectively for launch of Kadak Chap Tea in Etawah district.
MELAS :Dabur uses these events to sell products like JANAM GHUTI(Gripe water).
Escorts also displays its products like tractors and motorcycles in such melas.
:Rural people like the sight of bright colours. COKE, PEPSI and TATA traders advertise their products through paintings.
Product demonstration Building rapport and establishing credibility
Reference groups: panchayats Baniyas/mahajans Rural bank’s officers
Media:Music Folk dances TV, video Media
Hindustan Unilever Its Project Shakti , (rural self-help group) is a classic example of involving women in the distribution network through empowering women
the corporate world are coming out with ‘ Rural malls’.
Rural Customers Demographic understanding:-
The popular image of a rural consumer is of one who has limited educational background, is exposed to limited products and brands, chooses price over quality, and is influenced by word-of- mouth communication. There is also the view that a rural consumer is no different from his urban counterpart. Changing consumption patterns reflect the evolving lifestyle of rural consumers. •Examining the lifestyle of the rural consumer helps to understand the consumption pattern and the influence of the environment on consumer behavior.
Recent
Developments
Following
are some of the major investments and developments in the Indian rural sector.
India's
unemployment rate has declined to 4.8 per cent in February 2017 compared to 9.5
per cent in August 2016, as a result of the Government's increased focus
towards rural jobs and the Mahatma Gandhi National Rural Employment Guarantee
Act (MGNREGA) scheme.
The
Ministry of Rural Development is expecting to achieve its annual targeted length
of 48,812 kilometers of rural roads by March 31, 2017 under the Pradhan Mantri
Gram Sadak Yojana (PMGSY), which has reached a completion stage of 67.53 per
cent (32,963 kms) as on January 27, 2017.
The
National Bank for Agriculture and Rural Development (NABARD) plans to provide
around 200,000 point-of-sale (PoS) machines in 100,000 villages and distribute
RuPay cards to over 34 million farmers across India, to enable farmers to
undertake cashless transactions.
Magma
Fincorp, a Kolkata-based non-banking finance company (NBFC) plans to expand its
operations in South India, with specific focus on rural and semi-urban markets
to help the company grow rapidly.
Bharti
Airtel is applying for a payments bank licence and has involved Kotak Mahindra
Bank as a potential investor in the venture, in a bid to tap significant
revenue opportunities from the Reserve Bank of India's financial inclusion
initiative. Payments banks are meant to fan out into the rural, remote areas of
the country, offering limited but critical services such as money transfers,
loans and deposit collection. While banks have the knowhow, telecom companies
have the network, making it an ideal match.
Government
Initiatives
The
Government of India has planned various initiatives to provide and improve the
infrastructure in rural areas which can have a multiplier effect in increasing
movements of goods, services and thereby improve earnings potential of rural
areas subsequently improving consumption.
Various
factors which have made Rule Markets viable
Large
population
Raising
prosperity
Growth
in consumption
Life-style
changes
Life-cycle
advantages
Market
growth rates higher than urban
Rural
marketing is not expensive
Remoteness
is no longer a problem
Factors
which Contributes to the Growth of Rural Markets
Government
initiatives
Rising
literacy levels
Infrastructural
facilities
New
employment opportunities
Rising
mass media
Agricultural
research
Marketing
efforts
Urban
influence
Features
of Rural Marketing
Large
and scattered population
Higher
purchasing capacity
Market
growth
Development
of infrastructure
Low
standard of living
Traditional
outlook
Marketing
mix
Problems
Faced in Rural Marketing
Deprived
people and deprived markets
Lack
of communication facilities
Transport
Many
languages and dialects
Dispersed
markets
Low
per capita Income
Low
levels of literacy
Prevalence
of spurious brands and seasonal demand
Different
way of thinking
Warehousing
problem
Problems
in sales force management
Distribution
problem
DISTRIBUTION
Wholesaling. Retailers. Mobile Traders. Vans. Weekly Haats.
Wholesaling:50% of the rural consumption is routed through these wholesalers located in feeder villages providing products to rural retailers.
The e-choupal network is being used by more than 50 companies.
Contract farming to strengthen supply side, HUL Rallies and ICICI bank with wheat farmers,
PepsiCo and many cotton purchasing industries.
Samsung partners with IIFCO to distribute their handsets,
P&G has agreements with Godrej, Marico and Nirma.
Post offices act as business correspondent of SBI in unbanked areas.
Nokia “Care on Wheels” initiative to provide after sales service, build loyalty and supplement distribution network.
Wholesaling:
50% of the rural consumption is routed through these wholesalers located in feeder villages providing products to rural retailers.
Vans and rural Mobile Traders:Considering the distributed nature of villages and demand pattern Vans may prove to be an effective tool.
Serves dual purpose of promotion and distribution.
Mobile traders selling local or unbranded on bicycle, tricycles or hand cart etc.
Although they don’t have any formal association but may be tapped and brought into organized retail Vans and rural Mobile Traders
Haats/ Shandies:With more than 43,000 small and big haats they offer excellent opportunity for marketers.
Total shopping experience.
81% are regular haat buyers, 58% buy specific product.
They believe that the product in Haat is of better quality and better price.
Provides them the pleasure of bargain.
Van route may be fixed catering to Haats of a particular region. Haats/ Shandies
PDS Network:
PDS Network Central Government Food Corporation of India 23 Zonal offices 1560 Depots 173 District offices Fair Price Shops Orders for procurement Commission on Agricultural costs and Prices Recommends Min Support Price Procurement Storage Transportation Bulk allocation
Common Rural Distribution Models:Common Rural Distribution Models
Prevalent Rural Distribution models:Van Operation: Stockists from nearby urban markets cover 4-5 villages daily covering 60-70 Km per day, provides better control over distribution.
Sub Stockists (10-15)gets stock from Super stockists appointed in district.
Sub stockists a local person has more information about the market and can cover 4-5 satellite markets along with regular markets. Prevalent Rural Distribution models
Wholesaler Company C & F A Sub-distributor Distributor Urban Distributor Rural Wholesaler Retailer Rural Retailer Local Retailer Satellite Mkt Retailer Urban Retailer Urban Model 1
Company C & F A Depot Distributor Wholesaler Retailer Retailer (Local) Model 2
BP Energy: Fuel pellets made from agri- waste to run smokeless stoves, has sold them to more than 2,00,000 households by 2008.
Nokia multilingual keypads, FM radio, Flashlight etc. HUL operation Harvest:
Audio Visual Vans targeting 30,000 high potential villages covering 6 villages each day, using popular film songs and sequence and distributing free samples of products.
CHALLENEGES:-
Reaching 6 lakh villages and feeding 35 lakh village shops is a challenging task.
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 600,000 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
High initial market development expenditure;
Generating effective demand for manufactured foods;
Wholesale and dealer network problems;
Mass communication and promotion problems;
Banking and credit problems;
Management and sales managing problems;
Market research problems;
Inadequate infrastructure facilities;
Highly dispersed and thinly populated markets;
Low level of exposure to different product categories and product brands;
Cultural gap between urban based marketers and rural consumers.
THE MAJOR HURDLES IN TAPPING THE RURAL MARKETS CAN BE SUMMARISED AS:
THE RETAILERS WHO WANT TO VENTURE INTO RURAL ORGANIZED RETAIL WILL HAVE TO FACE THE CHALLENGES OF AVAILABILITY, AFFORDABILITY, ACCEPTABILITY AND AWARENESS (THE SO-CALLED 4 A’S) :
The first challenge is to ensure availability of the product or service.
The second challenge is to ensure affordability of the product or service.
The third challenge is to gain acceptability for the modern store formats and new products.
Therefore; there is a need to offer products that suit the rural market in a no-frills environment.
The most important challenge that of building awareness is very crucial.
Eveready is the only organization to have a fleet of 1000+ vans.
SUCCESSFUL :- PROJECTS IN RURAL AREAS
Hindustan Lever Limited ( HuL ) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'.
'Operation Bharat'.
In 1998 HuL’s personal products unit initiated Project Bharat, the first and largest rural home-to-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.
Shakti- though the state governments and NGO’S involved in microfinance women entrepreneurs in villages are identified to act as local distribution and sales point for HUL products
In 2000, ITC took an initiative to develop direct contact with farmers who lived in far-flung villages in Madhya Pradesh.
DISTRIBUTION
Wholesaling. Retailers. Mobile Traders. Vans. Weekly Haats.
Wholesaling:50% of the rural consumption is routed through these wholesalers located in feeder villages providing products to rural retailers.
The e-choupal network is being used by more than 50 companies.
Contract farming to strengthen supply side, HUL Rallies and ICICI bank with wheat farmers,
PepsiCo and many cotton purchasing industries.
Samsung partners with IIFCO to distribute their handsets,
P&G has agreements with Godrej, Marico and Nirma.
Post offices act as business correspondent of SBI in unbanked areas.
Nokia “Care on Wheels” initiative to provide after sales service, build loyalty and supplement distribution network.
Wholesaling:
50% of the rural consumption is routed through these wholesalers located in feeder villages providing products to rural retailers.
Vans and rural Mobile Traders:Considering the distributed nature of villages and demand pattern Vans may prove to be an effective tool.
Serves dual purpose of promotion and distribution.
Mobile traders selling local or unbranded on bicycle, tricycles or hand cart etc.
Although they don’t have any formal association but may be tapped and brought into organized retail Vans and rural Mobile Traders
Haats/ Shandies:With more than 43,000 small and big haats they offer excellent opportunity for marketers.
Total shopping experience.
81% are regular haat buyers, 58% buy specific product.
They believe that the product in Haat is of better quality and better price.
Provides them the pleasure of bargain.
Van route may be fixed catering to Haats of a particular region. Haats/ Shandies
PDS Network:
PDS Network Central Government Food Corporation of India 23 Zonal offices 1560 Depots 173 District offices Fair Price Shops Orders for procurement Commission on Agricultural costs and Prices Recommends Min Support Price Procurement Storage Transportation Bulk allocation
Common Rural Distribution Models:Common Rural Distribution Models
Prevalent Rural Distribution models:Van Operation: Stockists from nearby urban markets cover 4-5 villages daily covering 60-70 Km per day, provides better control over distribution.
Sub Stockists (10-15)gets stock from Super stockists appointed in district.
Sub stockists a local person has more information about the market and can cover 4-5 satellite markets along with regular markets. Prevalent Rural Distribution models
Wholesaler Company C & F A Sub-distributor Distributor Urban Distributor Rural Wholesaler Retailer Rural Retailer Local Retailer Satellite Mkt Retailer Urban Retailer Urban Model 1
Company C & F A Depot Distributor Wholesaler Retailer Retailer (Local) Model 2
BP Energy: Fuel pellets made from agri- waste to run smokeless stoves, has sold them to more than 2,00,000 households by 2008.
Nokia multilingual keypads, FM radio, Flashlight etc. HUL operation Harvest:
Audio Visual Vans targeting 30,000 high potential villages covering 6 villages each day, using popular film songs and sequence and distributing free samples of products.
CHALLENEGES:-
Reaching 6 lakh villages and feeding 35 lakh village shops is a challenging task.
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 600,000 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
High initial market development expenditure;
Generating effective demand for manufactured foods;
Wholesale and dealer network problems;
Mass communication and promotion problems;
Banking and credit problems;
Management and sales managing problems;
Market research problems;
Inadequate infrastructure facilities;
Highly dispersed and thinly populated markets;
Low level of exposure to different product categories and product brands;
Cultural gap between urban based marketers and rural consumers.
THE MAJOR HURDLES IN TAPPING THE RURAL MARKETS CAN BE SUMMARISED AS:
THE RETAILERS WHO WANT TO VENTURE INTO RURAL ORGANIZED RETAIL WILL HAVE TO FACE THE CHALLENGES OF AVAILABILITY, AFFORDABILITY, ACCEPTABILITY AND AWARENESS (THE SO-CALLED 4 A’S) :
The first challenge is to ensure availability of the product or service.
The second challenge is to ensure affordability of the product or service.
The third challenge is to gain acceptability for the modern store formats and new products.
Therefore; there is a need to offer products that suit the rural market in a no-frills environment.
The most important challenge that of building awareness is very crucial.
SUCCESSFUL :- PROJECTS IN RURAL AREAS
Hindustan Lever Limited ( HuL ) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'.
'Operation Bharat'.
Shakti- though the state governments and NGO’S involved in microfinance women entrepreneurs in villages are identified to act as local distribution and sales point for HUL products
In 2000, ITC took an initiative to develop direct contact with farmers who lived in far-flung villages in Madhya Pradesh.
ADVT SUCCESS:
"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.
cOMPANIES INTEREST IN RURAL MKTG
Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.
EXAMPLES
companies following rural marketing:companies following rural marketing Parle G Hero Honda Airtel
Parle g:Parle g Established in 1929 1st-brands-Parle Glucose and Parle Monaco Market leaders in many products 35%share of the total biscuit market 15% share of the total confectionary market 70% share in glucose biscuits Parle has largest manufacturing units in India Estimated brands worth Rs 2000
"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.
cOMPANIES INTEREST IN RURAL MKTG
Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.
companies following rural marketing:companies following rural marketing Parle G Hero Honda Airtel
Parle g:Parle g Established in 1929 1st-brands-Parle Glucose and Parle Monaco Market leaders in many products 35%share of the total biscuit market 15% share of the total confectionary market 70% share in glucose biscuits Parle has largest manufacturing units in India Estimated brands worth Rs 2000
Electrolux is working on a made-for India fridge designed to serve basic purposes: chill drinking water, keep cooked food fresh, and to withstand long power cuts.
(Max LPG gas cylinder, Mahindra MaXX, Vardaan Bidi of Dalmiya Consumer Care).
Godrej started ‘Swayam Shikshan Prayog’ with the help of some SHG to co-create a mini fridge without a compressor that runs on battery, weighs less than 8 kg, has a top loading storage system and is priced at 3,200 Rs only.
LG
Earns 35% of Indian revenues from rural markets. In 1998 the company came up with Sampoorna TV after carefully analyzing the needs of rural customer. LG spent US$ 50,000 in developing a unit with on-screen display options in regional languages. Price:Rs.14,400;Sold 1 lakh units in the first year itself. Extensive distribution to provide product and after sales service to the customers. Started a 211 or Service when you want initiative to handle every customer complaint within 24 hours.
Hero Honda
40% sales from rural areas. Fuel efficiency and smaller engine as growth drivers. Usage and attitude analysis as a biannual exercise. Rural footprints a quarterly exercise to map different events in villages. Take brand to customers when he is happy during good harvest, festivals, marriages and when cash is in hand. Har Gaon Har Angan has 500 sales representatives two months waves during April and Sept-Oct. Each wave has resulted in additional sales of 15-16000 motorcycles.
Har Gaon Har Angan covers various activities like free service and check up camps, obtaining driving license, safe riding, educational programs etc. Sikhao Baliye to persuade rural women to drive. Authorised Representative of Dealers added to ensure deeper penetration in villages.
Thomson Reuters
Thomson Reuters in world largest multi media agency. The agency runs a personalized information service for farmers called Reuters Market Light (RML), started 2 years ago. Each day over 1,00,000 farmers in Maharastra, Haryana and Punjab receive text messages on their mobiles giving them spot prices of their chosen crop, crop related news and advice, agri input price information in the language of their choice. RML expects to have more than I million subscribers in next three years Reuters Market Light
The subscription can be bought for 3, 6 or 12 months at a price of less than US$ 3 per month. RML offers information on more than 250 crops, more than 1000 markets and 1800 weather locations. RML has its own team of reporters who track prices in 600 mandis and content sharing partnerships with agricultural universities. RML Direct card is available with more than 4000 retail outlets. Within first 23 months more than 250,000 RML quarterly subscriptions were sold in 10,000 villages.
(Max LPG gas cylinder, Mahindra MaXX, Vardaan Bidi of Dalmiya Consumer Care).
Godrej started ‘Swayam Shikshan Prayog’ with the help of some SHG to co-create a mini fridge without a compressor that runs on battery, weighs less than 8 kg, has a top loading storage system and is priced at 3,200 Rs only.
LG
Earns 35% of Indian revenues from rural markets. In 1998 the company came up with Sampoorna TV after carefully analyzing the needs of rural customer. LG spent US$ 50,000 in developing a unit with on-screen display options in regional languages. Price:Rs.14,400;Sold 1 lakh units in the first year itself. Extensive distribution to provide product and after sales service to the customers. Started a 211 or Service when you want initiative to handle every customer complaint within 24 hours.
Hero Honda
40% sales from rural areas. Fuel efficiency and smaller engine as growth drivers. Usage and attitude analysis as a biannual exercise. Rural footprints a quarterly exercise to map different events in villages. Take brand to customers when he is happy during good harvest, festivals, marriages and when cash is in hand. Har Gaon Har Angan has 500 sales representatives two months waves during April and Sept-Oct. Each wave has resulted in additional sales of 15-16000 motorcycles.
Har Gaon Har Angan covers various activities like free service and check up camps, obtaining driving license, safe riding, educational programs etc. Sikhao Baliye to persuade rural women to drive. Authorised Representative of Dealers added to ensure deeper penetration in villages.
Thomson Reuters
Thomson Reuters in world largest multi media agency. The agency runs a personalized information service for farmers called Reuters Market Light (RML), started 2 years ago. Each day over 1,00,000 farmers in Maharastra, Haryana and Punjab receive text messages on their mobiles giving them spot prices of their chosen crop, crop related news and advice, agri input price information in the language of their choice. RML expects to have more than I million subscribers in next three years Reuters Market Light
The subscription can be bought for 3, 6 or 12 months at a price of less than US$ 3 per month. RML offers information on more than 250 crops, more than 1000 markets and 1800 weather locations. RML has its own team of reporters who track prices in 600 mandis and content sharing partnerships with agricultural universities. RML Direct card is available with more than 4000 retail outlets. Within first 23 months more than 250,000 RML quarterly subscriptions were sold in 10,000 villages.
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