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Acknowledgement

I heartily wish to extend heartfelt appreciation and gratitude to numerous Mentors, benefactors, and constituents who have collectively endowed the Wherewithal, faith and encouragement for me to navigate and complete my Project journey.

To Professor

amlesh Mishra, my primary advisor and unflagging advocate, who mustered

devoted, continuing, innovative and adaptive mentorship to impel and shepherd my chec!ed efforts through diverse and abounding challenges, I extend my deep and abiding respect and many, many than!s.

To "r. #ohit $ingh, my supporting advisor, who gently and patiently endured my academic tardiness, I offer commensurate veneration. Regards By, $agar %rora. &ishit "eora. 'aurav "hingra. $hubham Te!riwal.

Contents

Contents...................................................................................................................................... 3 IMPACT O MA!"#TI$% &T!AT#%I#& O$ I$'IA$ !(!A) MA!"#T....................................* I$T!O'(CTIO$+........................................................................................................................ * ($'#!&TA$'I$% !(!A) CO$&(M#!&................................................................................., C-A))#$%#& O !(!A) MA!"#TI$%+.................................................................................... MA!"#TI$% MI/ O! !(!A) MA!"#T&................................................................................0 -O1 %OO' A!# T-#&# &T!AT#%I#& I$ !(!A) MA!"#TI$%+.........................................23 O4&#!5ATIO$......................................................................................................................... 33 CO$C)(&IO$+.......................................................................................................................... 33

IMPACT OF MARKETING TRATEGIE ON IN!IAN R"RA# MARKET

INTRO!"CTION$ The rural mar!ets are estimated to be growing fastly compared to the urban mar!ets. The potentiality of rural mar!ets is said to be li!e a (wo!en up sleeping giant(. These facts are substantiated in a study of mar!et growth conducted by various researches. In recent years, rural mar!ets have ac)uired significance in country li!e India. *n account of the green revolution in India, the rural areas are consuming a large )uantity of industrial and urban manufactured products. The Indian rural mar!et is very vast in si+e and in demand base. It offers great opportunities to mar!eters. %bout ,-. million of countries consumers live in rural areas and almost half of the national income are generated here. #ural mar!ets form an important part of the total mar!et of India. In India approximately there are /, 01,111 villages, which can be listed in different parameters such as literacy levels, income levels, penetration, distances etc. The rural mar!et is not homogeneous. There are differences in 'eographical, demographical, statistical and logistical levels. The specific sections of rural mar!et are not too big, although the overall si+e is large. The rural consumer is growing and this is an opportunity to capture the mar!et share for all the players in the mar!et. Positioning and realities regarding the potential of each of these mar!et segments differ and lie at the very core of forming the strategy for the rural mar!ets. WHAT IS RURAL? %ccording to the census of India village with clear surveyed boundaries not having a municipality, corporation or board, with density of population not more than -11s).!m and with at least ,2 per cent of the male wor!ing population engaged in agriculture and allied activities would )uality as rural. %ccording to this definition, there are /.03,111 villages in the country. *f these, only 1.2 cent has a population above 41,111 and . per cent have population between 2,111 and 41,111. %round 21 per cent has a population less than .11.

WHAT IS RURAL MARKETING? #ural mar!eting is a function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into an effective demand for specific products and services to the people in rural areas to create satisfaction and a better standard of living. In other words, #ural mar!eting is a process of developing, pricing, promoting, distributing rural specific goods and services leading to exchanges between urban and rural mar!ets, which satisfies consumer demand and also achieves organi+ational objectives. Thus, rural mar!eting is a two5way mar!eting process that includes the flow of goods and services from rural to urban areas and the flow of goods and services from urban to rural areas, as well as the flow of goods and services within rural areas.

"N!ER TAN!ING R"RA# CON "MER % complex set of factors influence rural consumers behaviour. $ocial norms, traditions, caste and social customs have greater influence in consumer behaviour in rural areas than in urban areas. The seasonality of agricultural production influences the seasonality of rural consumers demand. 'iven the fact that the landless laborers and daily wage earners receive their income in installments, their purchasing is restricted to small )uantities of products at a time, mostly on a daily basis or once in two or three days. Purchase decision process and presences also show certain characteristics that are )uite significant implications. 6xhibitions and road shows act as some of the !ey triggers for information search behaviour. *pinion leaders and people who are perceived to be !nowledgeable play an important role as information providers and advisors. Word of mouth has more significance in the purchase decisions of rural consumers. %s the perceived ris! of buying tends to be higher, rural consumers exhibit a greater involvement in the purchasing process. 7eading to a more detailed information search behaviour. 8amily members, relatives and friends are consulted before ma!ing purchase decisions by rural consumers. $ince the reach of electronic media and other mass advertising is low in rural areas, dependence on information, advice and suggestions from other people are higher.

EGMENTING R"RA# MARKET $egmenting is the process of dividing a heterogeneous mar!et into several sub5mar!ets, each of which tends to be homogenous in a significant ways. 8ollowing are some predominant factors which necessitate the segmentation of rural mar!ets. 9eterogeneity in rural mar!ets. $ocio5cultural differences across regions :ariation in population si+e and population density of village "ifferences in levels of infrastructural development Media exposure levels :ariation in literacy levels "ifferences in income levels and patterns of income flow 8amily structure

#ural mar!ets can be segmented using multiple dimensions such as geographic, demographic, psychographic and behavioural basis. *ne useful segmentation scheme for rural mar!et is the socio5economic classification using the occupation of the chief wage5earner and the type house that they live.

Common %as&s 'or segmentat&on Geogra()&c #egion; east, west, north, south "ensity< low, moderate, high =limate< summer. #ainy, winter !emogra()&c Psyc)ogra()&c $ocial class 7ifestyle Personality %ge and life cycle 8amily structure 'ender 6ducation *ccupation #eligion

=aste Be)a*&o+ral >ser status 7oyalty status Place of purchase ?enefits sought >sage rate.

C,A##ENGE OF R"RA# MARKETING$ % mar!eter trying to mar!et his product or service in the rural areas is faced by many challenges; the first is posed by the geographic spread and low population density in the villages in the country. The second challenge is from the low purchasing power and limited disposable incomes in these parts of the country. The third challenge is from -%@s of rural mar!et i.e., %vailability, %ffordability, %wareness and %cceptability. A*a&la%&l&ty is about ma!ing the product reach the consumers and it is the biggest challenge to be face while formulating the strategies for rural mar!ets. It has been ac!nowledged by many that distribution systems are the most critical component and a barrier which needs to be overcome for success in mar!eting in rural areas. A''orda%&l&ty is to ensure affordability of the products and services. With low disposable incomes, products need to be affordable to rural consumers, most of whom are daily wage5 earners. Acce(ta%&l&ty would include issues needed to be addressed to improve the willingness to consume, distribute or sell a product. It would also include how the product or service could be made more acceptable to the rural consumers. Awareness is the issues of promotion in rural areas. The promotional activities needs to be adapted to the village environment; the language and means of communication used should be in the local language.

MARKETING MI- FOR R"RA# MARKET In order to utili+e the immense potential in rural mar!ets companies need to develop specific mar!eting mix and action plans, ta!ing into consideration the complex set of factors that influence consumer behaviour. Innovative companies which adopted an integrated approach have succeeded in utili+ing mar!eting opportunities that rural areas offer. Different rural marketing strategies in India
2. Com(et&t&*e strategy 1.1. +((l&er$ The company not only has to ma!e high )uality products but also has to sell

them cheap. This can be achieved only if the company has good supplier who can provide good )uality material or ingredients at very low price otherwise the company has to go for bac!ward integration to achieve the economies which determine success in the rural mar!et.
1.2. +%st&t+te (rod+cts$ "ue to high level of illiteracy, low awareness and dependence on

retailers in rural area, counterfeiting is prevalent and substitutes flourish. :ery different substitutes of products and brands exist in the rural areas. 7i!e Nimbu Pani is a competitor to Coke and Pepsi in the rural. 8reely available ash is competitor for Vim Avessel cleaning productsB.
3. Prod+ct trategy 2.1. Mar!eters have never felt a strong need to exclusively design product or even to modify

the design of a product for the rural mar!et. &eeds of rural consumer is different from urban. Mar!eters have to design or modify their product according to variables of rural mar!et. 8or example<
a6 6scort was the first organi+ation to position its motor cycle Rajdoot as one that

could cope with the rugged terrain of rural India CDandaar $awari $handar $awariE which was successful in the mar!et.
b6 Bajaj M8 released by ?ajaj automobiles, was advertised showing its features and

usage particularly in rural areas, so this product was successful only in the rural mar!et.

2.2. "nderstand&ng o' *al+ed (rod+ct$ :alue consciousness is big driver for the rural

mar!et, consumers are extremely aware of e)uation of price, )uality and image. 8or example<
a6 Britania came with the concept of C6at healthy thin! better, $wast !hao tan man

jagao E it stood for healthy food for health conscious Indian consumer.
b6 !amsung Communication Corporation sells low price colour T: to attract rural

mar!et. cB Videocon launched CWasherE washing machine without dryer at #s.0111 specifically in rural mar!et and it had 411F growth in 0 years
2.3. Packag&ng$ The si+e of the pac! helps the rural consumer to pic! the product at the price

they can afford. The affordability, storability, display ability, availability along with the usage are the reasons for rural consumers to loo! for small pac!s. 8or example<
a6 $achet revolution b6 9ome delivery pac!aging c6 =olor strategyA'reenB d6 $mall pac!ageA21gm soaps along with 411gmsB 3. Emot&onal &dent&ty$ 6motional identity is a concept that differentiates a corporate in a

mar!et. The mar!eters are trying to connect to inner core of rural mind by emotional attachments li!e C"esh !i "had!anE by "ero "onda, C"efinitely maleE by Bajaj Pulsar, C"esh !i nama! !haaya huhE by #ata !alt. -. #ogos and ym%ol$ The rural mar!ets respond in different ways to different symbols than the urban consumer. 8or example<
a6 The sun symboli+es life ABirla $roupsB b6 %%% soap

cB #ortoise mos&uito coils

d6 $un flower symbol for 'ipro products e6 =onnecting People and =onnecting India by Nokia. ,. Pr&c&ng

trategy$ =ompanies should not only price their products competitively, but also

offer their rural prospects the maximum value for money spent. =ompanies must follow the strategy of penetration rising with the bac!up of good )uality products to be successful in the rural mar!et. 8or example<

a6 #s.2 price point by some mar!eters li!e Coke(s success in promoting the Paanch

strategy.
b6 Broke Bond pac! was available earlier in 2paise later 41paise,.2paise and with inflation it

became #e.4, now it is the time of #s.2 pac!.

c6 977 introduced #s.2 Ponds #alc, cold cream) Rin) *air n +ovel, and +u-.

./ Comm+n&cat&on trategy$
6.1. ?y proper communication in regional languages. %ssociation themselves with Indian

celebrities li!e 6x< aB Manipuram gold designed advertisement by the brand ambassadors li!e =ine $tars Puneeth #aja!umar in arnata!a, %!shay umar in &orth India. bB #humps /p designed ad. With %!shay $outh India. cB % rural campaign for the radio advertisement for rural Tamil &adu, they developed punch line C6nga veetu super starEAThe super star of my homeB based on Tamil superstar #ajni!anth. $ame campaign developed for %ndhra Pradesh punch line was CMaa inty Mega starEAThe mega star of my homeB based on =heeranjivi. ./0/ O+tdoor Med&a o(t&ons$ li!e wall paintings, video vans are also attractive method of communicating in rural areas. umar in &orth India and =heeranjivi in

,O1 GOO! ARE T,E E TRATEGIE IN R"RA# MARKETING$ In the view of challenges and opportunities offered by the rural mar!ets it can be said that the strategies adopted so for by the mar!eters Aexcept few such as 977, Marico, =olgate5Palmolive etc.B were not satisfactory. Mar!eters need to understand the social dynamics and attitude variations within the rural mar!ets. rural mar!ets needs to be tempered because of the complexity of these mar!ets and the scale of investment re)uired to achieve good penetration. The future is very promising for those who can understand the dynamics of rural mar!ets and exploit them to their best advantage. % radical change in attitudes of mar!eters towards the vibrant and burgeoning rural mar!ets is necessary. The companies have to ascertain rural consumers@ needs and desires in order to exploit vast potentials of rural mar!ets with suitable mar!eting strategies. 9owever, the rural mar!ets are broadly scattered and heterogeneous; there are insufficient rural transportation, inefficient communication and inade)uate warehousing facilities which have been hindering the growth of companies in the rural mar!ets. =ompanies have to formulate the strategies to cater to the rural mar!ets by ta!ing in to account the following suggestions. While mar!eting to the rural consumer, it is important that the positioning of the goods have to connect with the rural consumers@ social status appreciation. It give them psychological satisfaction and motivate them to continue with the same brand. Mar!eting through multi5level mar!eting channels, !itty parties, social gathering and etc., where people within the same rural community can be encouraged as the influence to ma!e a purchase through the opinions of friend and peer group is more in rural consumers. 6fforts should be made to increase the distribution networ! A retail outletsB and ma!e available the products to the rural mar!et. In addition, efforts should be made to sue the distribution channels more effectively to reach in the deeper poc!ets of the rural mar!et. Thus availability of the products is very important as rural consumers are not loyal to one brand. Promotional strategies should be according to the age group factor of buying decision in rural mar!et. %s the factor of influence are different in different age groups. While planning for rural mar!et company should plan considering the factor of buying decision li!e, lifestyle, buying capacity and buyers preferences etc. as they try different products as suggested by the peers, neighbour and others.

RESEARCH METHADOLOGY

#esearch is a planned en)uiry that utili+es acceptable scientific methodology to solve problems and create new !nowledge that is generally applicable and informational. $cientific methods consist of systematic observation, classification, analysis and interpretation of data on the basis of data collected. #esearch is a process of collecting, analy+ing and interpreting information to answer )uestions which are either predefined or assumed before the research is conducted. ?ut to )ualify as research, the process must have certain characteristics< it must be in a long field where multiple variable are covered, unbiased, systematic, valid and verifiable. The collected data and result should be critical and pin5pointing. #esearch can be classified from three perspectives< 4. %pplication of research study .. *bjectives in underta!ing the research 0. In)uiry mode employed A((l&cat&on< In application, there are two categories based on research i.e. pure research and applied research. In our survey, the point of view of application that we have selected is applied research. Ma&n O%2ect&*es< 8rom the point of view of objectives, a research can be classified as descriptive, correlational, observational, explanatory, and exploratory. In the survey, from the point of view of objectives we have selected observational objective. In3+&ry Mode< There are mainly two approaches to answer the researched )uestions$tructured approach G >nstructured approach. In the survey, from the point of view of in)uiry mode we have selected $tructured %pproach. am(l&ng Frame<!had5chitra, &avsari5?ardoli highway, 'ujarat. $ampling $i+e< ,0 T&me and (lace< this study has been done in the month of %pril. This survey was ta!en in the had5chitra which is -.!m far from the $urat city.

Met)ods o' st+dy 4. Primary Method<"ata observed or collected directly from first5hand experience. This method has been conducted with a )uestionnaire. .. $econdary Method<Published data and the data collected in the past or other parties are called secondary data. People can use these data through boo!s, journals etc. We have ta!en the primary method of data collection as the survey has been conducted in the village to !now the preferences and willingness of the people to spend on the mobile phones. This survey has been conducted to !now the life style of the people in the village.

"R4E5 ANA#5 I

OCC"PATION

INCOME GRO"P

COMPANIE PEOP#E ARE " ING

FACITIE NEE! IN MOBI#E P,ONE

B"5ING FRE6"ENC5 OF MOBI#E ONCE

1I##INGNE

TO PEN! ON MOBI#E P,ONE

OB ER4ATION

CONC#" ION$ #ural consumers are fundamentally different from their urban counterparts. The lower levels of literacy and limited exposure to product and services and there are also differences in occupation options, with a direct impact on income levels and income flows, and a high level of inter5dependency affecting the dynamics of rural community behavior. Thus, it re)uires a well5 crafted plan to meet these challenges in rural mar!ets. $o we can conclude that #ural mar!ets has its own set of challenges, problems and opportunities. 9ence the companies need to unlearn and then relearn the mar!eting strategies and tactics that would enable harnessing the immense rural potential. The approach, strategies and mar!eting mix need to be formulated and examined from rural consumer@s prospective to be successful in the rural mar!et.