INTRODUCTION

India lives in her villages.

As described by Adi Godrej, Chairman, Godrej Group The rural consumer is
discerning and the rural market is vibrant. At the current of growth, it will soon outstrip the
urban market. The rural market is no longer sleeping but we are.
Before gamboling into issues like where the Indian rural market stands and the opportunities for
corporates to explore there... let's look at the definition of urban and rural India. The Census
defined urban India as - "All the places that fall within the administrative limits of a municipal
corporation, municipality, cantonment board etc or have a population of at least 5,000 and have
at least 75 per cent male working population in outside the primary sector and have a population
density of at least 400 per square kilometer. Rural India, on the other hand, comprises all places
that are not urban!"
In our country over 70%of the total population live in villages. There are states like U.P,
M.P, Bihar, Rajasthan and Orissa where rural population varies from 8 to 9percent. Agriculture
and agriculture related activities contribute to about 75%of the income in rural areas. The general
impression is that the rural markets have potential only for agricultural inputs like seeds,
fertilizers and pesticides, cattle feed and agricultural machinery. More than 50%of the national
income is generated in rural India and there are opportunities to market modern goods and
services in rural areas and also market agricultural products in urban areas. Infect it has been
estimated that the rural markets are growing at five times the rate of urban markets. About 70%
of bicycles, mechanical watches and radios and about 60%of batteries, sewing machine and table
fans are sold in rural India. At the same time the sales of color television, washing machines,
refrigerators, shampoos, face cream, mosquito repellent and tooth paste are very low and there is
tremendous potential for such products in rural markets.
Now for some facts and figures 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. So clearly there
seems to be a long way ahead.

Time and again marketing practitioners have waxed eloquent about the potential of the rural
market. But when one zeroes in on the companies that focus on the rural market, a mere handful
names come to mind. Hindustan Lever Limited (HLL) is top of the mind with their successful
rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin of HLL's
strategy has been to focus on penetrating the market down the line and focusing on price point.
Furthermore, activating the brand in the rural market through activities, which are in line with
the brand itself, is what sums up HLL's agenda as far as the rural market is concerned informs
MindShare Fulcrum general manager R Gowthaman. 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.

We can safely say that until some years ago, the rural market was being given a step-motherly
treatment by many companies and advertising to rural consumers was usually a hit and miss
affair. More often than not, the agenda being to take a short-cut route by pushing urban
communication to the rural market by merely transliterating the ad copy. Hence advertising that
is rooted in urban sensitivities didn't touch the hearts and minds of the rural consumer. While,
this is definitely changing, the process is slow. 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.
Lifebuoy's wall painting in rural India
orporates are still apprehensive to "Go Rural." A few agencies that are trying to create awareness
about the rural market and its importance are Anugrah Madison, Sampark Marketing and
Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M Outreach, Linterland and RC&M,
to name a few. Also, the first four agencies mentioned above have come together to form The
2

Rural Network. The paramount objective of the Network is to get clients who are looking for a
national strategy in rural marketing and help them in executing it across different regions.
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," says Sampark
Marketing and Advertising Solutions Pvt Ltd
managing director R A Patankar.
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 "Yaara da Tashan..." McCann Erickson's
steadily to build their infrastructure to meet the ads with Aamir Khan created universal
growing needs of the rural market, which appeal for Coca Cola
reiterates the fact that this multinational has realized the potential of the rural market is going
strength to strength to tap the same.

In 2000, ITC took an initiative to develop direct contact with farmers who lived in
far-flung villages in Madhya Pradesh. ITC's E-choupal was the result of this
initiative.

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 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," says MART managing director Pradeep
Kashyap.Citing other challenges in rural marketing, Patankar says, "Campaigns have to be tailor
made for each product category and each of the regions where the campaign is to be executed.
Therefore a thorough knowledge of the nuances of language, dialects and familiarity with
prevailing customs in the regions that you want to work for is essential. The other challenge is
the reach and the available means of reaching out to these markets, hence the video van is one of
the very effective means of reaching out physically to the rural consumers."
The fact of the matter remains that when compared to the Indian urban society, which is turning
into a consumerism society; the rural consumer will always remain driven by his needs first and
will therefore be cost conscious and thrifty in his spending habits. "Decision-making is still
conscious and deliberated among the rural community. But nevertheless, the future no doubt lies
in the rural markets, since the size of the rural market is growing at a good pace. There was a
time when market predictions were made on the basis of the state of the monsoon but this trend
has changed over the years; there is a large non farming sector, which generates almost 40 per
cent of the rural wealth. Hence the growth in the rural markets will be sustained to a large extent
by this class in addition to the farmer who will always be the mainstay of the rural economy,"
affirms Patankar.

"Although the melting of the urban - rural divide will take a while, this is not for want of the
availability of the means but for want of the rural consumer's mindset to change; which has its
own logic, which is driven by tradition, custom and values that are difficult to shed," he points
out.

Fulcrum's Gowthaman says, "The biggest

impending factor or deterrent on rural monies
going up is that there is a general sense of
trying to benchmark cost per contact (CPC).
The television CPC is going to anyways be
cheaper to rural CPC and unless and until the Satellite dish antennas reach rural India
volume - value equation turns the other way round, you will not be able to spend
disproportionate monies in the rural market."
For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in
giving the consumers a trial opportunity. While it does help in generate volume but not in terms
of values. "Till the time that volume - value equation is managed better, the CPC is preventing
anybody to look at rural at a large scale activation programme," reiterates Gowthaman.
Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches the
market, takes up the challenge of selling products and concepts through innovative media design
and more importantly interactivity.

Anugrah Madison's chairman and managing director RV Rajan sums up, "There is better scope
for language writers who understands the rural and regional pulse better. I also see great scope
for regional specialists in the areas of rural marketing - specialists like Event Managers, Wall
painters, folk artists, audio visual production houses. In fact all those people who have
specialized knowledge of a region are bound to do well, thanks to the demands of the rural
marketers."
So the fact remains that the rural market in India has great potential, which is just waiting to be
tapped. Progress has been made in this area by some, but there seems to be a long way for
marketers to go in order to derive and reap maximum benefits. Moreover, rural India is not so
poor as it used to be a decade or so back. Things are sure a changing!
5

OBJECTIVES OF THE STUDY

Any task without sound objectives is like Tree without roots. Similarly in case of any research
study undertaken, initially the objectives of the same are determined and accordingly the further
steps are taken on. A research study may have many objectives but all these objectives revolve
around one major objective which is the focus of the study. In this study, the focus is on the
emergence of rural markets as the most happening market on which every marketer has an eye.
And so this study will be based on studying the emergence of rural market in various contexts.
The main objective of the study is to analyse and present the marketing of consumer
products in rural areas. The following objectives have been set forth. They are to:
1 Present a rural marketing perspective.
2 Present a profile of Indian Rural market.
3 Study and analyse the consumer behavior in rural areas.
4 Examine the product and brand penetration in rural markets.
5 Analyze marketing of consumer product in rural markets.
6 Present marketing strategy frame for marketing consumer products in rural areas.

SCOPE OF THE STUDY:

The study is restricted to selected districts of UTTAR PRADESH. Further, product and
brand penetration is examined. As regards marketing of consumer products in rural areas, the
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study analyzes products from non durable category (a bathing soap, detergents, tea, coffee,
shampoo) and from durable category (a wrist watch, television, refrigerator, fan and bicycle).

Data collection
Sample unit:
1. Working people (including men &women), basically farmers.
2. College students
3. School students
4. Senior citizen

Sample size:
1. Working people : 32%
2. College students: 29%
3. School students : 23%
4. Senior citizens : 16%

Sampling region:
1
2

I have selected Uttar Pradesh, of Uttar Pradesh as the area of study.

I have chosen BHOWAPUR, MORTI, SHAHPUR and ATTOR as areas of research.
The population status of these areas can be shown in a
tabulated manner,
which is given as follows:

Area Population
BHOWAPUR
MORTI
SHAHPUR
ATTOR

2500
3000
5000
4000

Data collection method:

1. Primary data: it will be collected with the help of a self administered questionnaire. This
questionnaire aims to gather information related to various Branded products.

Questionnaire design:
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As the questionnaire is self administrated one, the survey is kept simple and user friendly. Words
Used in questionnaire are readily understandable to all respondent. Also technical jargons are
avoided to ensure that there is no confusion for respondents.

2. Secondary data: it will be collected with the help of books, research papers, magazines,
news papers, journals, Internet, etc.

REVIEW OF LITERATURE
Rural market is one of the best opportunities for the FMCG sector. In some sense we can say that
rural market is future of FMCG.
1. Basu Purba (2004), suggested that the lifestyle of rural consumers is changing. Rural Indian
market and the marketing strategy have become the latest marketing buzzword for most of the
FMCG majors. She added the strategies of different FMCG companies for capturing rural market
like Titans Sonata watches, Coco Colas 200mlbottle, different strategies of HUL and Marico
etc. She takes into consideration the study of National Council for Applied Economic Research
(NCAER).According to the NCAER
projections, the number of middle and high-income households in rural area is expected to grow
from 140 million to 190 million by 2007.In urban India, the same is expected to grow from 65
million to 79 million. Thus, the absolute size of rural India is expected to be double that of urban
India.
8

2. Tognatta Pradeep (2003), suggested that, the economic growth in India's agricultural sector
in last year was over 10%, compared with 8.5%in the industrial sector. This implies a huge
market potentiality for the marketer to meet up increasing demand. Factors such as village
psyche,
strong distribution network and market awareness are few prerequisites for making a dent in the
rural markets. The model is of the stolid Anglo-Dutch conglomerate Unilever Group, which has
enjoyed a century-long presence in India through its subsidiary Hindustan Lever Ltd. It was
Hindustan Lever that several years ago popularized the idea of selling its products in tiny
packages. Its sachets of detergent and shampoo are in great demand in Indian villages. Britannia
with its low priced Tiger brand biscuits has become some of the success story in rural marketing.

3. Dr. N. Rajendhiran(MBA, PhD)/ Mr. S. Saiganesh(MBA, MA, M.Phil)/ Ms. P. Asha(MBA)

Prime Minister Dr. Manmohan Singh recently talked about his vision for rural India: "My vision of
rural India is of a modern agrarian, industrial and services economy co-existing side by side, where
people can live in well-equipped villages and commute easily to work, be it on the farm or in the
non-farm economy. There is much that modern science and technology can do to realise this vision.
Rural incomes have to be increased. Rural infrastructure has to be improved. Rural health and
education needs have to be met. Employment opportunities have to be created in rural areas."
'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in
villages. The Rural population is nearly three times the urban, so that Rural consumers have
become the prime target market for consumer durable and non-durable products, food,
construction, electrical, electronics, automobiles, banks, insurance companies and other sectors
besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides and farm
machinery. The Indian rural market today accounts for only about Rs 8 billion of the total ad pie of
Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way
ahead. Although a lot is spoken about the immense potential of the unexplored rural market,
advertisers and companies find it easier to vie for a share of the already divided urban pie.

RESEARCH METHODOLOGY
Research methodology is simple framework or plan for the study that is as guide in collection
and analyzing the data. It is the blue print that is followed in completes the study. Thus, good
research methodology ensures the completion of project efficiency and affectivity. Since there
are many aspect of research methodology, the line of action has to be chosen from the variety of
alternatives, to choose the suitable method through the assessment from various alternatives.

10

Research methodology gives the researcher an opportunity to put forward his

argument for having opted for certain alternatives and also at the same time he can justify his
ruling out some other possibility likes. Why research study has been undertaken, how the
research problem has been formulated what data has been collected, what particular technique if
analyzing the data has been used and lot of similar type question are usually answered when we
talk of research problem in study.
Keeping in view the above stated objectives the following methodology was adopted:

The Marketing Research Process

Define the problem and Research Objectives: The first and main step of any research is to define the relevant problems or objective for
which the researcher wants to do research.

Develop the research plan: .To makes the plan for overall research as how, when, where and from whom researcher
will collect the data

Collect the information: The information can be collected by primary data or secondary data, or by the
combination of both methods.

METHODS OF DATA COLLECTION:-

PRIMARY DATA
Market Survey

11

Personal Interview

SECONDARY DATA
Internet
Business Journal

Analyze the information: After collecting the data the next step is to analyze the information.

Present the findings: To make a summary on the basis of analyzing the collect data and find out the situation

Make the decision: The last step is to take a decision on the basis of finding that what action should be regarding the
findings

INDIA INFRASTRUCTURE
12

The best barometer of countrys economic standing is measured by its GDP. India, the second
most populated country of more than 1100 million has emerged as one of the fastest growing
economies. It is a republic with a federal structure and well-developed independent judiciary
with political consensus in reforms and stable democratic environment .In 2008-09 Indias
economy-GDP grew by 6.5% due to global recession. In the previous four years, economy grew
at 9%.The Indian economy is expected sustain a growth rate of 8% for the next three years up to
2012. With the expected average annual compounded growth rate of 8.5%, India's GDP is
expected to be USD 1.4 trillion by 2017 and USD 2.8 trillion by 2027.
Investment Opportunities In Indian Infrastructure

The robust current growth in GDP has exposed the grave inadequacies in the countrys
infrastructure sectors. The strong population growth in India and its booming economy are
generating enormous pressures to modernize and expand Indias infrastructure. The creation of
world class infrastructure would require large investments in addressing the deficit in quality and
quantity. More than USD 475 bn worth of investment is to flow into Indias infrastructure by
2012. No country in the world other than India needs and can absorb so many funds for the

13

infrastructure sector. With the above investments Indias infrastructure would be equal to the best
in the world by 2017.
In the next five years planned infrastructure investment in India in some key sectors are (at
current prices): Modernization of highways -US$ 75 billion, Development of civil aviation US$
12 billion, Development of Irrigation system- US$ 18 billion, Development of Ports-US$ 26
billion, Development of Railways- US$ 71 billion, Development of Telecom- US$ 32 billion,
Development of Power -US$ 232 billion. Thus in the eleventh five year plan ,investment in the
above sectors (Aviation infrastructure ,Construction infrastructure, Highway infrastructure
,Power infrastructure, Port infrastructure ,Telecom infrastructure ) will be US$ 384 billions(Rs
17,20,000 Crores) considering the huge infrastructure market potential in India. In addition to the
above, investments to the tune of US$ 91 billions have been planned in other infrastructure
sectors like Tourism infrastructure ,Urban infrastructure ,Rural infrastructure, SEZs ,and water
infrastructure and sanitation infrastructure thus making the total infrastructure investments in the
eleventh plan period 2007-08 to 2011-12 as US$475 billions. Domestic and global infrastructure
funds have exposure to Indian infrastructure sectors.

Rural Marketing
Rural marketing involves the process of developing, pricing, promoting, distributing rural
specific product and a service leading to exchange between rural and urban market which
satisfies consumer demand and also achieves organizational objectives.
URBAN

RURAL

RURAL

URBAN

RURAL

RURAL
14

It is a two-way marketing process wherein the transactions can be:

1. Urban to Rural: A major part of rural marketing falls into this category. It involves
the selling of products and services by urban marketers in rural areas. These include:
Pesticides, FMCG Products, Consumer durables, etc.
2. Rural to Urban: Transactions in this category basically fall under agricultural
marketing where a rural producer seeks to sell his produce in an urban market. An agent
or a middleman plays a crucial role in the marketing process. The following are some of
the important items sold from the rural to urban areas: seeds, fruits and vegetables, milk
and related products, forest produce, spices, etc.
3. Rural to Rural: This includes the activities that take place between two villages in
close proximity to each other. The transactions relate to the areas of expertise the
particular village has. These include selling of agricultural tools, cattle, carts and others to
another village in its proximity.
Rural marketing requires the understanding of the complexities. Indian agricultural industry has
been growing at a tremendous pace in the last few decades. The rural areas are consuming a large
number of industrial and urban manufactured products. The rural agricultural production and
consumption process plays a predominant role in developing the Indian economy. This has
designed a new way for understanding a new process called Rural Marketing.

INDIAN RURAL MARKET:

Rural marketing in India is not much developed there are many hindrances in the area of market,
product design and positioning, pricing, distribution and promotion. Companies need to
understand rural marketing in a broader manner not only to survive and grow in their business,
but also a means to the development of the rural economy. One has to have a strategic view of
the rural markets so as to know and understand the markets well. In the context of rural
marketing one has to understand the manipulation of marketing mix has to be properly
understood in terms of product usage. Product usage is central to price, distribution, promotion,
branding, company image and more important farmer economics, thus any strategy in rural
15

marketing should be given due attention and importance by understanding the product usage, all
elements of marketing mix can be better organised and managed.

Evolution of Rural Marketing

PHAS
E

ORIGIN

FUNCTION

Before

Mid-

1960

(from Agricultural

independence
to
II

MAJOR

SOURCE

DESTINATION

PRODUCTS

MARKET

MARKET

Agricultural

Rural

Urban

Urban

Rural

Marketing

Produce

Marketing Of

Agricultural

green

revolution)
MidSixties
(Green
revolution

to Agricultural

Pre-

Inputs

Inputs

liberalization
III

IV

period)
Mid- Nineties

Consumables

(Post-

Rural

And

Urban & Rural

liberalization

Marketing

Durables For

Rural

period on 20th

Consumption

century)

& Production

21st century

Developmental All products & Urban & Urban

marketing

services

Rural

&

Rural

1. Phase I ( from Independence to Green Revolution):

Before the advent of the Green revolution, the nature of rural market was altogether
different. Rural marketing then referred to the marketing of rural products in rural &
urban products.

2. Phase II (Green Revolution to Pre-liberalization period):

16

During these times, due to the advent & spread of the Green Revolution, rural marketing
represented marketing of agriculture inputs in rural markets & marketing of rural produce
in urban areas.

3. Phase III (Post-liberalization period on 20th century):

The third phase of rural marketing started after the liberalization of the Indian economy.
In this period, rural marketing represented the emerging, distinct activity of attracting &
serving rural markets to fulfill the need & wants of rural households, peoples & their
occupations.

4. Phase IV (21st century):

Learning from its rural marketing experiences after the independence, the corporate
world has finally realized the quick-fix solutions & piecemeal approaches will deliver
only limited results in the rural markets. And, if an organization wants to tap the real
potential of the rural market, it needs to make a long-term commitment with this market.
Its approach & strategies must not focus in just selling products & services, but they
should also aim at creating an environment for this to happen.
The objective of rural marketing in the current phase is the improvement of the quality of life by
satisfying the needs & wants of the customers, not through atand-alone products or services, but
by presenting comprehensive & integrated solutions which might involve a set of inter-related
products & services.
Till recently, the focus of marketers in India was the urban consumer and by large number
specific efforts were made to reach the rural markets. But now it is felt that with the tempo of
development accelerating in rural India, coupled with increase in purchasing power, because of
scientific agriculture, the changing life style and consumption pattern of villagers with increase
in education, social mobility, improved means of transportations and communication and other
penetrations of mass media such as television and its various satellite channels have exposed
rural India to the outside world and hence their outlook to life has also changed. Because of all
these factors, rural India is now attracting more and more marketers.
Increase in competition, saturated urban markets, more and move new products demanding urban
customers, made the companies to think about new potential markets. Thus, Indian rural markets
have caught the attention of many companies, advertisers and multinational companies.
17

According to a recent survey conducted by the National Council for Applied Economic Research
(NCAER), the purchasing power of the rural people has increased due to increase in productivity
and better price commanded by the agricultural products. By and large this rise in purchasing
power remains unexploited and with the growing reach of the television, it is now quite easy for
the marketers to capture these markets.

RURAL INFRASTRUCTURE:
1) 46 percent of villages are connected by all-weather roads.
2) 84 percent of villages are electrified.
3) 5700 regulated markets.
In the early 2000s, around 700 million people, i.e. 70% of the Indian population lived in 6,
27,000 villages, in rural areas. Of this, 90% were concentrated in villages with population less
than 2000.3 According to a study conducted in 2001 by the National Council for Applied
Economic Research (NCAER), there were as many "middle income and above" households in
rural areas as there were in urban areas.
There were almost twice as many "lower income households" in rural areas as in urban areas.
There were 2.3 million "highest income" households in urban areas as against 1.6 million in rural
areas. NCAER projections indicated that the number of "middle income and above" households
was expected to grow to 111 million in rural India by 2007, compared to 59 million in urban
India. Gone were the days when a rural consumer had to go to a nearby town or city to buy a
branded product. The growing power of the rural consumer was forcing big companies to flock
to rural markets. At the same time, they also threw up major challenges for marketers.

18

FMCG
There was a time when the FMCG companies ignores rural market, they took no any interest to
produced or sell products in rural market in India. It was the initial stage of FMCG companies in
India. As per as the time had
Passed, the strategy and marketing style of FMCG companies had been changed.
The rural market is the one of the best opportunity for the FMCG sector in the India. It is wider
and less competitive market for the FMCG.As the income level of the rural consumers
increasing, the demand of FMCG is
Increasing continuously.

Top Players in FMCG Sector

1. Hindustan lever limited (HLL)
2. ITC (Indian Tobacco Company)
3. Nestle India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter&Gamble Hygiene &Health Care
10. Marico Industries

Secondary Players
1. Colgate-Palmolive (India) Ltd.
2. Godrej Consumers Product Ltd.
19

3. Nirma Ltd.
4. Tata Tea Ltd.
5. Parle Agro
Rural consumers spend around 13 per cent of their income, the second highest after food (35 per
cent), on fast moving consumer goods (FMCG), as per a RMAI study.
The FMCG industry in India was worth around US$ 16.03 billion in August 2008 and the rural
market accounted for a robust 57 per cent share of the total FMCG market in India.
The FMCG sector saw rural markets post 20 per cent growth, ahead of the 17-18 per cent growth
from urban India, aided by three years of good monsoon, higher prices of farm produce and
farm-loan waiver.
Most FMCG companies are now working on increasing their distribution in smaller towns and
focussing on marketing and operations programme for semi-urban and rural markets.
For instance, Godrej Consumer Products intends to increase revenue from rural areas from 38
per cent to 55 per cent in the next three years by increasing its distribution network substantially.
The products will reach out to 50,000 villages in the next couple of years from the present
18,000 villages while the number of towns covered will double from 3,300 to almost 6,500 in a
year.

Retail
The rural retail market is currently estimated at US$ 112 billion, or around 40 per cent of the
US$ 280 billion retail market. Major domestic retailers like AV Birla, ITC, Godrej, Reliance and
many others have already set up farm linkages. Hariyali Kisan Bazaars (DCM) and Aadhars
(Pantaloons-Godrej JV), Choupal Sagars (ITC), Kisan Sansars (Tata), Reliance Fresh, Project
Shakti (Hindustan Unilever) and Naya Yug Bazaar are established rural retail hubs.

20

Pharmaceuticals
According to a report by McKinsey, the rural and tier-II pharma market will account for almost
half of the growth till 2015. The tier-II market will grow to 44 per cent by 2015, amounting to
US$ 8.8 billion.
This growth will be further augmented with the government increasing the allocation under
National Rural Health Mission (NRHM) by US$ 424.3 million over interim budget estimate
2009-10 of US$ 2.49 billion.
Elder Pharmaceuticals is increasing its focus on the rural market. The company that largely
makes active pharmaceutical ingredients, plans to increase its sales by 8-9 per cent mainly from
rural areas and has allocated US$ 8.26 million to strengthen the sales force for this segment.

Telecommunication
A Gartner forecast revealed that Indian cellular services revenue will grow at a compound annual
growth rate (CAGR) of 18.4 per cent to touch US$ 25.6 billion by 2011, with most of the growth
coming from rural markets. Also, a joint Confederation of Indian Industries (CII) and Ernst &
Young report reveals that of the next 250 million Indian wireless users, approximately 100
million (40 per cent) are likely to be from rural areas, and by 2012, rural users will account for
over 60 per cent of the total telecom subscriber base in India.

21

In a bid to acquire rural subscribers, most Indian telecom operators have started investing in
infrastructure to roll out their services in these areas. Realizing this as a huge potential, small
Indian handset manufacturing companies, including Micromax, Intex Technologies and Karbonn,
have lined up a marketing spent of around US$ 21.02 million for the financial year 2009-10.

Automobiles
For the auto industry, semi-urban and rural markets contribute close to 40 per cent of sales, led
by demand for two-wheelers, entry-level cars and tractors. Significantly, car sales grew 8.3 per
cent in June 2009, aided by rising demand in semi-urban and rural markets. Mahindra &
Mahindra is bullish on the rural and semi-urban markets, with its utility vehicle, Scorpio
clocking 60-65 per cent sales from the rural markets as against 20 per cent earlier. TVS Motor
also registered around 50 per cent of its sales from the rural and semi-urban markets.

Consumer durables
A survey carried out by RMAI has revealed that 59 per cent of durables sales come from rural
markets.

22

Presently, around 50 per cent of sales in the US$ 5.14 billion consumer electronics industry come
from the urban markets, 30 per cent from tier-II and -III towns and balance 20 per cent from rural
India.
Many leading consumer durable companies are now increasing their presence in rural India.
Recently, LG has set up 45 area offices and 59 rural and remote-area offices. Moreover, it has
outlined plans to invest around US$ 40 million towards development of entry-level products
targeted at rural markets.
Samsung has also rolled out its 'Dream Home' road show which was to visit 48 small towns in
100 days in an effort to increase brand awareness of its products. Samsung expects that its rural
revenues would increase to US$ 287.7 million in 2009 from US$ 164.4 million last year. The
company also plans to expand its sales channel by 25-30 per cent in rural India.
Whirlpool, is eyeing rural markets in India for its next phase of growth. The company is set to
tap markets with a population between 100,000 and 500,000 in the first phase, and in the next
phase, will look at expanding the base in villages with a population of 50,000.

23

Model: The model of rural marketing represents a combination of the transactional and
developmental approaches.

Rural marketing process is both a catalyst as well as an outcome of the general rural
development process. Initiation and management of social and economic change in the
rural sector is the core of the rural marketing process. It becomes in this process both
benefactor and beneficiary.

Innovation is the essence of marketing. Innovative methods of social change for

successful transformation of traditional society are virtual. Such a change narrows the
rural-urban divide.

The process of transformation can be only evolutionary and not revolutionary. The
growth of the rural market can be a planned evolutionary process based on strategic
instruments of change rather than constitute just short-term opportunities for commercial
gains.

The exposure of ruralites to a variety of marketing transactions during the change process
puts them in the role of beneficiaries than of just `buyers' of modern inputs and
infrastructural services.

Communication is the vital element of rural marketing. It should serve to resolve social
conflicts, encourage cooperation and strengthen competitive spirit during interactions
between rural and urban as well as within rural
areas. Another critical point for communication is the point of conversion of ruralite from
an "induced beneficiary" to an "autonomous buyer".

Classification of rural consumers

The rural consumers are classified into the following groups based on their economic status:

The Affluent Group: They are cash rich farmers and a very few in number. They have
affordability but not form a demand base large enough for marketing firms to depend on.
Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this group.

The Middle Class: This is one of the largest segments for manufacturedgoods and is fast
expanding. Farmers cultivating sugar cane in UP andKarnataka fall in this category.

24

The Poor: This constitutes a huge segment. Purchasing power is less,but strength is
more. They receive the grants from government and reapthe benefits of many such
schemes and may move towards the middleclass. The farmers of Bihar and Orissa fall
under this category.

Roadblocks of Indian Rural Market

There are several roadblocks that make it difficult to progress in the rural market. Marketers
encounter a number of problems like dealing with physical distribution, logistics, proper and
effective deployment of sales force and effective marketing communication when they enter
rural markets. The major problems are listed below.
1. Standard of living: The number of people below the poverty line is more in rural
markets. Thus the market is also underdeveloped and marketing strategies have to be
different from those used in urban marketing.
2. Low literacy levels: The low literacy levels in rural areas leads to a problem of
communication. Print media has less utility compared to the other media of
communication.

3. Low per capita income: Agriculture is the main source of income and hence
spending capacity depends upon the agriculture produce. Demand may not be stable or
regular.
4. Transportation and warehousing: Transportation is one of the biggest challenges
in rural markets. As far as road transportation is concerned, about 50% of Indian villages
are connected by roads. However, the rest of the rural markets do not even have a proper
road linkage which makes physical distribution a tough task. Many villages are located in
hilly terrains that make it difficult to connect them through roads. Most marketers use
Tractors or bullock carts in rural areas to distribute their products. Warehousing is another
major problem in rural areas, as there is hardly any organized agency to look after the
storage issue. The services rendered by central warehousing corporation and state
warehousing corporations are limited only to urban and suburban areas.

25

5. Ineffective distribution channels: The distribution chain is not very well

organized and requires a large number of intermediaries, which in turn increases the cost
and creates administrative problems. Due to lack of proper infrastructure, manufacturers
are reluctant to open outlets in these areas. They are mainly dependent on dealers, who
are not easily available for rural areas. This is a challenge to the marketers.

6.Lack of communication system: Quick communication is the need of the hour for
smooth conduct of business, but it continues to be a far cry in rural areas due to lack of
communication facilities like telegraph and telecommunication systems etc. The literacy rate
in the rural areas is rather low and consumers behaviour in these areas is traditional, which
may be a problem for effective communication.

Attractiveness of rural market

1.

Large Population: The rural population is large and its growth rate is also high.
Despite the rural urban migration, the rural areas continue to be the place of living majority
of Indians.

2. Rising Rural Propensity:

26

INCOME GROUP
ABOVE RS. 100,000
RS. 77,001-100,000
RS. 50,001-77,000
RS. 25,001-50,000
RS.25,000 & BELOW

2000-01
1.6
2.7
8.3
26.0
61.4

2005-06
3.8
4.7
13.0
41.1
37.4

2008-09
5.6
5.8
22.4
44.6
20.2

Thus we see that population between income level of Rs. 25,000- 77,000 will increase
from 34.3% in 1994-95 to 67.0% in 2006-07. The rural consuming class is increasing by
about 3-4% per annum, which roughly translates into 1.2 million new consumers yearly.
\

3. Growth in consumption:

PERCAPITA HOUSEHOLD EXPENDITURE (IN RS.)

LEVEL

NO

STATES

EXPENDITUR

High
(Above Rs 382/-)

Average
(Rs. 382/-)

Low
(Below
382/-)

Rs. 3

Punjab
Kerala
Haryana
Rajasthan
Gujarat
Andhra Pradesh
Maharashtra
West Bengal
Orissa
Tamil Naidu
Uttar Pradesh
Karnataka
Assam
Madhya

614
604
546
452
416
386
384
382
381
381
373
365
338
326

Pradesh
Bihar

289

Distribution households income wise (projection in Rs Crore)

2001 02

2006 07
27

INCOME
GROUPS
HIGH

MIDDLE

RURAL
TOTAL NO.
0.26
0.07

%
26.

12.04

7.73

9
64.

LOW

5.7

5.09

2
88.

TOTAL

18.04

12.8

7
71.

RURAL
TOTAL NO.
0.52
0.12

%
23.

16.72

10.3

1
61.

3.68

2
3.52

8
95.7

20.90

13.9

66.

Spending pattern (Rural Households in Rs.)

ITEM

% RIC

FOOD ARTICLES

TOILETRIES

4
2

WASHING

0
1

MATERIAL
COSMETICS

3
1
0
4
9

OTC PRODUCTS
OTHERS
TOTAL

POO

AVERAG

147

73

95

67

33

43

43

22

28

33

17

21

13
30
333

6
15
166

9
19
215

Average rural household spends on consumables excluding food grains, milk &
vegetables are Rs. 215/-.

4. Life style changes:

Income vs. usage of packed consumer goods (% of household using)
GOODS

MONTHLY HOUSEHOLD INCOME (RS.)

UP
TO 351
751
1501
350

750

1500

+
28

WASHING CAKES/BARS 60
SHAMPOOS
57
TOOTH
22

78
72
36

86
89
65

91
93
85

25
30

41
48

63
64

PASTE/POWDER
BATHING SOAPS
TEA (PACKAGED)

20
22

5. Life cycle advantage:

STAGES IN LIFE CYCLE
PRODUCT

URBAN

MARKET

RURAL

GROWTH
Popular soaps
Premium soaps

Maturity
Late

growth
Washing powder Late
Skin creams
Tea

growth
Maturity
Maturity

RATE %
2
11

Growth
Early

growth
Early

1.1
4

growth
Growth
Growth

6. Market growth rates higher: Growth rates of the FMCG market and the

durable

market are higher in rural areas for many products. The rural market share will be more
than 50% for the products like toilet soaps, body talcum powder, cooking medium (oil),
cooking medium (vanaspati), tea, cigarettes and hair oil.
7. Rural marketing is not expensive: Conventional wisdom dictates that since rural
consumers are dispersed, reaching them is costly. However, new research indicates that the
29

selling in Rural India is not expensive. According to one research it costs roughly Rs.1 Crore
to promote a consumer durable inside a state. This includes the expenses of advertising in
vernacular newspapers, television spots, in-cinema advertising, radio, van operations and
merchandising and point of purchase promotion. Campaign like this, which can reach
millions, costs twice as much in urban area.
8. Remoteness is no longer a problem: Remoteness in a problem but not
insurmountable. The rural distribution is not much developed for the reasons,
Lack of proper infrastructure such as all-weather roads, electrification and sanitation,
and
Lack of marketers imagination and initiative.

Rural Vs Urban Marketing

NO

ASPECT

.
1

URBAN

RURAL

Marketing & Societal Marketing & Societal

Concepts
PHILOSOPHY

& Concepts,

Relationship

Development

Marketing

Marketing

&

Relationship
Marketing
2

A)
B)
C)

MARKET
DEMAND
COMPETITION
CONSUMERS
LOCATION
LITERACY
INCOME
EXPENDITURE
NEEDS
INNOVATION/ADOPTION

High
Among

Units

Low
In Mostly

From

Organized Sector

Unorganized Units

Concentrated
High
High
Planned, Even
High Level
Faster

Widely Spread
Low
Low
Seasonal, Variation
Low Level
Slow

PRODUCT
30

AWARENESS
CONCEPT
POSITIONING
USAGE METHOD
QUALITY PREFERENCE

High
Known
Easy
Easily Grasped
Good

Low
Less Known
Difficult
Difficult To Grasp
Moderate

SENSITIVE

Yes
Medium-high

Very much
Medium-low

PRICE
LEVEL DESIRED

CONSUMER BEHAVIOR IN RURAL MARKETS

Promotion of brands in rural markets requires the special measures. Due to the social and
backward condition the personal selling efforts have a challenging role to play in this regard. The
word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the
most influencing part of promotion strategy of rural promotion efforts. The experience of
agricultural input industry can act as a guideline for the marketing efforts of consumer durable
and non-durable companies. Relevance of Mass Media is also a very important factor.
The Indian established Industries have the advantages, which MNC don't enjoy in this regard.
The strong Indian brands have strong brand equity, consumer demand-pull and efficient and
dedicated dealer network which have been created over a period of time. The rural market has a
grip of strong country shops, which affect the sale of various products in rural market. The
companies are trying to trigger growth in rural areas. They are identifying the fact that rural
people are now in the better position with disposable income. The low rate finance availability
has also increased the affordability of purchasing the costly products by the rural people.
Marketer should understand the price sensitivity of a consumer in a rural area. This paper is
therefore an attempt to promote the brand image in the rural market.
Indian Marketers on rural marketing have two understanding (I) the urban metro products and
marketing products can be implemented in rural markets with some or no change. (ii) The
rural marketing required the separate skills and techniques from its urban counterpart. The
Marketers have following facilities to make them believe in accepting the truth that rural markets
aredifferent in so many terms.

.
31

(i)The rural market has the opportunity for.

(ii) Low priced products can be more successful in rural markets because the low purchasing,
purchasing powers in rural markets.
(iii) Rural consumers have mostly homogeneous group with similar needs, economic condition
(iv) The rural markets can be worked with the different media environment as opposed to press,
film, radio and other urban centric media exposure.
.

RURAL CONSUMER PREFERENCES:

In order to assess the buyer behavior towards certain critical aspects of marketing, the
preferences of the consumers is directly related to:
1) Price
2) Quality
3) Credit
4) Variety
5) Dealer advice
6) Specific brand.

PURCHASE BEHAVIOR:
Rural people can buy only from three places includes:
1) From the shop in the same village
2) Weekly bazaar
3) From the shop of nearby town.

Factors influencing buying behavior

The various factors that affect buying behavior of in rural India are:
1. Environmental of the consumer- The environment or the surroundings, within
which the consumer lives, has a very strong influence on the buyer behavior, egs.
Electrification, water supply affects demand for durables.
32

2. Geographic influences - The geographic location in which the rural consumer is

located also speaks about the thought process of the
Consumer. For instance, villages in South India accept technology quicker than in
other parts of India. Thus, HMT sells more winding watches in the north while they
sell more quartz watches down south.
3. Family it is an important buying decision making organization in consumer
markets. Family size & the roles played by family members exercise considerable
influence on the purchase decisions. Industry observers are increasingly realizing that
at times, purchase of durable has less to do with income, but has more to do with the
size of the family & thats where rural India with joint family structures, becomes an
attractive proposition.
4. Economic factors The quantum of income & the earning stream are one of the
major deciding factors, which determine to a great extent, what the customer will be
able to buy. Many people in the rural market are below poverty line & for large
number of people, agriculture is the primary occupation. More than 70% of the
people are in small-scale agricultural operation. These factors affect the purchase
decision.

Cultural factors influencing consumer behavior

Cultural factors exert the broadest and deepest influence on consumer behavior. The marketer
needs to understand the role played by the buyers culture. Culture is the most basic element that
shapes a persons wants and behavior.In India, there are so many different cultures, which only
goes on to make the marketers job tougher. Some of the few cultural factors that influence buyer
behavior are:
1. Product (colour, size, design, and shape): There are many examples that support this
point.
a. For example, the Tata Sumo, which was launched in rural India in a white colour,
was not well accepted. But however, when the same Sumo was re-launched as
Spacio (a different name) and in a bright yellow colour, with a larger seating
capacity and ability to transport good, the acceptance was higher.

33

b. Another good example would be Philips audio systems. Urban India looks at
technology with the viewpoint of the smaller the better. However, in rural India,
the viewpoint is totally opposite. That is the main reason for the large acceptance
of big audio systems. Thus Philips makes audio systems, which are big in size and
get accepted in rural India by their sheer size.
2. Social practices: There are so many different cultures, and each culture exhibits different
social practices.
For example, in a few villages they have common bath areas. Villagers used to
buy one Lifebuoy cake and cut it into smaller bars. This helped lifebuoy to
introduce smaller 75-gram soap bars, which could be used individually.
3. Decision-making by male head: The male in Indian culture has always been given the
designation of key decision maker.
For example, the Mukhiyas opinion (Head of the village), in most cases, is shared
with the rest of the village. Even in a house the male head is the final decision
maker. In rural areas, this trend is very prominent.
4 Changes in saving and investment patterns: From gold, land, to tractors, VCRs, LCVs

4 As approach of Indian Rural Market

The rural market may be appealing but it is not without its problems: Low per capita disposable
incomes that is half the urban disposable income; large number of daily wage earners, acute
dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and
festivals and special occasions; poor roads; power problems; and inaccessibility to conventional
advertising media.
However, the rural consumer is not unlike his urban counterpart in many ways.
The more daring MNCs are meeting the consequent challenges of availability, affordability,
acceptability and awareness (the so-called 4 As)

34

 Availability
The first challenge is to ensure availability of the product or service. India's 627,000 villages are
spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not
easy. However, given the poor state of roads, it is an even greater challenge to regularly reach
products to the far-flung villages. Any serious marketer must strive to reach at least 13,113
villages with a population of more than 5,000. Marketers must trade off the distribution cost with
incremental market saturation. Over the years, India's largest MNC, Hindustan Lever, a
subsidiary of Unilever, has built a strong distribution system which helps its brands reach the
interiors of the rural market.

Affordability
The second challenge is to ensure affordability of the product or service. With low disposable
incomes, products need to be affordable to the rural consumer, most of who are on daily wages.
Some companies have addressed the affordability problem by introducing small unit packs. Most
of the shampoos are available in smaller packs. Fair and lovely was launched in a smaller pack.
Colgate toothpaste launched its smaller packs to cater to the travelling segment and the rural
consumers.Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm
packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh the
so-called `Bimaru' States.
Hindustan Lever, among the first MNCs to realize the potential of India's rural market, has
launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is
mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by
introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty
per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced
Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a
single-serve sachet of 25 gm priced at Rs 2 and multi serve sachet of 200 gm priced at Rs 15.
35

 Acceptability
The third challenge is to gain acceptability for the product or service. Therefore, there is a need
to offer products that suit the rural market. One company which has reaped rich dividends by
doing so is LG Electronics. In 1998, it developed a customized TV for the rural market and
christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because
of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice
boxes a tin box for new outlets and thermocol box for seasonal outlets.

Awareness
Brand awareness is another challenge. Fortunately, however, the rural consumer has the same
likes as the urban consumer movies and music and for both the urban and rural consumer,
the family is the key unit of identity. However, the rural consumer expressions differ from his
urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing
is confined to the state-owned Doordarshan. Consumption of branded products is treated as a
special treat or indulgence.
Hindustan Lever relies heavily on its own company-organized media. These are promotional
events organized by stockiest. Godrej Consumer Products, which is trying to push its soap brands
into the interior areas, uses radio to reach the local people in their language.
Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural
households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per
cent of rural households. It has also used banners, posters and tapped all the local forms of
entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its
`magical' price point of Rs 5 per bottle in all media. LG Electronics uses vans and road shows to
reach rural customers. The company uses local language advertising. Philips India uses wall
writing and radio advertising to drive its growth in rural areas.

36

The key dilemma for MNCs ready to tap the large and fast-growing rural market is whether they
can do so without hurting the company's profit margins.

retailer

CUSTOMIZATIO
NN

packaging
Product, price,
place and
promotion

EDUCATIO
N

EMPOWEREMEN
T

The traditional marketing hypothesis tends to ignore the requirement of a developingcountrys

rural needs. The concept of marketing has to be taken in conjunction witheconomic,
psychological and social implications. Hence, the concept of Mega-Marketingwhere all such
factors are taken into consideration while developing the Marketing Mix ismore relevant to
succeed and build enduring brands. In rural Indias case the two mostimportant considerations
are Education and Empowerment opportunities which traditional approaches of marketing fail to
acknowledge. Then only the opportunity provided by the rural market can be fully tapped.
12.2% of the world lives in Rural India. Put in a different context, this works out to 1 in 8 people
on Earth. Being able to successfully tap this growing market is every marketers dream.
However, myths abound. Indias rural markets are often misunderstood. A clear distinction needs
to be made with regard to the reality versus the image of rural India. If such a distinction is not
made, we will be unable to distinguish between the serpent and the rope and the rope and the
serpent.

37

Product
Authentic marketing is the art of identifying and understanding customer needsand
creating solutions that deliver satisfaction to the customers, profits to theproducers and
benefits for the stakeholders. ................... Philip Kotler
The product offerings have to be not only customized but also at a different planealtogether in
case of rural markets. The various product levels as outlined by Philips Kotler, namely Core
Benefit, Basic Product, Expected product, augmented product and Potential Product should be
adequately taken into consideration and the product offerings should be henceforth customized
according to the needs.
38

The Rural market is not a homogenous set of customers with preferences frozen in time. When
developing products in any category, marketers must identify the typical rural specific needs.
Urban products cannot be dumped onto rural markets without modifications. Tailor-made
products are better received by
the rural audience as the consumers feel empowered and tend to dentify with the offering.
Most of the times in the urban market the product is offered at the augmented productlevel
where the objective of the product offering is to exceed the customer expectation.But in the
rural markets of India which have been till date characterized by the absenceof the choice, substandard products and cheap clones of their urban counterparts; the immediate level to be
operated is the Expected product where his expectations are met. Also, due to the low level of
incomes and literacy levels, it is imperative that the basic needs of the consumer are met.

CORE
BENEFIT
BASIC
PRODUCT
EXPECTED
PRODUCT
AUGMENTE
D PRODUCT
POTENTIAL
PRODUCT

For instance, shampoos or soaps with distinctive, strong rose or jasmine perfumes are very
popular with the rural women in South India. The urban women do not identify as strongly with
39

these perfumes. Sachetization is also a distinctly rural-driven phenomenon. As demand in several

categories is being created, intensity of use is quite low. On average, rural folk would use a
shampoo only once a week. Habits take time to change and making unit sachet packs affordable
is the key to inducing trial and purchase.

Pricing
A significant portion of the rural population is paid in daily wages. Daily wage earnerstend to
have little stock of money, and therefore tend to make purchases only to meettheir daily needs.
The implication is that pack sizes and price points are critical to sales,and importantly, that rural
consumers view the purchase-tradeoff dilemma across a muchwider range of product categories.
As a result, the nature of competition is much greater;a beverage manufacturer is not only
competing with other manufacturers in its category, but also other products that consumers may
consider one-off luxury purchases such as shampoo. So marketer will have to examine method
by which he can make the product more affordable. In the case of consumer durable one way is
to work through rural bank and offer higher purchase terms to consumer. In short, the Value for
money is the most important concept that will differentiate the successful brand from the rest.

STATUS SEEKING
CONSUMERS

BUDGET CONSCIOUS
CONSUMER

40

BRAND NAME

MODEL

TECHNOLOGY

IMAGE

BUDGET

BUDGET
WARRANTY
AFTER SALES
BRAND NAME
MODEL

Every marketer must realize that the rural consumer is not a miser. He is not simply looking for
the cheapest product in every category. He understands and demands value for money in every
purchase that he makes. Pricing therefore is a direct function of factors including cost-benefit
advantage and opportunity cost. Pricing offered to consumers should be for value offerings that
are affordable. Price sensitivity is extremely high and comparison with competitive prices is
common. Consumers seem to create narrow psychological price bands in their
Minds for product groups and price elasticity beyond the extreme price points are very high. The
perceived utility or value of the product or service is the ultimate decision making factor.
.

Promotions & Advertising

There are a lot of barriers that militate against homogenous media and message delivery. These
barriers stem from the fact that rural markets vary immensely in terms of tastes, habits and
preferences leading to different expectations of every segment of the population.
However, one fact is certain across all areas. The rural consumer likes to touch and feel a product
before making a choice. Demonstrations are undoubtedly the most effective promotional tool that
41

shapes purchase decisions of the rural population. Demonstrations establish the credentials of
any new technology used in developing the product.
In todays information era, it is very important for companies to wise-up on emerging
technologies. It has in fact become a medium to attract larger audiences for a product
demonstration. Technology must be used to prepare a database of customers and their
requirements. The use of video using mobile vans and even large screen video walls at events
should be arranged.
The classic conundrums of reach and coverage of the media are shattered. Several creative
communication media have been used by various companies to tackle the problem of having to
use visual communication and non-verbal communication to reach the rural audience. This is
required because a large proportion of the rural population cannot read or write. Alliances with
cottage industries, dharmsalas, panchayats, post offices and police stations for advertising have
also helped immensely. More importantly, in rural India, experience has proved time and time
again that word of mouth is the key influencer.
Youth power is becoming increasingly evident in villages. Rural youth bring brand knowledge to
the households. This has forced several companies to change the focus and positioning of their
products and services towards this segment that is growing in absolute number and relative
influence.
There are other attributes in the promotion strategy which are explained as under:
1. Mass media: In the present world mass media is a powerful medium of communication.
The following are the mass media generally used:
Television.
Cinema.
Radio.
Print media: Handbills and Booklets, posters, stickers, banners, etc.

42


2. Personal selling and opinion leaders: In personal selling it is required that the
potential users are identified and awareness is created among them about the product, its
features, uses and benefits. This can be achieved only by personal selling by highly motivated
sales person. In fact the word of mouth information holds lot validity in rural areas even today.
This is the reason why opinion leaders and word of mouth are thriving among rural consumers.
An opinion leader in rural areas can be defined as a person who is considered to be
knowledgeable and is consulted by others and his advice is normally followed. The opinion
leaders may be big landlords or politicians or progressive farmers.

3. Special campaigns: During crop harvest and marketing seasons it is beneficial to take up
special promotion campaigns in rural areas. Tractor owners (tonee) conducted by MRF Limited
is one such example. Brooks Bond carries out marches in rural areas with band, music and
caparisoned elephants to promote their brand of tea.
Mandi and Mela magic
At last count, India witnessed over 50,000 melas. Of these 25,000 meals are held to signify
religious, cultural festivals as well as local fairs and events. On an average, visitors at these
melas spend between Rs. 5,000 to Rs. 50,000 a day. For
Example, 3 lakh people visited the annual mela at Navchadi which lasts for 7 days in Meerut.
The largest such mela is the Maha Kumbh Mela which is visited by an average of 12 crore
people.
There is however, a caveat when an organization is considering using mela for marketing their
products. Is the audience at this mela fit for promotion of the product at hand? What are the
psychographics of this audience? What is the motivational and behavioural impetus that brings
visitors to each of these melas. On considering these questions, it has been observed that melas
are fit to generate product exposure, package familiarity, brand reminder and word of mouth.
However, for products that need concept marketing and those that have high prices, such melas
are not suitable promotion media. This is because the time and the mood of the people that visit
43

these melas are not right to digest technical information or for making large purchases. People
come to melas to have a good time and are not reminded of such high technology or high priced
products when they return home. In the words of Mr. Neville Gomes, Managing Director of
Multimedia Aquarius, promotion at melas is like a one night stand. There will be no reminder
later. Thus, a large amount of qualitative judgment is indeed in planning promotions at melas by
media planners.

Place
Place is the major reason behind the evolution of rural marketing as a distinct discipline. A
village as a place for promotion, distribution & consumption is very
Different from a town or city, thus the general marketing theories cant be applied directly in
rural markets.Reaching the right place is the toughest part in todays rural marketing, as most of
the products reach up to the nearest townships of any village, but due to higher distribution costs,
these products fails to reach the village as the distribution channel fails to put in the required
efforts. Most of the times, the rural retailers themselves go to the urban areas to procure these
goods. Rural markets imply complex logistical challenges that show up as high distribution
costs.

Significance of Distribution
No matter how well devised a companys product, pricing or promotion strategy, the most crucial
link in ensuring the success of rural marketing efforts is distribution. Distribution must be
strengthened and this would raise investment cost barriers for new entrants.In Rural India, the
selection and use of distribution channels is a nightmare. The reason for this is very clear when
we consider that on an average, Urban and Rural India both have approximately 3 million retail
outlets. However, Urban India has only 4,000 towns where these outlets are located. On the other
hand, Rural Indias 3 million outlets are located in 6.3 lakh villages. Thus, marketers are faced
with the problem of feeding 3 million shops located in vastly diverse areas each of which records
an average sale of only Rs.5,000 per outlet. Further compounding this problem is the fact that
even this
meagre sale is mostly on credit. The diversity in the distribution of shops is the self-limiting
factor in terms of servicing the rural distribution network.
44

The distribution of outlets however shows that a marketer need not be present in all markets at
all times. Being present in 6 lakh villages is virtually impossible for an organization of any size.
Rural wealth and demand is concentrated typically at satellite towns, district headquarters,
assembly markets and such central
Locations. Rural distribution has a rigid hierarchy of markets that make channel decisions
relatively structured.

45

It is essential for rural marketing companies to understand this hierarchy. Rural folk are
habituated to travelling once a week for their weekly purchases to a satellite town. They do not
expect such items to be present in every village. For durables where the outlay involved is
typically large, the purchase would be made in an assembly market for reasons of choice and
availability of adequate cash flow. This is due to the fact that it is at assembly markets that
auction yards are present where the farmers congregate to sell their output. After such sale of
produce, they are cash rich and can afford to make such purchases. It is therefore not necessary
for a marketer of TV sets to take their distribution channel all the way down to the village shop.
A TV will not be sold there as the cash flow does
not exist at that point in the hierarchy of markets. A television distributor must be present at
assembly markets which are much smaller in number, more controllable, easier to reach and
service. Keeping the hierarchy in mind will help decide the optimum level of penetration
required to reach a critical mass of rural consumers.

46

MARKETING STRATEGIES TO CAPTURE RURAL INDIA

SEGMENTATION OF RURAL MARKET
The first step is to develop & implement any strategy for the rural market should include the
appropriate segmentation of the rural market. The important thing is that appropriate
segmentation basis need to be applied. Different product categories have different rural markets
to cater to & these can be selected by applying different criteria of segmentation. The
organization can do the following thing to start with:
Focus on select markets.
Focus on select villages.

BYCOMMUNICATING AND CHANGING QUALITY PERCEPTION

Companies are coming up with new technology and they are properly communicating it to the
customer. There is a trade of between Quality a customer perceives and a company wants to
communicate. Thus, this positioning of technology is very crucial. The perception of the Indian
about the desired product is changing. Now they know the difference between the products and
the utilities derived out of it. As a rural Indian customer always wanted value for money with the
changed perception, one can notice difference in current market scenario.

BY PROPER COMMUNICATION IN INDIAN LANGUAGE

The companies have realized the importance of proper communication in local language for
promoting their products. They have started selling the concept of quality with proper
communication. Their main focus is to change the Indian customer outlook about quality. With
their promotion, rural customer started asking for value for money.

BY UNDERSTANDING CULTURAL AND SOCIAL VALUES

Companies have recognized that social and cultural values have a very strong hold on the people.
Cultural values play major role in deciding what to buy. Moreover, rural people are emotional
and sensitive. Thus, to promote their brands, they are exploiting social and cultural values.

BY PROVIDING WHAT CUSTOMER WANT

47

The customers want value for money. They do not see any value in frills associated with the
products. They aim for the basic functionality. However, if the seller provides frills free of cost
they are happy with that. They are happy with such a high technology that can fulfil their need.
As "Motorola" has launched, seven models of Cellular Phones of high technology but none took
off. On the other hand, "Nokia" has launched a simple product, which has captured the market.

BY ASSOCIATING THEMSELVES WITH INDIA

MNCs are associating themselves with India by talking about India, by explicitly saying that
they are Indian. M-TV during Independence Day and Republic daytime make their logo with
Indian tri-colour. Nokia has designed a new cellular phone 5110, with the India tri-colour and a
ringing tone of "Sare Jahan se achcha".

BY TALKING ABOUT A NORMAL INDIAN

Companies are now talking about normal India. It is a normal tendency of an Indian to try to
associate him/her with the product. If he/she can visualize himself/herself with the product, he
/she become loyal to it. That is why companies like Daewoo based their advertisements on a
normal Indian family.

48

Product Strategies
The specific strategies, which can be employed to develop or modify the products to targets the
rural market, can be classified as follows:

1. Small unit packing: Given the low per capita income & purchasing habits of the rural
consumers, small unit packages stand a good chance of acceptance in rural market. Single serve
packets or sachets are enormously popular in India. They allow consumers to buy only what they
need, experiment with new products, & conserve cash at the same time. This method has been
tested by products life shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth
paste, etc. Small packing stands a good chance of acceptance in rural markets. The advantage is
that the price is low and the rural consumer can easily afford it. Also the Red Label Rs. 3.00 pack
has more sales as compared to the large pack. This is because it is very affordable for the lower
income group with the deepest market reach making easy access to the end user satisfying
him.The small unit packing will definitely attract a large number of rural consumers.

2. New product designs: Keeping in view the rural life style the manufacturer and the
marketing men can think in terms of new product designs. The rural product usage environment
is tough because of rough handling, rough roads & frequent power fluctuations. Thus, all these
environmental factors must be considered while developing the products meant for rural
audience.
Nokias 1100 model is a very good example of a customized model for rural markets. Its design
has been modified to protect it against rough usage in rural environment; it is dust resistant & has
a small torch light in view of the frequent power cuts in rural India. It is also introduces
messaging in Hindi language now, in some of the economically priced models in order to cater to
the semi-urban or rural consumers. This is in real terms, thinking global & acting local.

49

3. Sturdy products: Sturdiness of a product is an important factor for rural consumers. The
product should be sturdy enough to stand rough handling, transportation & storage. The
experience of torch light dry battery cell manufacturers supports this because the rural consumers
preferred dry battery cells which are heavier than the lighter ones. For them, heavier weight
meant that it has more over and durability. Sturdiness of a product either or appearance is an
important for the rural consumers.

4. Brand name: For identification, the rural consumers do give their own brand name on the
name of an item. The fertilizers companies normally use a logo on the fertilizer bags though
fertilizers have to be sold only on generic names. A brand name or a logo is very important for a
rural consumer for it can be easily remembered. Many a times rural consumers ask for peeli
tikki in case of conventional and detergent washing soap.
Nirma made a peeli tikki especially for those peeli tikki users who might have experienced better
cleanliness with the yellow colored bar as compared to the blue one although the actual
difference is only of the color.e.g.: Coca-Cola targeted the whole Indian rural market with the
positioning of Thanda Matlab Coca-Cola advertisements because most of the villagers say
when wanting a drink refer to it as Thanda so Coca-cola used that word.

50

Pricing strategies

1. Low cost/ cheap products: This follows from the product strategy. The price can be kept
low by low unit packagings like paisa pack of tea, shampoo sachets, vicks 5 grams tin, etc. this
is a common strategy widely adopted by many manufacturing and marketing concerns.

2. Refill packs / Reusable packaging : In urban areas most of the health drinks are
available. The containers can be put to multipurpose uses. Such measures can a significant
impact in the rural market.

51

Forexample, the rural people can efficiently reuse the plastic bottle of hair oil. Similarly the
packages of edible oil, tea, coffee, ghee etc can be reused. Pet jars free with the Hasmukhrai and
Co Tea, Ariel Super Compact.

3. Application of value engineering: in food industry, Soya protein is being used instead
of milk protein. Milk protein is expensive while Soya protein is cheaper, but the nutrition content
of both is the same. The basic aim is to reduce the value of the product, so that a larger segment
can afford it, thus, expanding the market.

4.Large volume-low margins (Rapid or slow penetration strategy ): Marketers

have to focus on generating large volumes & not big profit margins on
individual products. If they price their product at a level which can lead to good volumes, then
they can still generate good returns on the capital employed.

5.Overall efficiency & passing on benefits to consumers : For rural products, the
strategy should be to cut down the production, distribution & advertising costs & passing on
these benefits to the customers to further increase the turnover. Most often, it has been observed
that advertising has less to do with product sales in the rural areas. If an organization gets the
price point right, then it can work in rural market.

Promotion strategies

52

Customized promotional media & messages need to be developed by the organizations to

effectively target the rural market. The following strategies can be considered while developing
promotional campaigns for the rural markets:

1. Think Global Act Local

Rural population is diverse, but the commonalities of their ethos & simple living habits
need to be understood for advertising to succeed. For that, the theme of the advertisement
needs to revolve among universal themes, such as family-love. But the context, storyline,
language & idioms should be such that the rural audience of different rural market
segments can relate to.

2. Think in Local Idiom

This is the need of the advertising professionals who can think like the rural people. The
only we can have insights like Thanda matlab Coca Cola. There should be the use of
language writers who understands the rural & regional pulse better.

3. Simplicity & Clarity

All promotional messages targeted at rural audience need to be simple & clear, which can
be easily understood, & they should not include any confusing elements. It is preferable
that it has only a few propositions at a time. Bombarding rural consumers with too much,
in less time can easily confuse them & leave them bewildered. Promotional message
should highlight only the functional values of the product & explains how those values
can make the consumers life even better & solve any of his problems.

4. Narrative Story Style

The promotional message can be delivered in the form of an entertaining story with a
message depicting how the brand delivers larger good to the family & society. The
theme of the story line can be about how the product can solve the problems of the rural
consumers.

5. Choice of Brand Ambassador

Brand Ambassador for the rural markets need to be picked carefully as urban successes
might not get replicated in the rural markets. That is why Govinda in the Mirinda as
boosted the sales of the drink in the rural markets.

53

Distribution Strategy
Many companies view the rural markets as great opportunity for expanding their sales but find
distribution as a major problem. Unfortunately, it is almost impossible to transplant strategies
which work successfully in urban markets onto rural markets, namely, extensive retailing and
sustained pull generation through mass media advertising.
The road blocks to reach the rural customers are:

Lack of adequate transport facilities.

Large distances between villages.

Lack of pucca roads connecting villages to nearest townships.

Lack of proper retail outlets

Lack of mass media infrastructure.

The following distribution strategies formulated for the rural category.

1. Coverage of villages with 2000 and above population : Ideally, coverage of

villages with up to 2000 and above population could be the break-even point for a distribution
setup. By doing so the percentage of villages covered comes to only 10% of all the villages, but
the rural population covered will be substantial, to the extent of about 40 to 45 percent. With a
distribution network in about 55,000 villages, which have a population of 2000 persons & above
each, one can cover about 25 crores rural consumers. This strategy is good to begin with & then
subsequently, villages with lesser populations can be added.

2. Segmentation: the number of villages in India is huge & it is not viable to contact & serve
all villages directly. Therefore, companies or distributors can carefully examine the market
potential of different villages & target the villages that can be served in a financially viable
manner through an organized distribution effort.

54

3. Use of co-operative societies: There are over 3 lacks co-operative societies operating in
rural areas for different purposes like marketing cooperatives, farmers service cooperatives and
other multipurpose cooperatives. These cooperatives have an arrangement for centralized
procurement and distribution through their respective state level federation. Such state level
federation can be motivated to procure and distribute consumables items and
low value durable items to the members to the society for serving to the rural consumers. Many
of the societies extend credit to the members for purchases.

4. Utilization of public distributory system: The PDS in the country is fairly well
organized. The revamped PDS places more emphasis on reaching remote rural areas like the hills
and tribals. The purpose of PDS is to make available essential commodities like food grains,
sugar, kerosene, edible oils and others to the consumers at a reasonable price. The shops that
distribute these commodities are called fair price shops. These shops are run by the state civil
Supplies Corporation, co-operatives as well as private entrepreneurs. Here again there is an
arrangement for centralized procurement and distribution. The manufacturing and marketing men
should explore effective utilization of PDS.

5. Agricultural Input Dealers: Fertilizers should be made available to the farmers within
the range of 4-5 km from their residence, as per the essential commodities act. This is why there
are about 2 lakh fertilizer dealers in the country, both in cooperative & private sector. Example of
Varana Nagar inMaharashtra proved an eye opener in this regard where the sugar and milk cooperatives have totally changed the life style of people

Media Vehicles

55

Through the rural markets offer big attractions to the marketers, one of the most
important questions frequently asked is How do we reach the large rural population through
different media and methods?
Mass Media
Radio
Cinema
Press
TV

Local Media
Haats, Melas, Fairs
Wall Paintings
Hoardings
Researchers

Personalized Media
Direct Communication
Dealers
Sales Persons

Formal media
It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoor
advertisement. Reach of formal media is low in rural households (Print: 18%, TV: 27%, Cinema:
30%, and Radio: 37%) and therefore the marketer has to consider the following points:
Newspapers and magazines:
English newspapers and magazines have negligible circulation in rural areas. However local
language newspapers and magazines are becoming popular among educated facilities in rural
areas. Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, Punjab Kesari in
the North, Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural
areas.
Television:
It has made a great impact and large audience has been exposed to this medium. HLL has
been using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some
of the products advertised via television. Regional TV channels have become very popular
especially in Southern states. Examples: SUN TV is very popular even in rural areas in Tamil
Nadu and
Asianet is a preferred regional channel in Kerala. Many consumer goods companies and fertilizer
companies are using these TV channels to reach the rural customer.

Radio:
56

Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti
Labs, Zandu Balm, Zuari industries are some of the companies using radio communication
programme. There are specific programmers for farmers like Farm and Home/Krishi Darshan in
regional languages. The farmers have a habit of listening to regional news/agricultural news in
the morning and the late evening. The advertisement has to be released during this time to get
maximum coverage in rural areas. Another advantage is that the radio commercial can be
prepared at short notice to meet the changing needs of the rural folk. Example: Release of a
pesticide ad at the time of outbreak of a pest or disease in crops.
Cinema:
About 65% of the earnings from cinema are from rural markets. Film viewing habits is high
in certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatres do roaring
business during festivals by having four shows per day. The monthly charge for showing an
ad film is within Rs.500. Local distributor or dealer who has good contacts with cinema
houses in villages can easily monitor this activity. Examples: Films on products like Vicks,
Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides
can also be screened in village theatres.
Wall paintings:
It is an effective and economical medium for communication in rural areas, since it stays there
for a long time depending upon the weather conditions. The cost of painting one square foot area
is just Rs.10. Retailers welcome painting of their
shops so that the shop will look better. Walls of farm houses, shops and schools are ideal places
for painting and the company need not have to pay any rent for the same. The walls have to be
painted at least one or two feet from ground level. It is better to take permission of the owner.
Very often the owner takes responsibility for taking care of the wall painting. Painting to be
avoided during election time and rainy season. The matter should be in the form of pictures,
slogans for catching the attention of people. Companies marketing TV, fans, branded coffee/tea,
toothpaste, pesticides, fertilizers etc. use wall painting as promotion medium in rural areas.

Informal/Rural specific media

57

These media with effective reach and personalized communication will help in realizing the
promotional objectives. Companies to suit the specific requirements of rural communication
are using a variety of such media effectively and some of the more important media and
methods are given below.

Farm-to-Farm/House-to-House visit:
Rural people prefer face-to-face communication and farm visits facilitate two-way
communication. The advantage is that the sales person can understand the needs and wants of
the rural customer by directly discussing with him and answer his queries on products and
services. Potential customers in the village are identified and the companys/distributors
representative makes farm-to-farm visits and highlight the benefits of the products. The
person carries with him literature in local language and also samples of products. The person
does not sell the product but only promotes the use of the product. Very often the local dealer
also joins the representative in making farm-to-farm visits. The dealer clarifies the terms and
conditions of sale and also makes independent
follow up visits for securing orders. Example: This approach has been found to be very
effective for agricultural machinery, animal health products and agricultural inputs. Many
LIC agents and companies dealing with high value consumer durables have tried this method
with success in rich rural areas.
Group meeting:
Group meetings of rural customers as well as prospects are an important part of interpersonal
media. The company is able to pass on the message regarding benefits of the products to a large
number of customers through such meetings. Group meeting of key customers are conducted by
banks, agricultural inputs and machinery companies in rural areas. The bankers visit an identified
village, get the village people in a common place and explain the various schemes to the
villagers. Such meetings could be organized in prosperous villages for promoting consumer
durables and two wheelers also. Example: MRF Tyres conduct tractor owners meet in villages to
discuss repairs and maintenance of tractors.

Field days:

58

These are extension of field demonstrations. One of the main objectives of following modern
agricultural practices is to increase the yield. The company organizes demonstrations in a piece
of land belonging to progressive farmers. All the fertilizers, pesticides, nutrients etc. are applied
after making field observations. Just before harvest, all the important farmers are invited to see
demonstration plot and see for themselves how the yields are better in the plot compared to other
fields. Field demonstrations/field days consume lot of time and efforts and therefore have to be
planned well

FINDINGS AND ANALYSIS

1. Which soap u prefer to use?
The reaction of people towards various SOAP brands
Can be tabulated in the following manner:
BRANDS
PERCENTAGE

LUX
36

DETTOL
18

LIFEBUOY
22

OTHERS
24

In the survey, it could easily be concluded that LUX, the product of HUL was highly in demand.
LUX, the product of HUL covers 36%of the market share. After LUX, the other brands
(EXCEPT LUX, DETTOL, LIFEBUOY) covers 24%of the market share. This is then followed
by LIFEBUOY, the product of HUL with a market share of 22%,which is then followed by
DETTOL, the product of RECKITT BENCKISER with a market share of 18%.
This data can be graphically explained with the help of the following bar graph:

59

LUX
LIFEBUOY
DETTOL
OTHERS

2 Which pack u prefer to use?

In order to determine the income pattern of the consumers, it was necessary for the
researcher to distribute the consumers on the basis of their demand for the various packs of
SOAP brands available in the market. However, the reaction of people towards various packs of
SOAP can be tabulated in the following manner:
PACK OF SOAPS
PERCENTAGE

SINGLE PACK
56

FAMILY PACK ( 3 IN 1)
44

In the survey, I tried to differentiate amongst people with below average

household income, average household income &above household income. This classification
can be done on the basis of the daily expenditure that people make.56% consumers demand
single pack.44% consumers demand family packs i.e.3 in 1 pack.
This data can be graphically explained with the help of the following bar graph:

60

SINGLE PACK
Column1

2. Which tea u prefer to use?

The reaction of people towards various TEA brands can be tabulated in the
following manner:
BRANDS

TATA TEA

BROOKE

TAJ MAHAL

OTHERS

PERCENTAGE

32

BOND
28

18

22

In the survey, it could easily be concluded that TATA TEA, the product of TATA has a market
share of 32%.This is followed by, BROOKE BOND, with a market share of 28%.Followed by
other brands (EXCEPT TATA TEA,BROOKE BOND,TAJ MAHAL)with a market share of
22%.This is finally followed by TAJ MAHAL, the product of HUL which holds18%of the
market share.
This data can be graphically explained with the help of thefollowing bar graph:

61

TATA TEA
BROOKE BOND
TAJ MAHAL
OTHERS

BRANDS

Which tea pack u prefer to use?

In order to determine the income pattern of the consumers, it was necessary for the

researcher to distribute the consumers on the basis of their demand for the various packs of TEA
brands available in the market. However, the reaction of people towards various TEA packs can
be tabulated in the following manner:
TEA PACKS
PERCENTAGE

SACHET
48

MEDIUM PACK
32

LARGE PACKS
20

In the survey, I tried to differentiate amongst the people, with below

average household income, average household income & above household income. This
classification can be done on the basis of the daily expenditure that people make. However, it can
be concluded that sachets are most commonly used by the people .i.e. 48%consumers demand
sachet packs. 32%consumers demand medium pack. 20%consumers demand large pack.
This data can be graphically explained with the help of the following diagram:

62

SACHET
MEDIUM PACK
LARGE PACK

PACKS PREFERRED BY CUSTOMERS

Which tooth paste u prefer to use?

In the initial years, the rural consumers preferred tooth powders, datoons etc. But from the
last decade, the preference of consumers towards toothpaste has been changed. A huge number of
toothpastes of
Different companies are sold in rural market.
However, the reaction of people towards various TOOTH PASTES can be
tabulated as follows:
BRANDS
PERCENTAGE

PEPSODENT
27

COLGATE
35

CLOSE UP
22

OTHERS
16

In the survey that the researcher conducted, it could easily be seen that COLGATE, the product
of COLGATE PALMOLIVE is the market leader, which covers 35%of the total market. After
that, PEPSODENT, the product of HUL is demanded by the customers, which covers 27%of the
market share. Followed by CLOSE UP, the product of HUL is demanded by the customers,
which covers 22%of the market share. Which is then followed by others brands (EXCEPT
PEPSODENT, COLGATE, CLOSE -UP), whichcovers 16%of the total market share.
63

This data can be graphically explained with the help of the following bar graph:

PEPSODENT
COLGATE
CLOSE UP
OTHERS

BRANDS

Which coffee u prefer to use?

The reaction of people towards various COFFEE brands can be tabulated in the

following manner:
BRANDS
PERCENTAGE

BRU
26

NESTLE
32

NESCAFE
32

OTHERS
10

In the survey, it can be easily concluded that all the brands are facing tough
Competition. NESTLE, the product of NESTLE S.A.& NESCAFE, another product of NESTLE
S.A., shares equal market share of 32%each.This means that they are in a very tough
competition. This is followed by BRU, the product of HUL which holds, 26%of the market
share. While theother brands hold only 10%of the market share.

This data can be graphically explained with the help of the following bar graph:

64

BRU
NESTLE
NESCAFE
OTHERS

BRANDS

SUGGESTIONS & RECOMMENDATIONS

The researcher would like to suggest the following points, so that the organizations can easily
sell their products to their consumers:
1. However, the demand of a product is also affected by its life cycle. If the product is in the
introduction stage, then it will definitely take some time to capture the market, because in the
introduction stage, consumers are not much aware about the product. Therefore, it is the
responsibility of the organization to create awareness amongst the consumers.
2.They should adapt rigorous marketing strategies, in order to sustain in the market.
3.There is immense competition in this sector. Therefore, the organizations should try to gain
competitive advantage against their competitors.
4.They should try to reach as many people as possible.
5. for the organizations that are not much popular amongst the consumers should adopt Sales
Promotion, as their marketing strategies.
6.Application of 4As has also become an important task for all the organizations.
(*4A=Availability, Affordability, Acceptability, Awareness)
65

CONCLUSION
This study has shown the new facts relating to the rural market and rural consumer. Consumer
buys frequently and in less quantity. They get influenced with retailers opinion immediately.
1. As purchase gap is less than a week in case of soap/detergent. So we conclude that they buy
goods on need driven demand basis.
2. They get attracted towards additional benefits immediately. As they are interested in various
promotional schemes.
3. Still, awareness level regarding various promotional schemes is very less in the rural
consumer.
4. They ask retailer for his/her opinion about the product before purchase.
5. Retailers in rural villages do not get any additional incentive for the sale of a particular
product.
6. Retailers are of the view that distributor/wholesaler consumes all the benefits.
7. Local retailers have a firm belief that they can sell any product in the rural market if they are
provided with additional incentive.
66

Indian rural market is very vast and there is huge scope for hair oil industry. It was
observed that rural customers are very loyal and they buy out of habit. Many of them use the
product because their grandparents use it. Thus once the company has won the faith of the
customer they will buy it out of habit. There are many companies which are into branded hair oil
but the major players in Punjab are Bajaj, Marico, Hair & Care, and Dabur. They had penetrated
deep in to the markets of Punjab and are the most preferred in the Punjab. The customers in
Punjab are very loyal and most of them are satisfied with their respective brands. The market is
very vast and there are some villages where some of the brands are not even known to the
customers. The local players are also present but do not have large market share.
The rural markets dominate Indian marketing scene and need special Attention for the
expansion of marketing activities and also for providing betterlife and welfare to the rural
people. Given the development, which has taken place in the rural areas under the five- year
plans and other special programmes, today the rural market offers a vast untapped potential.
Development programs in the field of agriculture and allied activities, health education,
communication, rural electrification, etc. have improved the lifestyles
In the end it is certain that FMCG companies will have to really gain inroads in the rural
markets in order to achieve double digit growth targets in future. There is huge potential and
definitely there is lot of money in rural India but the smart thing would be to weigh in the
roadblocks as carefully as possible. The companies entering rural market must do so for strategic
reasons and not for tactical gains as rural consumer is still a closed book and it is only through
unwavering commitment that the companies can make a dent in the market. Ultimately the
winner would be the one with the required resources like time and money and also with the much
needed innovative ideas to tap the rural markets.
The rural market is very large in compare to the urban market as well as it is more
challenging market. The consumer wants those products which are long lasting, good, easy to use
and cheaper. The income level of rural consumers is not as high as the income level of urban
consumers thats why they want low price goods. It is one of the reasons that the selling of sachet
is much larger in the rural area in all segments.
It is necessary for all the major companies to provide those products which are easy to
available and affordable to the consumers. It is right that the profit margin is very low in the
FMCG products, but at the same time the market 236 size is much large in the rural area. The
67

companies can reduce their prices by cutting the costs on the packaging because the rural
consumers dont need attractive packaging. Application of 4A* is also a major task for the major
Companies in this area.
Rural market has an untapped potential like rain but it is different from the urban market so it
requires the different marketing strategies and marketer has to meet the challenges to be
successful in rural market. A rural consumer seeks a good qualitative product at reasonable price
with some additional advantage in terms of quantity of price reduction.

APPENDIX

a)
b)
c)
d)

name:
occupation:
monthly salary:
a. Less than 10,000
b.10,000 25,000
c.25,000 50,000
d.More than 50,000
address:

1. Which soap u prefer to use?

a) Lux
b) Lifebuoy
c) Dettol
d) Others
2 Which pack u prefer to use?
a) Medium pack
b) Family pack
3. Which tea u prefer to use?
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a)
b)
c)
d)

Taj mahal
Tata tea
Brooke bond
Others

4. Which tea pack u prefer to use?

a) Sachet
b) Small pack
c) Medium pack

5. Which tooth paste u prefer to use?

a)
b)
c)
d)

Colgate
Close up
Pepsodent
Others

6. Which coffee u prefer to use?

a)
b)
c)
d)

Nestle
Nescafe
Bru
Others

7. Which cream u prefer to use?

a)
b)
c)
d)

Ponds
Fair and lovely
Ayur
Others

8. which hair oil u prefer to use?

a)
b)
c)
d)

Parachute
Dabur amla
Dabur vatika
Others

9. Which biscuits u prefer to use?

a)
b)
c)
d)

Good day
Marie gold
Parle G
Others

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BIBLIOGRAPHY

www.agencyfages.com
www.oligvys.com
www.adagency.com
www.wikipedia.com
www.google.com
wwwyahoo.com

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