Brief

Overview

of

Rural

and

Urban

Market

of

India

The fact that the majority of South Asia's population of about 1.5 billion resides in villages points
towards the need for marketers to develop a good understanding of rural markets and the rural
marketing phenomenon. In numerical terms, India's rural market is indeed a large one; it consists
of more than 740 million consumers. According to the 2001 census of India 73% of India's total
population
is
rural.
Nearly 70% of the country's population lives in rural areas where, for the first time since
Independence, the overall growth rate of population has sharply declined, according to the
latest Census. Of the 121 crore Indians, 83.3 crore live in rural areas while 37.7 crore stay
in urban areas, said the Census of India's 2011 Provisional Population Totals of Rural-Urban
Distribution in the country, released by Union Home Secretary RK Singh. "For the first time
since Independence, the absolute increase in population is more in urban areas than in rural
areas. The ruralurban distribution is 68.84% and 31.16% respectively," Registrar General of
India
and
Census
Commissioner
C
Chandramouli
said.
The level of urbanization increased from 27.81% in the 2001 Census to 31.16% in the 2011
Census, while the proportion of rural population declined from 72.19% to 68.84%.
Facts state that India's 70 per cent of the population resides in hinterlands and 56 per cent of the
overall consumption comes from there. Rural Indians are no more inferior to the country's urban
clan. Increase in incomes, rising non-farm employment opportunities, higher aspirations and the
Government's focus on rural sustainability schemes are major factors that have been driving the
rural markets' growth. Rural spending was significantly higher at Rs 3,75,000 crore (US$ 67.57
billion) than urban consumption at Rs 2,99,400 crore (US$ 53.95 billion) between 2009-10 and
2011-12; wherein rural consumption per person outpaced its urban counterpart by 2 per cent,
according to a study by CRISIL and preliminary data released for 2011-12 by the National
Sample
Survey
Organization
(NSSO).
Rural markets are also very viable targets for marketers as a young population; rising income and
low penetration of many consumer durables imply that they are a strong source of demand.
Moreover, the consumption pattern in rural areas is witnessing a shift from necessities to
discretionary products. The survey has revealed that about one in every two rural households
now has a mobile phone and around 42 per cent of rural households owned a television in 200910,
up
from
26
per
cent
in
2004-05.
Another study made by the Boston Consulting Group (BCG) has found that small town
consumers (those residing in tier-4 towns) are spending higher on premium products as against
their peers in urban lands. India Inc. is definitely determined to tap higher aspirations and the
urbanizing
consumer
in
smaller
towns.

Understanding

Rural

Market

of

India

According to the Census of India, villages with clear surveyed boundaries not having a
municipality, corporation or board, with density of population not more than 400 Sq. Km. and
with at least 75 percent of the male working population engaged in agriculture and allied
activities would qualify as rural. According to this definition, there are 5,85,764 villages in the
country. Of these, only 0.5 percent have a population above 10,000, and 2 per cent have a
population between 200 and 1000, and another 18 per cent has a population less than 200.
Interestingly, for FMCG and consumer durable companies, any territory that has between 20,000
and 99,999 population, is rural market. So, for them, it is not rural India which is rural.
According to them, it is the Class-II and III towns that are rural.
According to the data from the Census of 2011, cities and towns can be broadly classified as:[3]
*
*
*
*
*
*

Class
Class
Class
Class
Class
Class

I:
II:

50,000
III:
IV:
V:

VI:

Less

100,000
to
20,000
10,000
5,000
than

and
100,000
to
to
to
5,000

Population
*
*
*

above
people
49,999
19,999
9,999
persons
List

>5,000,0001,000,000-4,999,999
500,000-999,999

Megacity
Metropolis
Sub-Metropolis

According to the 2001 census, there are over 5,161 towns and cities in India. Of these, 35 are
metropolitan cities (population of 1 million plus), home to 37% of the urban population or
around 108 million people. Next come the 388 large towns or Class I cities with populations
ranging from 1,00,000-10,00,000. These are the most populous with around 68.9% of the total
urban population. The rest live in the 4,738 Class II towns with population of less than
100,000.
According to the 2001 census, there are 4,378 towns and cities in India. Of these 35 are
metropolitan cities (population of 1 million plus) that are included in the total of 393 Class I
cities with population exceeding 1,00,000. Together they account for 108 million of the urban
population of 285 million. The rest live in towns with population of less than 100,000 going
down
to
just
5,000.

While urban India as a whole faces huge problems, particularly of infrastructure, to support a
burgeoning population, the worse-off are these 4,738 urban centres that have to contend with
the absence of basic services, inadequate new investment and entrenched poverty.
Opportunities

in

Rural

Market

of

India

It is not only the size of the population that makes rural markets in South Asia very important for
marketers. Rural markets offer immense potential for market expansion and growth. For
example, in India, the consumption in rural markets was growing at an annual compounded
growth rate of around 4% for the last 20 years; but this is estimated to grow by over 5% in the
next two decades and this is expected to treble by 2025. As per the Mckinsey Global Institute
forecasts, spending per household in rural India would reach the 2008 levels prevailing in Urban
India
by
the
year
2017.
Latest data from the NSSO's 66th round of survey on household consumption expenditure has
also revealed that the difference between the spending patterns of the urban and rural poor have
narrowed down over the last two years with average spending by a rural household in 2009-10 at
Rs 1,053.64 and urban households at Rs 1,984.46. Crisil, in its report, has pointed to a marked
shift in spending on discretionary goods by rural households as against only necessities. The
report states that more than half of India's stock of consumer durables and two-wheelers are now
in rural India. "Rural consumption has outstripped urban consumption as a result of the
government's strategy of inclusive growth, through programmes like MGNREGA ... The rise in
prices of agricultural commodities as well as loan waiver scheme and stimulus packages
benefited rural households," said NR Bhanumurthy, professor at National Institute of Public
Finance and Policy, adding that the economic slowdown impacted urban incomes more than rural
incomes.
In addition to the consumption trends, the market potential of the rural market is considered to be
the
driver
of
the
future
growth
by
a
number
of
companies.
* The market size for the fast-moving consumer goods (FMCG) in the rural markets in India is
estimated to be Rs. 6,500 billion; consumer durables at Rs. 500 billion, agricultural inputs
(including tractors) at Rs. 4500 billion, and automobiles (two-wheelers and four-wheelers) at Rs.
800
billion,
totaling
to
Rs
12,300
billion.
* The rural market for FMCG products expanded by about 30% between 1992-1993 and 19981999, and accounted for about 53% of this product category's total consumption in India. The
rural market accounted for a similar proportion for consumer durable products too.
* Market indicators such as size and growth rate for many products and product categories are

too attractive for any company to ignore. Another indicator of the future potential can be gauged
from the fact that 48% of the rural population is below 20 years of age.
* The price-sensitivity of a consumer in a village is something the marketers should be aware of.
Rural income levels are largely determined by the vagaries of monsoon and, hence, the demand
there is not an easy horse to ride on. Britannia Industries launched Tiger Biscuits especially for
the rural market. It clearly paid dividend. Its share of the glucose biscuit market has increased
from
7
per
cent
to
15
per
cent
within
a
very
short
period.
* One very fine example can be quoted of escorts where they focused on deeper penetration.
They did not rely on TV or press advertisements, but rather concentrated on focused approach
depending on geographical and market parameters like fares, melas, etc. Looking at the 'kuchha'
roads of village, they positioned their bike as tough vehicle. Their advertisements showed
Dharmendra riding Escort with the punch line 'Jandar Sawari, Shandar Sawari'. Thus, they
achieved
whopping
sales
of
95000
vehicles
annually.
* ITC is setting up e-Choupals, which offers the farmers all the information, products and
services they need to enhance farm productivity, improve farm-gate price realization and cut
transaction costs. Farmers can access latest local and global information on weather, scientific
farming practices as well as market prices at the village itself through this web portal - all in
Hindi. It also facilitates supply of high quality farm inputs as well as purchase of commodities at
their
doorstep.
* The heat of competition in the urban market actually serves as the strong driver behind the
growing interest of Corporates in the rural market. The fact that the rural market is still largely an
untapped and virgin market and the fact that the early entrants can tap it without having to face
intense competition as in the case of urban market, makes the rural market all the more attractive
to them. For example, penetration level for toothpaste in the urban market has now reached close
to 80 per cent. In contrast, it is below 30 percent in the rural market. Obviously, any substantial
further growth in the product can come only from the rural market.
* In the FMCG category, half of the revenue of Hindustan Lever and Colgate comes from the
rural market. It can also be seen that about one-fifth of Pharma sales occur in rural India. In
respect of high-priced durables, about one fourth of the television sales happen in rural India;
Kinetic sells about 30 per cent of its scooters, Toyota nearly half of its vehicles and Hero Honda
40
per
cent
of
its
bikes.
* Shakti is HLL's rural initiative. It seeks to empower underprivileged women of villages with
populations of 2000 or less by providing income-generating opportunities, health and hygiene
education through the Shakti-Vani program, and creating access to relevant information through
the i-Shakti community portal. Shakti is a pioneering effort from the private sector in creating

livelihoods for rural women. Started in 2001, Shakti has already been extended to about 50,000
villages in 12 states Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu,
Chhattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal (respective
state governments and several NGOs are also actively involved in the initiative). For HLL, it is
"enlightened self-interest"creating opportunities to increase the rural family income; putting
more money in their (rural people) hands to purchase the range of daily consumption productsfrom soaps to toothpastes-that HLL makes. It also enables HLL to access hitherto unexplored
rural
hinterlands.
(Kamath,
2003).
* Contrary to the popular belief, the R-panel found that the rural demand is not overwhelmingly
unbranded. In categories such as shaving products, toothpastes, toilet soaps, biscuits, the share of
branded
products
is
higher
than
the
unbranded
local
products.
* According to ORG-MARG data 90 per cent of all shampoo and about 65 per cent packaged tea
sales
in
rural
areas
comes
sachets/small
packs.
* There has been a phenomenal improvement in rural incomes and rural spending power.
Successive good monsoon has led to dramatic boost in crop yields. Tax exemption on rural
income too has been responsible for this enhanced rural purchasing power.
* Rural consumers normally do not make brand discrimination but once induced to buy and use a
product, he becomes loyal to the brand provided he is satisfied about its functional utility, such a
loyal user may even make efforts to get the whole village use it.
* Few business houses like Hindustan Lever, Lipton, ITC, Tatas, Coca-cola, LG etc are
capitalizing
the
marketing
opportunities
in
rural
sector.
* A survey by NCAER shows that the rural market is growing faster than the urban market in
several products. These include packaged tea, detergent powder, washing soap and detergent
cake. Growth in motor cycles too has been more in rural market than the urban market.
Challenges

of

Rural

Marketing

in

India

* Although rural markets offer immense potential, marketers need to recognize the fact that there
are considerable differences in many respects, including the nature, characteristics buying
patterns, and behavior of rural consumers, when compared with their urban counterparts.
* While the urban economy thrives mainly on secondary and tertiary activities such as
manufacturing and services, the rural economy is driven mainly by primary activities such as
agriculture,
fishing,
and
forestry.

* The consumer demand and consumption patterns also differ across rural and urban areas. In
India, for example, electricity reaches only 57.6% of the rural population and, therefore, the
market for household and other electrical equipment such as televisions and fans is also
restricted.
* Similarly, there are also differences in rural literacy and education levels; in India the rural and
urban
literacy
levels
are
58.7%
and
79.9%
respectively.
* Pattern of income levels in rural markets is yet another differentiating factor that affects the
buying power and consumption behavior of rural consumers. About 80% of the rural households
in India, for instance, have a monthly income of less than Rs. 3000.
* In addition, the dispersed nature of the population, the inadequacy of physical infrastructure
like roads, the weak banking system, limited availability of credit facilities, and problems of
storage infrastructure are additional challenges for marketers. These challenges need innovative
solutions.
Conclusion
It is expected that by the year 2015, about 70% of the villages in India would be accessible by
road. The tele-density in the rural areas in India has increased by 174% from 2001 to 2006, and
all villages with a population of over 500 people have telephones with subscriber trunk dialing
(STD) facility. In addition, investments by the governments in improving farm productivity and
generating greater employment opportunities in rural areas have made the rural markets in South
Asia
more
vibrant
and
prosperous.
This has far-reaching implications for marketers. On the one hand, in rural areas the demand for
production and consumption of goods such as farm equipment and machinery, seeds, fertilizers,
pesticides, banking services, and products for personal and family use has increased
substantially. On the other hand, the increased output of the rural economy, namely food grains,
fruits, and vegetables, milk, poultry products, handloom and handicraft products need to be
marketed to the processing and consumption centers, which are usually in urban areas. As a
result, rural marketing that consists of marketing of products to and from rural areas is a vital
activity
in
South
Asia.
Bibliography
1. H.S.Grewal, S.N. Mahapatra and Sanjay Pandey. " Organizational Management, Vol. XXII,."
Role of Rural Melas and Haats in Modern Marketing, No.1. (April-June 2006): pg.9.
2. R.G. Suri, A.S. Sudan. " Rural Marketing-Some issues." Indian Journal of Marketing, Vol:

XXXIII

No.

(10

October

2003):

Pg.23.

3. Reddy, P. Indrasena. "Rural Marketing in India Problems and Prospects." Indian Journal of
Marketing,
Vol:
XXV
No.
(2-3
Feb,
March
1996):
Pg.23.
4. Majumder, I. ""SHAKTI": A Strategic Marketing Approach of FMCG Giant, HUL-Enabling A
Journey Towards Business Excellence In The Era of Globalization." Indian Journal of Marketing,
Vol:
XXXIX
No.9
(September,
2009):
Pg.5
5. Kotler, P. Marketing Management . New Delhi: Pearson Prentice Hall, 2009.
6. Namakumari, V S Ramaswamy and S. Marketing Management. New Delhi: Macmillan India
Ltd,
2006.
7. Panwar, J. S. Beyond Consumer Marketing. New Delh: Response Books A division of Sage
publications,
2004.
Weblography:
www.business-standard.com

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www.indianexpress.com/news/rural-india...urban-spending-/995115
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Rural Marketing: 12 Problems Faced in Rural Marketing

Article shared by
Twelve problems faced in rural marketing are as follows: 1. Deprived people and deprived
markets 2. Lack of communication facilities 3. Transport 4. Many languages and dialects 5.
Dispersed markets 6. Low per capita Income 7. Low levels of literacy 8. Prevalence of spurious
brands and seasonal demand 9. Different way of thinking 10. Warehousing problem 11. Problems
in sales force management 12. Distribution problem.
1. Deprived people and deprived markets:
The number of people below the poverty line has not decreased in any appreciable manner. Thus,
poor people and consequently underdeveloped markets characterize rural markets. A vast
majority of rural people is tradition bound, and they also face problems such as inconsistent

electrical power, scarce infrastructure and unreliable telephone system, and politico-business
associations that hinder development efforts.
2. Lack of communication facilities:
Even today, most villages in the country are inaccessible during the monsoons. A large number of
villages in the country have no access to telephones. Other communication infrastructure is also
highly underdeveloped.
3. Transport:
Many rural areas are not connected by rail transport. Many roads have been poorly surfaced and
got severely damaged during monsoons. The use of bullock carts is inevitable even today. Camel
carts are used in Rajasthan and Gujarat in both rural and urban sectors.
4. Many languages and dialects:
The languages and dialects vary from state to state, region to region and probably from district to
district. Since messages have to be delivered in the local language, it is difficult for the marketers
to design promotional strategies for each of these areas. Facilities such as phone, telegram and
fax are less developed in villages adding to the communication problems faced by the marketers.
5. Dispersed markets:
Rural population is scattered over a large land area. And it is almost impossible to ensure the
availability of a brand all over the country. District fairs are periodic and occasional in nature.
Manufacturers and retailers prefer such occasions, as they allow greater visibility and capture the
attention of the target audience for larger spans of time. Advertising in such a highly
heterogeneous market is also very expensive.
6. Low per capita Income:
The per capita income of rural people is low as compared to the urban people. Moreover, demand
in rural markets depends on the agricultural situation, which in turn depends on the monsoons.
Therefore, the demand is not stable or regular. Hence, the per-capita income is low in villages
compared with urban areas.
7. Low levels of literacy:
The level of literacy is lower compared with urban areas. This again leads to a problem of
communication in these rural areas. Print medium becomes ineffective and to an extent
irrelevant, since its reach is poor.
8. Prevalence of spurious brands and seasonal demand:
For any branded product, there are a multitude of local variants, which are cheaper and hence
more desirable. Also, due to illiteracy, the consumer can hardly make out a spurious brand from
an original one. Rural consumers are cautious in buying and their decisions are slow, they
generally give a product a trial and only after complete satisfaction they buy it again.
9. Different way of thinking:
There is a vast difference in the lifestyles of the people. The choice of brands that an urban
customer enjoys is not available to the rural customer, who usually has two to three choices. As
such, the rural customer has a fairly simple thinking and their decisions are still governed by
customs and traditions. It is difficult to make them adopt new practices.
10. Warehousing problem:

Warehousing facilities in the form of godowns are not available in rural India. The available
godowns are not properly maintained to keep goods in proper conditions. This is a major
problem because of which the warehousing cost increases in rural India.
11. Problems in sales force management:
Sales force is generally reluctant to work in rural areas. The languages and dialects vary from
state to state, region to region, and probably from district to district. Since messages have to be
delivered in the local language, it is difficult for sales force to communicate with the rural
consumers. Sales force finds it difficult to adjust to the rural environment and inadequate
facilities available in rural areas.
12. Distribution problem:
Effective distribution requires village-level shopkeeper, toluka-level wholesaler/dealer, districtlevel stockist/distributor, and company-owned depot at state level. These many tiers increase the
cost of distribution.
Rural markets typically signify complex logistical challenges that directly translate into high
distribution costs. Bad roads, inadequate warehousing and lack of good distributors pose as
major problems to the marketers.

Rural Marketing - Challenges and Prospects

In recent years, rural markets have acquired significance, as the overall growth of the economy
has resulted into substantial increase in the purchasing power of the rural communities.
On account of green revolution, the rural areas are consuming a large quantity of industrial and
urban manufactured products. In this context, a special marketing strategy, namely, rural
marketing, has emerged. But often, rural marketing is confused with agricultural marketing - the
latter denotes marketing of produce of the rural areas to the urban consumers or industrial
consumers, whereas rural marketing involves delivering manufactured or processed inputs or
services to rural producers or consumers.
What Makes Rural Markets Attractive?
Rural market has following attributes and the following facts substantiate this: 742 million people

Estimated annual size of the rural market FMCG

Durables
Agri-Inputs (including tractors)
2 / 4 Wheelers

Rs. 65,000 Crore

Rs. 5,000 Crore
Rs. 45,000 Crore
Rs. 8,000 Crore

In 2001-02, LIC sold 55% of its policies in rural India.

Of two million BSNL mobile connections, 50% are in small towns / villages.
Of the 6.0 lakh villages, 5.22 lakh have a Village Public Telephone (VPT).
41 million Kisan Credit Cards have been issued (against 22 million credit-plus-debit cards in
urban), with cumulative credit of Rs. 977 billion resulting in tremendous liquidity.
Of the 20 million Rediffmail sign-ups, 60% are from small towns. 50% of transactions from
these towns are on Rediff online shopping site.
42 million rural households (HHs) are availing banking services in comparison to 27 million
urban HHs.
Investment in formal savings instruments is 6.6 million HHs in rural and 6.7 million HHs in
urban.
Opportunities
1. Infrastructure is improving rapidly In 50 years only, 40% villages have been connected by road, in next 10 years another 30% would
be connected.
More than 90% villages are electrified, though only 44% rural homes have electric connections.
Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected
by STD.
Social indicators have improved a lot between 1981 and 2001 Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to
23%).
Percentage of BPL families declined from 46% to 27%.
Rural literacy level improved from 36% to 59%.
Low penetration rates in rural areas, so there are many marketing opportunities -

Durables

Urban

Rural

Total (% of Rural HH)

CTV

30.4

4.8

12.1

Refrigerator

33.5

3.5

12.0

Urban

Rural

Total (% of Rural HH)

Shampoo

66.3

35.2

44.2

Toothpaste

82.2

44.9

55.6

FMCGs

Marketers can make effective use of the large available infrastructure -

Post Offices

1,38,000

Haats (periodic markets)

42,000

Melas (exhibitions)

25,000

Mandis (agri markets)

7,000

Public Distribution Shops

3,80,000

Bank Branches

32,000

Proliferation of large format Rural Retail Stores, which have been successful also DSCL Haryali Stores
M & M Shubh Labh Stores
TATA / Rallis Kisan Kendras
Escorts Rural Stores
Warnabazaar, Maharashtra (Annual Sale Rs. 40 crore)
Rural Consumer Insights

Rural India buys Products more often (mostly weekly).

Buys small packs, low unit price more important than economy.
In rural India, brands rarely fight with each other; they just have to be present at the right place.
Many brands are building strong rural base without much advertising support.
Chik shampoo, second largest shampoo brand.
Ghadi detergent, third largest brand.
Fewer brand choices in rural areas; number of FMCG brand in rural is half that of

urban.

Buy value for money, not cheap products.

Some Myths
Myth
1:
Rural
Market
is
a
Homogeneous
Mass
Reality: It's a heterogeneous population. Various Tiers are present depending on the incomes like
Big Landlords; Traders; Small Farmers; Marginal Farmers: Labourers; Artisans. State wise
variations in rural demographics are present viz. literacy (Kerala 90%, Bihar 44%) and
population below poverty line (Orissa 48%, Punjab 6%).
Myth
2:
Disposable
Income
is
Low
Reality: Number of middle class HHs (annual income Rs. 45,000 - 2,15,000) for rural sector is
27.4 million as compared to the figure of 29.5 million for urban sector. Rural incomes CAGR
was 10.95% compared to 10.74% in urban between 1970-71 and 1993-94.
Myth
3:
Individuals
Decide
About
Purchases
Reality: Decision making process is collective. Purchase process - influencer, decider, buyer, one
who pays - can all be different. So marketers must address brand message at several levels. Rural
youth brings brand knowledge to Households (HH).
Why Different Strategies?
Rural markets, as part of any economy, have untapped potential. There are several difficulties
confronting the effort to fully explore rural markets. The concept of rural markets in India is still
in evolving shape, and the sector poses a variety of challenges. Distribution costs and nonavailability of retail outlets are major problems faced by the marketers. The success of a brand in
the Indian rural market is as unpredictable as rain. Many brands, which should have been
successful, have failed miserably. This is because most firms try to extend marketing plans that
they use in urban areas to the rural markets. The unique consumption patterns, tastes,
and needs of the rural consumers should be analyzed at the product planning stage so that they
match the needs of the rural people.
Therefore, marketers need to understand the social dynamics and attitude variations within each
village though nationally it follows a consistent pattern. The main problems in rural marketing
are: Understanding the Rural Consumer

Poor Infrastructure
Physical Distribution
Channel Management
Promotion and Marketing Communication
Dynamics of rural markets differ from other market types, and similarly, rural marketing
strategies are also significantly different from the marketing strategies aimed at an urban or
industrial consumer.
Strategies to be Followed
Marketing Strategy
Marketers need to understand the psyche of the rural consumers and then act accordingly. Rural
marketing involves more intensive personal selling efforts compared to urban marketing. Firms
should refrain from designing goods for the urban markets and subsequently pushing them in the
rural areas. To effectively tap the rural market, a brand must associate it with the same things the
rural folks do. This can be done by utilizing the various rural folk media to reach them in their
own language and in large numbers so that the brand can be associated with the myriad rituals,
celebrations, festivals, "melas", and other activities where they assemble.
Distribution Strategy
One of the ways could be using company delivery van which can serve two purposes - it can take
the products to the customers in every nook and corner of the market, and it also enables the firm
to establish direct contact with them, and thereby facilitate sales promotion.
However, only the bigwigs can adopt this channel. The companies with relatively fewer
resources can go in for syndicated distribution where a tie-up between non-competitive
marketers can be established to facilitate distribution. Annual "melas" organized are quite
popular and provide a very good platform for distribution because people visit them to make
several purchases.
According to the Indian Market Research Bureau, around 8000 such melas are held in rural India
every year. Rural markets have the practice of fixing specific days in a week as Market Days
(often called "Haats') when exchange of goods and services are carried out. This is another
potential low cost distribution channel available to the marketers. Also, every region consisting
of several villages is generally served by one satellite town (termed as "Mandis" or Agrimarkets) where people prefer to go to buy their durable commodities. If marketing managers use
these feeder towns, they will easily be able to cover a large section of the rural population.
Promotional Strategy
Firms must be very careful in choosing the vehicle to be used for communication. Only 16% of
the rural population has access to a vernacular newspaper. So, the audio visuals must be planned
to convey a right message to the rural folk. The rich, traditional media forms like folk dances,
puppet shows, etc., with which the rural consumers are familiar and comfortable, can be used for
high impact product campaigns.
Some Live Examples

One very fine example can be quoted of Escorts where they focused on deeper penetration. They
did not rely on TV or press advertisements, but rather concentrated on focused approach
depending on geographical and market parameters like fares, melas, etc. Looking at the 'kuchha'
roads of village, they positioned their bike as tough vehicle. Their advertisements showed
Dharmendra riding Escort with the punch line 'Jandar Sawari, Shandar Sawari'. Thus, they
achieved whopping sales of 95000 vehicles annually.
HLL started 'Operation Bharat' to tap the rural markets. Under this operation, it passed out lowpriced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to
twenty million households.
ITC is setting up e-Choupals, which offers the farmers all the information, products and services
they need to enhance farm productivity, improve farm-gate price realization and cut transaction
costs. Farmers can access latest local and global information on weather, scientific farming
practices as well as market prices at the village itself through this web portal - all in Hindi. It also
facilitates supply of high quality farm inputs as well as purchase of commodities at their
doorstep.
BPCL introduced Rural Marketing Vehicle (RMV) as their strategy for rural marketing. It moves
from village to village and fills cylinders on the spot for the rural customers. BPCL considered
low-income of rural population, and therefore introduced a smaller size cylinder to reduce both
the initial deposit cost as well as the recurring refill cost.
Conclusion
Thus, looking at the challenges and the opportunities, which rural markets offer to the marketers,
it can be said that the future is very promising for those who can understand the dynamics of
rural markets and exploit them to their best advantage. A radical change in attitudes of marketers
towards the vibrant and burgeoning rural markets is called for, so they can successfully impress
on the 230 million rural consumers spread over approximately six hundred thousand villages in
rural India.