A

Project Report
On

“SUCCESS MANTRAS FOR RURAL

MARKETING IN INDIA”

Submitted to : Submitted By:

Prof. Shipra Chaddha Name- Vakul Singh Gupta

FPG0810/184

Indian Business Academy

What makes Indian Rural Market so attractive to companies
The Indian rural market has a huge demand base and offers great opportunities to marketers.
Two-thirds of Indian consumers live in rural areas and almost half of the national income is
generated here. The reasons for heading into the rural areas are fairly clear. The urban consumer
durable market for products like colour TVs, washing machines, refrigerators and air
conditioners is growing annually at between 7 per cent and 10 per cent.

The rural market is zooming ahead at around 25 per cent annually. "The rural market is growing
faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989 -crore(Rs billion)
Videocon Appliances. "The urban market is a replacement and up gradation market today," adds
Samsung's director, marketing, Ravinder Zutshi.

Reasons for improvement of business in rural area

 Socio-economic changes (lifestyle, habits and tastes, economic status)

 Literacy level (25% before independence – more than 65% in 2001)
 Infrastructure facilities (roads, electricity, media)
 Increase in income 
 Increase in expectations

MART, the specialist rural marketing and rural development consultancy has found that 53 per
cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales, said its
head Pradeep Kashyap at the seminar. Of two million BSNL mobile connections, 50 per cent
went to small towns and villages, of 20 million Rediffmail subscriptions, 60 per cent came from
small towns, so did half the transactions on Rediff's shopping site.
Why was this market left untapped for so long? What has
changed now that is invoking interest of companies
A) 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.
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. Many languages and diversity in culture: Factors like cultural congruence, different
behaviour and language of the respective areas make it difficult to handle the customers.
Traits among the sales force are required to match the various requirements of these
specific areas.
7. 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 consumer’s behaviour in these areas is traditional,
which may be a problem for effective communication.
8. Spurious brands: Cost is an important factor that determines purchasing decision in
rural areas. A lot of spurious brands or look-alikes are available, providing a low cost
option to the rural customer. Many a time the rural customer may not be aware of the
difference due to illiteracy.
9. Seasonal demand: Demand may be seasonal due to dependency on agricultural income.
Harvest season might see an increase in disposable income and hence more purchasing
power.
10. Dispersed markets: Rural population is highly dispersed and requires a lot of marketing
efforts in terms of distribution and communication.

B) "Going rural" the new marketing mantra-all corporate companies agreed that the rural
market the key to survival in India. The real India lives in villages-6, 38,365 villages to
be precise. This is where the fortunes of many of Indian biggest corporations are likely to
be shaped. To expand the market by tapping the countryside, more and more MNC`s are
foregoing into rural markets. Among those that have made some headway are HLL,
Coca-cola, LG Electronics, Britannia, Standard life, Philips, Colgate Palmolive, ITC and
the foreign-invested telecom companies. Gone are the days when a rural consumer went
to a nearby city to but branded Products and services`. Time was when only a select
household consumed branded goods, be it tea (or) jeans. There were days when big
companies flocked to rural markets to establish their brands. Today, rural markets are
critical for every marketer-be it for a branded shampoo (or) an automobile. Time was
when marketers thought van campaigns, cinema commercials and a few wall paintings
 would suffice to entice rural folks under their folds. Thanks to television, today a
customer in a rural area is quite literate about myriad products that are on offer in the
market place. An Indian farmer going through his daily chores wearing jeans may sound
idiotic. Not for Arvind Mills, though. When it launched the Ruf & Tuf kits, it had created
quite a sensation among the rural folks as well within few months of their launch.

How are companies customizing their products, promotions,

distribution & prices to match the needs of the consumers
Product
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.

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 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.

Systematic, in-depth research that can help understand the depths of the mind of the villagers,
their buying criteria, purchase patterns and purchasing power are an essential input while
developing rural specific products or services.

A common error has been to launch a completely stripped down version of the urban product in the rural
market, with the objective of offering the lowest possible price. This is not what a rural consumer wants.
What is required is to introduce a product with ‘essential’ features, whose needs are recognized and for
which the consumer is willing to pay (value-adding features). Product developers should aim at
eliminating all the cost-adding features, i.e., features which a consumer is unwilling to pay for as he sees
no obvious utility. This would “redefine value” in the minds of the consumer and tremendously increase
product acceptability.

Product development is severely constrained by legislation in the case of agricultural inputs like
fertilizers, insecticides and pesticides. In the case of fertilizers for instance, though levels of deficiency of
nutrients have increased significantly over the past decade, no significant changes in formulations notified
under the Fertilizer Control Order have taken place. This has severely restricted the availability of cost
effective specialty fertilizers of global standards to Indian farmers. Technological know-how for
manufacture of such fertilizers exists within the country. However, farmers using modern farming
practices are unable to get an assured supply of such farm inputs due to draconian legislation. A move to
liberalize the sector could perhaps consider the accepted worldwide norm of allowing manufacturers with
a strong R&D base to decide their own formulations with the government machinery conducting checks
on market samples of finished products to ensure that they live up to the labelled specifications. This
would be a major policy initiative that would give a huge impetus to innovative product development in
the farm sector.

Product life cycles as are becoming shorter and these are having their impact on company life cycles.
Thus for any company wishing to develop its product portfolio, allegiance to the classic American P-A-L
Principle of Partnership - Alliances - Linkages is a basis for survival.

Pricing
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 is very high. The perceived utility or
value of the product or service is the ultimate decision making factor.

It is certain however, that buying cheap is not the primary objective. Rather, it is “buying smart”. A study
revealed that the average rural consumer takes approximately 2 years to decide on buying a watch! He
will not do so unless he is totally convinced that he is getting value for Money. Impulse buys and
purchases for conspicuous consumption are also extremely few and far Between considering the “value
for money” factor that reigns supreme in most rural purchase decisions.

It must be remembered that the rural consumer does not have a budget problem. He has a cash flow
problem. This is because the village folk receive funds only twice a year. At these times, he is capable of
making high volume purchases. At all times, however, the unit price is critical and so is the pack size.
Because of this, in the lean season when there is a cash flow crunch, marketers need to provide financial
products, schemes or solutions that suit the needs of the rural population.

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 shapes
purchase decisions of the rural population. Demonstrations establish the credentials of any new
technology used in developing the product.

In today’s 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.
Intermediaries are the foundation to rural distribution. If the intermediary understands and is constantly
reminded about your product, then the end user will not be allowed to forget. The companies must
reinforce this highly effective medium and use all their innovation and money tom develop more dramatic
point of sale and point of contact material. This becomes all the more important when in rural India, more
often than not, the overlap between the product categories sold in a single outlet in tremendous. For
instance, a store may call itself as a grocery store but will stock everything from groceries to vegetables to
fertilizers and may at times even stock medicines. In such cases, the point at which the customer actually
comes in contact with a product may not be the point at which the sale is affected.

The re-use capacity and colour of the container in which the product is packed is also a crucial factor. In
fact, reusable packaging is considered a major aid in promoting sales for products in the rural market.

Consumer and Trade schemes that Incentivise Spending using discount coupons, off season discounts,
free samples, etc. encourage spending. Lucky draws and gift schemes are a major hit in most states.

The use of local idioms and colloquial expressions are an excellent way to strike a rapport with the rural
consumer and must be borne in mind when developing media plans and public relations programmes. No
high voltage publicity is required. The rural consumer is very down to earth but equally discerning and
marketers need to step into the shoes of the rural folk while creating product promotion campaigns.

Another unique feature of rural markets is that the Decision making process is collective. The persons
involved in the purchase process - influencer, decider, buyer, one who pays can all be different. So
marketers must address brand messages in their campaigns at several levels. Apart from regular
household goods, several agribusiness companies have also started providing gift schemes with offers for
free jewellery that influences the ladies to pressure the farmers to purchase agricultural inputs from select
companies. This promotion strategy thus makes women influence purchase decisions that they would
ordinarily not be involved in.

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.

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 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 can’t be applied directly in rural markets.
Reaching the right place is the toughest part in today’s 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 company’s 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 India’s 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.

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.
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.

Haats

Haats are the nerve centre of Rural India. They are a readymade distribution network embedded in the
fabric of rural society for over 1000 years. They have been held on a regular basis across the length and
breadth of the country for over 1000 years. Right from the time of Chandragupta Maurya, Haats are seen
as a place for social, cultural and economic interchange.

One in every five villages with a population of over 2000 has a haat. In villages with less than 2000
people this figure reduces to 1 in 20 villages. Typically, an average haat will have close to 300 stalls. A
haat usually serves around 5000 visitors. Considering that the average population of an Indian village is
approximately 1000, each haat serves 5 villages. A study estimates that 47,000 haats are conducted in
rural India. These rural super markets are much larger than all the world's K-marts and Wal-marts put
together.

A lot of re-distribution also occurs through haats. This is because, a large number of retailers and sub-
wholesalers buy from haats for their village stores. What is most attractive to marketers is that 90% + of
sales in haats are on cash basis. Traditionally, in village shops a lot of credit sales occur due to the fact
that in a small geographic area of a village, everybody knows everybody. Considering that over 5000 visit
a haat from 5 villages, the system gets derelationalised. Apart from the 90% cash sale, 5 to 7% is
conducted on barter system and the rest 3 to 5% is on credit. Also attractive to companies wishing to use
the system is the low selling overheads. Participation fees at haats are a flat Re.1 to Rs.5 per stall and this
rate is common to a giant like Hindustan Lever and the smallest local seller.

Distribution costs must be reduced through optimum utilization of the network. Thus, incorporating haats
in the distribution strategy of a rural marketing organization selling consumer goods and FMCG products
(typically once a week purchase items) is a tremendous opportunity.

Perhaps the other most important factor to consider while developing rural distribution strategy is that the
move from transactional marketing to relationship marketing is most evident in the village market. A
strong bond needs to be created with every consumer even in the remotest village and the smallest town.
Marketing in Rural India is undoubtedly a long-haul exercise and one that involves great expense. Only
those with a strong mind, a tough heart and stiff hands survive.

There is also a need to realise that the dealer is the company's "unpaid" sales force. It is essential
to educate and involve him as he is the local company representative and is the only member in
the channel of distribution that is in direct contact with the final consumer. The dealers' feedback needs to
be obtained as the direction for future strategy emanates here.

.
. Companies are doing a lot of innovations in their products to
match the needs of the consumers. Do you think it is necessary

Tends indicates that the rural the rural markets are coming up in a way and growing twice as fast
as the urban, witnessing a rise in sales of hitherto typical urban kitchen gadgets such as
refrigerators, mixer-grinders and pressure cookers. According to a National Council for Applied
Economics Research (NCAER), study, there are as many 'middle income and above' households
in the rural areas as there are in the urban areas. There are almost twice as many 'low middle
income' households in rural areas as in the urban areas. At the highest income level there are 2.3
million urban households as against 1.6 million households in rural areas. According to
Mr.D.Shiva Kumar, Business Head (Hair), personal products division, Hindustan Lever Limited,
the money available to spend on FMCG (Fast Moving Consumer Goods) products by urban India
is Rs.49,500 crores as against is Rs.63,500 crores in rural India.

As per NCAER projections, the number of middle and high-income households in rural India is
expected to grow from 80 million to 111 million by 2007. In Urban India, the same is expected
to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be
double that of urban India.  Rural income levels are largely determined by the vagaries of
monsoon and, hence, the demand there is not an easy horse to ride on. Apart from increasing the
geographical width of their product distribution, the focus of corporate should be on the
introduction of brands and develop strategies specific to rural consumers. Britannia industries
launched Tiger Biscuits especially for the rural market. An important tool to reach out to the
rural audience is through effective communication. A rural consumer is brand loyal and
understands symbols better.  This also makes it easy to sell look-alike. The rural audience has
matured enough to understand the communication developed for the urban markets, especially
with reference to FMCG products. Television has been a major effective communication system
for rural mass and, as a result, companies should identify themselves with their advertisements.
Advertisements touching the emotions of the rural folks, it is argued, could drive a quantum
jump in sales.
A lot of products that are being taken to rural markets are very
new for rural consumers from mobiles to lpg gas. How are
companies managing the transition and convincing consumers?
What all tactics are being used to involve & engage the
consumers

Consumer Buyer Behaviour refers to the buying behaviour of final consumers - individuals and
households who buy goods and services for personal consumption. All of these final consumers
combined make up the consumer market.

The consumer market in this case is Rural India. About 70% of India’s population lives in rural
areas. There are more than 600,000 villages in the country as against about 300 cities and 4600
towns. Consumers in this huge segment have displayed vast differences in their purchase
decisions and the product use. Villagers react differently to different products, colours, sizes, etc.
in different parts of India. Thus utmost care in terms of understanding consumer psyche needs to
be taken while marketing products to rural India.

Thus, it is important to study the thought process that goes into making a purchase decision, so
that marketers can reach this huge untapped segment.

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.
 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 & that’s 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.
5. Place of purchase (60% prefer HAATS due to better quality, variety & price)
Companies need to assess the influence of retailers on both consumers at village
shops and at haats.
6. Creative use of product ex Godrej hair dye being used as a paint to colour horns of
oxen, Washing machine being used for churning lassi. The study of product end
provides indicators to the company on the need for education and also for new
product ideas.
7. Brand preference and loyalty (80% of sale is branded items in 16 product categories)

Cultural factors influencing consumer behaviour

Cultural factors exert the broadest and deepest influence on consumer behaviour. The marketer
needs to understand the role played by the buyer’s culture. Culture is the most basic element that
shapes a person’s wants and behaviour.
In India, there are so many different cultures, which only goes on to make the marketer’s job
tougher. Some of the few cultural factors that influence buyer behaviour 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.
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 Mukhiya’s 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, VCR’s, LCV’s
What brand building efforts are being done in rural markets?
Are rural consumers brand conscious
BY COMMUNICATING 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 TARGET CHANGING PERCEPTION

If one go to villages they will see that villagers using Toothpaste, even when they can use Neem
or Babool sticks or Gudakhu, villagers are using soaps like Nima rose, Breeze, Cinthol etc. even
when they can use locally manufactured very low priced soaps. Villagers are constantly looking
forward for new branded products. What can one infer from these incidents, is the paradigm
changing and customer no longer price sensitive? Indian customer was never price sensitive, but
they want value for money. They are ready to pay premium for the product if the product is
offering some extra utility for the premium.

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

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 PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS

Companies are picking up Indian models, actors for advertisements as this helps them to show
themselves as an Indian company. Diana Hyden and Shahrukh Khan are chosen as a brand
ambassador for MNC quartz clock maker "OMEGA" even though when they have models like
Cindy Crawford.

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 PROMOTING INDIAN SPORTS TEAM

Companies are promoting Indian sports teams so that they can associate themselves with India.
With this, they influence Indian mindset. LG has launched a campaign "LG ki Dua, all the best".
ITC is promoting Indian cricket team for years; during world cup they have launched a campaign
"Jeeta hai jitega apna Hindustan India India India". Similarly, Whirlpool has also launched a
campaign during world cup.

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.

BY DEVELOPING RURAL-SPECIFIC PRODUCTS

Many companies are developing rural-specific products. Keeping into consideration the
requirements, a firm develops these products. Electrolux is working on a made-for India fridge
designed to serve basic purposes: chill drinking water, keep cooked food fresh, and to withstand
long power cuts.

BY GIVING INDIAN WORDS FOR BRANDS

Companies use Indian words for brands. Like LG has used India brand name "Sampoorna" for its
newly launched TV. The word is a part of the Bengali, Hindi, Marathi and Tamil tongue. In the
past one year, LG has sold one lakh 20-inch Sampoorna TVs, all in towns with a population of
around 10,000.

BY ACQUIRING INDIAN BRANDS

As Indian brands are operating in India for a long time and they enjoy a good reputation in India.
MNCs have found that it is much easier for them to operate in India if they acquire an
Established Indian Brand. Electrolux has acquired two Indian brands Kelvinator and Allwyn this
has gave them the well-established distribution channel. As well as trust of people, as people
believe these brands. Similarly Coke has acquired Thumps up, Gold Spot, Citra and Limca so
that they can kill these brands, but later on they realized that to survive in the market and to
compete with their competitor they have to rejuvenate these brands.

BY EFFECTIVE MEDIA COMMUNICATION

Media Rural marketing is being used by companies. They can either go for the traditional media
or the modern media. The traditional media include melas, puppetry, folk theatre etc. while the
modern media includes TV, radio, and e-chaupal. LIC uses puppets to educate rural masses
about its insurance policies. Govt of India uses puppetry in its campaigns to press ahead social
issues. Brook Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in
Etawah district. In between such a show, the lights are switched of and a torch is flashed in the
dark (EVEREADYs tact).

BY ADOPTING LOCALISED WAY OF DISTRIBUTING

Proper distribution channels are recognized by companies. The distribution channel could be big
scale Super markets; they thought that a similar system can be grown in India. However, they
were wrong; soon they realized that to succeed in India they have to reach the nook and the
corner of the country. They have to reach the "local Paan wala, Local Baniya" only they can
succeed. MNC shoe giants, Adidas, Reebok, and Nike started with exclusive stores but soon they
realized that they do not enjoy much Brand Equity in India, and to capture the market share in
India they have to go the local market shoe sellers. They have to reach to local cities with low
priced products.

BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES

MNCs have realized that in India celebrities enjoyed a great popularity so they now associate
themselves with Indian celebrities. Recently Luxor Writing Instruments Ltd. a JV of Gillette and
Luxor has launched 500 "Gajgamini" ranges of Parker Sonnet Hussain special edition fountain
pens, priced at Rs. 5000. This pen is signed by Mr. Makbul Fida Hussain a renowned painter
who has created "Gajgamini" range of paintings. Companies are promoting players like
Bhaichung Bhutia, who is promoted by Reebok, so that they can associate their name with
players like him and get popularity.

MELAS

Melas are places where villagers gather once in a while for shopping. Companies take advantage
of such events to market their products. Dabur uses these events to sell products like JANAM
GHUTI (Gripe water). NCAER estimates that around half of items sold in these melas are
FMCG products and consumer durables. Escorts also display its products like tractors and
motorcycles in such melas.

PAINTINGS

A picture is worth thousand words. The message is simple and clean. Rural people like the sight
of bright colors. COKE, PEPSI and TATA traders advertise their products through paintings.
 Recommend Success Mantras for Rural Markets

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.
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 that’s why they want low price goods. It is one of the reasons that the sell 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 size is much large in the rural area. The companies can
reduce their prices by cutting the costs on the packaging because the rural consumers don’t need
attractive packaging.
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.

References
1. www.thehindubusinessline.com/nic/073/index.htm
2. www.coolavenues.com/know/mktg/
3. www.indianmba.com/Faculty_Column/FC658/fc658.html
4. business.mapsofindia.com/rural-economy/state-development/marketing.html
5. www.icmrindia.org/casestudies/catalogue/Marketing/MKTG081.htm
6. www.google.com
7. www.wikipedia.com
8. www.deccanherald.com