Tapping Indian Rural Market

TAPPING INDIAN RURAL MARKET
BY:
DEEPIKA TYAGI
HITESH MAHANSARI
TONMOYEE GOSWAMI
UTSAV GUPTA
SAUMYA VERMA
PALLAVI LUTHRA
FLOW OF PRESENTATION
INTRODUCTION
EVOLUTION
GO RURAL DECISION
CONSUMER BEHAVIOR
BUYERS CHARACTERSTICS
PRODUCT STRATEGY
PRICING STRATEGY
DISTRIBUTION STRATEGY
DIRECT AND INDIRECT MARKETING
RURAL RETAILING
PROMOTION STRATEGY
COMMUNICATION MEDIA
3 P FRAMEWORK
PROJECT SHAKTI
INTRODUCTION
 According to innovation focused marketers Rural is
defined as a group of people who are traditionalists
in outlook, rooted in the land and who resist
change.
 Most companies in the FMCG and agri-input sector

would define rural as a place with a population of
up to 20,000.Durable goods companies would
consider any town with a population of below
50,000 as a rural market.
EVOLUTION
PHASE 1(before mid 1960 s)
• Agricultural marketing.
• Marketing of rural products in rural and urban areas.
• Unorganized market.
PHASE 2(mid 1960s to mid 1990s)

• The Green Revolution.
• Marketing of agricultural inputs.
• Village markets flourished and indegeneous products
hit the urban markets on a large scale.
PHASE 3(after mid 1990s)
• India’s industrial sector gained strength.
• Emergence of new service sector.
• Steady growth in the rural market for household
consumables and durables.
PHASE 4(around 2015)

• Global rural marketing will emerge.
GO RURAL DECISION
Saturation in urban markets.
URBAN PUSH
●
●
Fierce competition in urban
FACTORS markets.
RURAL PULL
●
Rising affordability & lifestyle
changes.
FACTORS ●
Growing acceptance & awareness.
RURAL ●
Uneven development, fragmented markets.
INHIBITING ●
Heterogenity in lifestyle, low disposable
income, competition from MNC’s.
FACTORS
CONSUMER
BEHAVIOR
RURAL CONSUMERS ON THE
GROWTH TRACK
 70% of India’s population, 56%of its income,
64% of its expenditure and 33% of its saving
come from rural India.
 The rural market now accounts for 54% of all
Indian FMCG sales, 59% of durables sales,
100% of agri-input sales and 10% to 50% of
two wheeler and four wheeler sales.
BUYING DECISION PROCESS
The decision making process

THE BUYER
CHARACTERSTICS
PRODUCT STRATEGY
 ACCEPTABILITY is the Key factor
 The customer should think that they can buy the

product by putting an extra money on that.
 They should feel that the product is designed as per

their needs.
 They should think that the product gives some value to

them.
 The customer should feel the comfort with the product

and there should not be any hesitation to go for it.
PRODUCT STRATEGY
 Sampoorna TV
LG Electronics re-jigged the TV to appeal to local needs.
It spent $50,000 (Rs. 21 lakhs) to develop a set that
would have on-screen displays in the languages of Hindi,
Tamil & Bengali.
PRICING STRATEGY
 AFFORDABILITY is the Key factor
 Affordability here does not mean that cheaper products should

me made and marketed.
 The designing of the product should match the needs of the

customer.
 The Customer should not think that they cannot buy it, that
means it should be in their buying capacity.
 The income earned in rural markets is from different ways , so

by keeping this in mind most of the companies should design
the product in such a way that it reaches the customer.
PRICING STRATEGY
DISTRIBUTION STRATEGY
 Distribution – central to the success of rural marketing
strategy
 Making decisions on logistics and channel design much
easier now
 Major challenge – finding and reaching out to consumers in
rural hinterland
DISTRIBUTION PRACTICES –
FMCG SECTOR
 Three pillar distribution strategy of Colgate-Palmolive
- Promotions through haats and melas
- Focus on satisfaction of everyone involved in distribution
- Automated information system: easy to track market data
on real-time basis
 Emami
- Introduced new super-stockists networks for rural coverage
- Van Operations Model
 Godrej
- GCPL Rural initiated a project “Dharti”
- Newspaper distribution by auto-drivers and boat-drivers in
Kerala
DIRECT MARKETING
 Company sales force
 Van marketing
 Stalls at haats, melas and fairs
 Network marketing
 Internet marketing
INDIRECT MARKETING
 Syndicated distribution
 Channel levels
Traditional Channel Members:

 Wholesalers
 Retailers
Tata Tea’s “Gaon Chalo”

Initiative in UP
RURAL RETAILING
 Includes FMCG goods, durables, agricultural inputs and
vehicles such as tractors.
 The rural retail market forms around 40 percent of the total
size of retail market in India, worth USD 280 billion
(ASSOCHAM reports)
 Present Scenario – not very encouraging
- Only 10000 of 0.6 million villages in India cab access
organised retail services
RURAL MALLS
 Huge malls that act as one-stop shop
These have the following facilities:

 Mandi, Home needs storage, Medical/Veterinary services,
Sources of entertainment
PROMOTION STRATEGY
PROMOTIONAL MIX
(1)DIRECT COMMUNICATION:
Example: In 2001, Colgate-Palmolive
launched “Operation Jagruti ”.
(2)INTERACTIVE MEDIA:
Example: Marico Industries launched a van
campaign
Brooke Bond Lipton India Ltd (BBLIL) markets
its rural brands through magic shows and skits.
(3)PUBLICITY / PR:
EXAMPLES: HUL micro-marketing programme in India
tapped into women self-help groups .
Nokia work together with micro-finance organizations to sell
mobile phones.
(4)PERSONAL SELLING:
Many LIC agents and ACC representatives make house-to-
house visits and provide information about their products
(5)ADVERTISING:
EXAMPLES: Philips India used to have parades of people dressed as
electric bulbs or batteries.
HUL used a giant cut-out of Lifebuoy during a boat race in Kerala
that is held as a part of Onam festival.
(6)SALES PROMOTION:
OFFERS: “buy-more-to-save-more” concepts .
SAMPLING: Distribution of samples achieves both brand awareness
and conviction.
DEMONSTRATIONS/EXPERIENTIAL MARKETING: touch and feel
experience. Unilever’s Lifebuoy soap used a “germ-glow box” as a
part of a demo kit.
COMMUNICATION MEDIA:
COMMUNICATION MEDIA
N ON -PERS ON AL MEDI A PERS ON ALIZED MEDIA
MASS MEDIA ATMOSPHERICS

O UTDO OR MEDI A
EVENTS
3P FRAMEWORK:
RURAL MARKETING IN INDIA
(WITH REFERENCE TO RESEARCH PAPER BY MR. AJITH PENNINCHIKUNATH,LECTURER GD GOENKA INSTITUTE OF
MANAGEMENT)
PAPER DEALS WITH:
 urban myopia:
intense competition in urban
esclation of cost of entrance
creation of imbalance
 3-p framework on tapping the rural market
*rural neglect due to lack of integrate approach
*holistic frame work
*approach of:
availability (of products),
awareness (education about the benefits) and
empowerment of rural consumers (by inviting them to be a part
of the value creation process).
 Push marketing : rural context
No
modification
Urban Rural
product market
Distributio
n focus
 Attract channel members and motivate them

 Reach the remotest part
 sales promo schemes are trader oriented
eg: rural retail outlet (competition for shelf space)
 Pull marketing; rural context:
modified
Urban Rural
product market
Communication
and customization
 Brand building focus
 use media, melas and haats as the focal approach to target rural consumers their
special needs/wants/ special focus on tastes and preferences
 consumer oriented promotional schemes
 persuasion ,word of mouth
PULL –UP MARKETING
 Co-creation (involves collaboration with various organizations)-Dialogue,
Access, Risk assessment and Transparency.
 Purchasing power enhancement through Microfinance, Micro enterprise,
 Empowerment (Eliminating the long chain)
 local sourcing of raw materials and adoption of indigenous
technology( CSR)
Empowermen
Marketing t
firm focus
Co-creation focus
Urban markets Rural marketing

Push stratergy initiatives:
Bharati Airtel -The mobile services have covered around three
lakh villages, planned expansion to 6lakh villages over the next
two to three years.
 ICICI Bank has formulated a comprehensive channel strategy for
rural markets with multiple channels catering to all segments of
the rural population. Involving icici kiosk within the range of 10 km.
Pull strategy initiative:

HUL use street performers - magicians, singers, dancers
and actors-adjusting their scripts and acts based on rural market
As a result ,public awareness of Breeze 2-in-1, its low-priced
shampoo-soap, increased from 22 to 30 percent.
PULL UP STRATEGY INITIATIVE
itc e-choupal
 direct marketing
 Enriching the farmer with knowledge
 role of the Choupal Sanchalak
 already benefiting over 3.5 million farmers. By 2012,the e-Choupal network will
cover over 100,000 villages, representing 1/6th of rural India
 Rural Innovations Network (RIN):

Rural Innovations Network (RIN) works to tap this inventiveness of farmers
and entrepreneurs
Eg:
 water crisis in Sadalga village, located in Karnataka’s drove sugarcane farmer
Anna Saheb to develop a low-cost drip irrigation system. resulting in 50
percent saving on water and 10 percent increase in yield.
RURAL MARKET INITIATIVES BY
HINDUSTAN UNILEVER LIMITED
 HUL linked the company’s core

business with rural development
 initiatives as it is mutually
beneficial to both the society at
large and for the company..
 •Rural sales contribute around
40% to HLL’s overall sales
 •HUL has been proactively
engaged in rural development
since 1976
RURAL DISTRIBUTION MODEL OF HUL
PRICING AND PACKAGING
 Rural consumers are price sensitive
 Sachets and small packs of premium products.
 Price doesn’t exceed Rs.5 per sachet.
 Lux at Rs.5,
 Lifebuoy at Rs.2,
 Surf Excel sachet at Rs.1.50,
 Pond's Talc at Rs.5,
 Pepsodent toothpaste at Rs. 5,
 Fair & Lovely Skin Cream at Rs.5,
 Pond's Cold Cream at Rs.5,
 Brooke Bond Taaza tea at Rs.5.
PROJECT SHAKTI
“A BUSINESS INITIATIVE WITH SOCIAL
BENEFITS”
PROJECT SHAKTI
 Project Shakti was launched in the year
2001 in the Nalgonda district situated in
Andhra Pradesh
 OBJECTIVE : To create income-generating
capabilities for underprivileged rural
women, by providing a sustainable micro
enterprise opportunity, and to improve
rural living standards through health and
hygiene awareness.
 4,00,000 VILLAGES
HOW IT WORKS
 Villages with a population of about 2000–3000
are selected
 Personnel from HUL approach SHGs
 Selection of the Shakti Amma
 HUL vouches for Shakti Ammas with banks for
credit
 one Shakti entrepreneur
is appointed for one village &

Villages that are about 2 kilometres
apart from her village
(satellite villages ).
FUTURE ASPECT
 There is huge potential and definitely there
is lot of money in rural India
 Better strategic attention to these unique
demands will assure greater chances of
product's success in the rural market.
Thank you

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TAPPING INDIAN RURAL MARKET

 Most companies in the FMCG and agri-input sector

PHASE 2(mid 1960s to mid 1990s)

PHASE 4(around 2015)

The decision making process

 The customer should think that they can buy the

 They should feel that the product is designed as per

 They should think that the product gives some value to

 The customer should feel the comfort with the product

 Affordability here does not mean that cheaper products should

 The designing of the product should match the needs of the

 The income earned in rural markets is from different ways , so

Traditional Channel Members:

Tata Tea’s “Gaon Chalo”

These have the following facilities:

N ON -PERS ON AL MEDI A PERS ON ALIZED MEDIA

MASS MEDIA ATMOSPHERICS

 Attract channel members and motivate them

Urban markets Rural marketing

Pull strategy initiative:

 Rural Innovations Network (RIN):

 HUL linked the company’s core

is appointed for one village &

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