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    Module-I: Concepts, Opportunities & Approaches

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    Sugandha
    Rural markets present significant opportunities but also challenges for companies due to their large size and heterogeneity. Key factors include diverse cultures, languages, and incomes across India's many villages. Successful rural marketing requires understanding affordability, awareness, availability and acceptability for rural consumers. Distribution is challenging due to infrastructure gaps but can utilize periodic village markets, satellite towns, and local warehouses. Companies must tailor their approach, packaging, pricing and promotion to the socioeconomic and cultural realities of rural life.

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    Module-I: Concepts, Opportunities & Approaches

    Uploaded by

    Sugandha
    33 views20 pages
    Rural markets present significant opportunities but also challenges for companies due to their large size and heterogeneity. Key factors include diverse cultures, languages, and incomes across India's many villages. Successful rural marketing requires understanding affordability, awareness, availability and acceptability for rural consumers. Distribution is challenging due to infrastructure gaps but can utilize periodic village markets, satellite towns, and local warehouses. Companies must tailor their approach, packaging, pricing and promotion to the socioeconomic and cultural realities of rural life.

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    RM Module- 1

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    Rural markets present significant opportunities but also challenges for companies due to their large size and heterogeneity. Key factors include diverse cultures, languages, and incomes across India's many villages. Successful rural marketing requires understanding affordability, awareness, availability and acceptability for rural consumers. Distribution is challenging due to infrastructure gaps but can utilize periodic village markets, satellite towns, and local warehouses. Companies must tailor their approach, packaging, pricing and promotion to the socioeconomic and cultural realities of rural life.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    33 views20 pages

    Module-I: Concepts, Opportunities & Approaches

    Uploaded by

    Sugandha
    Rural markets present significant opportunities but also challenges for companies due to their large size and heterogeneity. Key factors include diverse cultures, languages, and incomes across India's many villages. Successful rural marketing requires understanding affordability, awareness, availability and acceptability for rural consumers. Distribution is challenging due to infrastructure gaps but can utilize periodic village markets, satellite towns, and local warehouses. Companies must tailor their approach, packaging, pricing and promotion to the socioeconomic and cultural realities of rural life.

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    Module- I

    Concepts, opportunities & Approaches


    What is Rural?
    A group of people who are traditionalists in outlook staying at
    countryside, rooted in land and who resist change.

    Most companies define rural as a place with a population upto


    20,000r
    Culture, language, religion, caste, customs and other imp variables
    are considered in profiling a rural consumer. They have a lot of
    inhibitions & tend to be rigid in their behavior and hence companies
    have to take intense care while targeting them.
     Taxonomy of Rural Market
    Consumer Market : Main constituent are individuals and Households for
    consumable products & durables
    Industrial Market: Main constituents are Agri & allied activities ,poultry,
    fishery health, cottage industry etc
    Service Market : Main constituents Offices , service providing
    individuals, production firms. Micro financing banking etc..
     Go Rural Decision- Divided in three major categories
    Urban Push Factors-
    Saturation stage
    Competition
    Changing lifestyle
    Rural Pull Factors
    Rising Affordability
    Growing acceptance- literacy,lifestyle,income,shift in decision making,upgrading of
    purchases,accessibility.
    Increasing availability needs
    Improving Accessibility
    Success stories of Corporation –HUL,HERO HONDA, ITC etc.
    Rural Inhibiting Factors
    Uneven Development
    Fragmented Market-population density issue
    Diversity in Occupations
    Heterogeneity in Lifestyles
    Low Income streams
    Lack of steady and sustainable consumption
    Limited Awareness and education
    Failure of some companies
    Intensifying competition etc. at 3 levels- foreign & national brands, regional
    & fake products..
    Concept and scope of Rural Marketing
    Rural marketing has been defined as the process of developing, pricing,
    promoting, distributing rural specific goods and service leading to
    exchange between urban rural markets, which satisfies consumer demand
    and also achieve organizational objective.
     According to the National commission on agriculture ‘Rural marketing’ is
    a process which starts with a decision to produce a saleable farm
    commodity and it involves all the aspects of market structure or
    system.
    Both functional and institutional, based on technical and economical
    consideration and include pre and post harvest operation, assembling
    grading storage transportation and distribution.
    Scope of rural marketing

     The growth rate of FMCG market is high in rural areas.The rural market share is more than
    50% for products like cooking oil etc than in urban area.
     Agriculture consultancy
     Rural customers require proper consultancy service about the best method,, timings and
    seasons, tool, prices and best markets for selling their farming products.
     Banking , microfinance and loan facilities.
    The rural market has huge potential for banking service for providing following facilities at
    affordable price.
    • Agricultural loan
    • Educational loan
    • Housing loans
    • Saving accounts and safe deposits
    • Automobile loans
    • Personal loans
    Scope of rural marketing
     Healthcare
    The availability and location of these service is of great concern as most of
    the areas either do most have any or many rural and remote areas needs to be
    dependent on every distantly located hospitals.
     Telecom service.
    The government’s policies for reduce tariffs, call rates, lesser mobile handset
    price and private participation involvement has helped in increasing the
    level of competition, continuous improvement technology and thus has
    resulted in the growth rural telecom market
    Scope of rural marketing
     Automobile service
    There has been a huge increase in the number of two wheeler, four wheeler
    and agriculture tools and vehicles in past few decades because of reduction
    in price and government support to the rural population. This has given rise
    to a new business for providing maintenance and repair service to rural
    consumers.
     Low cost Hotels.
    Due to increased mobilization because of business and personal needs, there
    is also increased demand for hotel and lodging service to the travelers.
    Nature and characteristic of rural marketing
     Large and scattered market
    Consists of approximately 75 crore rural consumers who live in
    approximately 638365 villages spreads over 32 lakh square km area. Such a
    large and widely scattered geographical market, raises the inventory and
    transportation costs.
     Heterogeneous market
    As many as 20000 ethnic group are present in rural India. There are
    languages are 1624 dialect varies every 100 km, making it extremely
    difficult to develop a uniform promotion message. Division based on caste,
    community and other factors also continue to exist.
    Nature and characteristics of rural marketing
     Income from agriculture
    Nearly 55% f rural income comes from the agriculture prosperity to a great extent.
     Standard of living
    Over 70% of the rural population is employed in small scale agricultural and related
    occupations. This dependence on agriculture and natural factors has led to an acute
    seasonality and high chance element in income receipts in rural areas.
     Infrastructure facilities
    Roads, warehouse, communication system and financial facilities are inadequate in
    rural areas. Road do not connect nearly 50% village in the electricity as a main
    sources of lighting but 46% still use kerosene for lighting
    4 A’s of Rural Marketing
    Affordability
    Awareness
    Availability
    Accepatability
    Approach Decision: Rural Marketing Models
    Trickle Down Approach- Focuses mainly on Urban area for sales than
    Rural market, main intention is to build its own image by tactics like CSR
    etc.( Dabur,Appollo etc)
    Undifferentiated Approach- Companies believed to reach Rural Market
    with the same Urban market strategies with minor modifications to suit the
    rural market.Eg, ITC, HUL etc
    Differentiated Approach
    Bottom of the Pyramid Approach-
    Rural distribution
    One of the ways would be using company delivery mass, which can serve
    two purposes – it can take the products to the customers in every hook 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 large manufactures can adopt this channel. The
    companies with relatively fewer resources can go in for the syndicated
    distribution where a tie-up between non-competitive marketers can be
    established to facilitate distribution.
    Rural distribution continue….

     Organizing a suitable back-hual method for distribution vehicles may prove to be an


    economic to transport the “urban goods” like soap, detergent, oil, cream, shampoo,
    tooth paste, and other daily necessary items for the rural consumers and in the return
    journey, the energy verticals will transport the fruit and vegetables etc. from rural
    areas to the nearest towns and cities for distribution among the urban consumers.
     But this needs a well coordinated “VMS” distribution strategy in which the
    manufacturer, distributor/relation and the customers jointly make a strong
    distribution chain. Annual “melas” and “fairs” organized are quite popular and
    provide a very good platform for distribution because profit visits them to make
    several purchases.
    Rural distribution continue…
    Rural markets have the practice of fixing specific days in a week as
    weekly market days, i.e., “Haats” when exchange of goods and services
    are carried out. This is another potential low cost distribution channel
    available for the marketers.
    Also, every region consisting of several villages is generally served by one
    satellite town, formed as “Mandi” or Agri-markets where people prefer to
    go and buy from their commodities. The marketers using their feeder town
    will be able to cover a large section of rural population.
    Rural distribution continue…..
    The other distribution strategies for the rural population are as under
     Marketers may arrange more number of ware-houses for storage and re-
    packaging into smaller pouches for which employing local villages will
    work profitable and popular.

     All communication in the rural areas must be in the regional language and
    dialects.

     Markets need to develop innovative packaging technology which would


    be economic, protective and improve shelf-life of goods.
    Factor effecting rural marketing
    Socio culture factor
     Culture is the combination of factors like religion, language, education
    and upbringing. Accurate information on the consumption habits, lifestyle
    and buying behavior of the rural people can be obtained through a survey
    of the socio-cultural environment.

     Cultural shifts carry the marketing opportunity as well as threats and also
    carry the cultural dynamics, the needs and feelings of rural people which
    need to be understood.
    Factor effecting rural markets continue…
     Social class is one of the main concepts in socio-cultural environment. A
    society consists of different social classes and all social classes are
    determined by income, occupation, literacy level etc. of its members. Each
    class has its own class values according to lifestyle, behavior etc. These
    values have a strong consumption pattern and paying behavior of the
    member of the class
     Economic factor
    The entire economic environment of rural India shows a much improved
    prosperity due to repeated benevolent monsoons, new and improved
    techniques, higher quality of inputs and increasing awareness and education
    on agriculture.
    Factor effecting rural markets continue…
     Banking is reaching out to the doorstep of more and more farmers.
    Finance is now more readily available and so is credit.
    Demographic factors
     Occupation and income
     In the rural sector, a range of goods and services beyond the very basic
    ones are bought by a consumer, influenced by the occupation and income
    of the individual. Fishmen buy a boat large nets, whereas a farmer opts
    first for a tractor and pump set.

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