RE: Emerging Trends in Rural Marketing
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Rural Marketing involves delivering manufactured or processed inputs or services to rural producers or consumers
Attractiveness of the Rural market
Untapped rural potential : 6,27,000 villages across the
country , account for 70% of population
60% of National demand for various product categories
Expansion of middle income household
According to 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 'lower middle income'
households in rural areas as in the urban areas
Improvement in Infrastructure
In 50 years, 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
Low penetration rate
Low penetration rates in rural areas, so many marketing opportunities
Defining Rural India
Defining Rural Marketing
Transitions In Rural India
Rural Market Is a Homogeneous Mass
Disposable Income Is Low
Individuals Decide About Purchases
Why go Rural?
Proliferation of brands in urban
High saturation levels in urban
Greater awareness of brands in rural
Ever-growing aspirations in rural
No effects of slow down on rural markets
Challenges and Strategies
India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas .
HUL: to serve remote villages, use autos , bullock-carts and even boats in the backwaters of Kerala
Coca Cola distribution network
Challenge: to provide at cheaper price
Strategies: Introduce small unit packs.
Godrej introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh
Coca-Cola has addressed the affordability issue by
introducing the returnable 200-ml glass bottle priced at Rs 5.
HUL launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm
Challenge: to gain acceptability for the product or
Strategies: Offer products or services that suit the rural market
Easy to understand
Because of the lack of electricity & refrigerators, Coca- Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets.
HDFC tied up with NGOs and offered reasonably-priced policies in the nature of group insurance covers
Challenge: less exposure to the world, low literacy rate
Opinion leaders play a key role in popularizing products
and influencing buying
Can use the following promotional methods
Events-Using Culture to touch a chord, magic show, melas
Building Brands in Rural India
Contrary to popular belief people in Rural India are fiercely brand loyal
Single Brand Villages
Once converted, difficult to dislodge them
First mover advantages
ITC is one of India's foremost private sector companies diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Branded Apparel,Greeting Cards and other FMCG products.
Its International Business Division (ITC IBD) was created in 1990 as an agricultural trading company
In 1998, after competition forced , ITC-IBD taken the challenges to use information technology to change the rules of the game and create a competitive business.
Information Technology : Places computers with
Internet access in rural farming villages
Each e-Choupal costs between US $3,000 and US $6,000 to set up and about US $100 per year to maintain
The farmers use the computer to access daily closing
prices on local mandis
The farmers can also know about weather forecast
(local) and best practices in the world from e-Choupal
Order seeds, fertilizers, and other product. sAt harvest time, ITC offers to buy the crop directly from any farmer
Pitfalls of Building a Brand in Rural India
Merely stripping down all the ‘so-called’ frills from the product currently being sold in urban
Just extending the brand name to low cost packs, thus making it cheaper for rural.
Merely modifying the packaging marginally. Eg: add the brand name in Vernacular languages, use cheaper packing material…
Adapt the urban advertising by dubbing the film in the local language, translate the print material…
Offer meaningless sales promotion giveaways eg. Combs, spoons, tumblers, etc. FREE
Route to Brand Building in Rural
Chotukool from Godrej Boyce, a nano refrigerator (43 litres cool box loaded from top)
Co-created using suggestions from rural women and sold by rural women
Build Empathy / Relevance
Nokia ‘Life Tools’ for farming and rural community
Agri information to farmers in association with Reuters
Imparting of knowledge of English language to students by teaching one new word every day
Rural folks understands symbols and colours better.
‘Pahelwan’ Chap – MRF, ‘Haathi’ – Beedi
‘Laal Sabun’ – Lifebuoy, Peela Powder - Nirma
Distribution in rural India is not a nightmare
For FMCG reach villages (feeder markets) in towns with population 10000 to 15000
For consumer durables reach towns with population of 50000+ and also
Look at opportunities in haats, melas, post offices, public distribution system etc.
Build word of mouth
Through effective communication using specific communication package aimed at specific rural audience
Importance of opinion leaders
Educated village youth as opinion leaders
Women and children as demand generators
Customized events targeting specific groups with focused communication
Ideal Media Strategy for Reaching Rural Audiences
Characteristics of the Rural Masses
Very intelligent and clever – cannot be easily fooled
Daily activity is routinised
Plenty of time / No Sundays
Very conscious of value for money
Does not like to pay extra for frills they cannot use.
High involvement in any product purchased
Perceptions, traditions, values vary from state to state and in some cases from region to region within a state.(MRF Bullock Cart Tyres)
Divisions based on caste, community and other hierarchical factors continue to exist.
Keep the communication simple…
No scope for gimmicks
Take time in communicating the message
Quickies have no impact.
Think in the local language to capture the local spirit in the communication aimed at specific region.
Television does not distinguish between urban and rural
A common TVC for both urban and rural audience particularly for FMCG products… provided your communication is not gimmicky, suggestive and is easy to comprehend.
But when it comes to Durables, where rational decisions are involved, it is advisable to target the opinion leaders first.
While urban oriented TVC may register with opinion leaders and help create awareness, for real impact down the line, a region specific and need specific communication programme has to be devised which provides for demonstration and touch & feel of the products.
Examples of rural marketing
ICICI BANK customized their rural ATMs, so they can operate biometric authentication. ICICI rural ATMS are battery operated so that power failure is not issue.
Bank of India introduced Bhumiheen credit cards for providing credit card facilities to landless farmers.
Examples of rural marketing
Noika develop affordable Mobile phones for rural markets with unique features such as local language capabilities, present time/ call limits etc.
Philip develop a TV ‘ Vardaan’ for rural markets. This TV work on the voltage 90-270 volts.
Philips developed ‘ Free Power radio’ this radio do not require power and battery also. it run on simple winding of level provided in the set. The price of this attractive set is Rs. 995.