Rural Marketing

Prof. Arijit Bhattacharya

 Rural Marketing Myths
Myth 1: Rural India is homogeneous
Myth 2: The rural consumer is a simpleton
Myth 3: Traditional influencers solely
determine and drive village actions
 Examples
1. Project Shakti
1. Smartphone with software for billing, managing inventory,
updates
2. Idea Cellular MPC Har Mobile par Internet
2. Digital literacy
3. Volkswagen Rayalseema AP
3. Facebook page tagging
4. Greenlight Planet- solar lamps Bihar
4. WOM using AIR, mobile for lead generation
5. Dabur Project Double
5. Rural reach, mapping demography for market potential
6. United Villages
6. Mobile based distributor of rural products and services (Jaipur)
7. Kisan Raja
7. GSM based controller of irrigation pumps
8. Online Marketplace
BoP Marketing
 Rural Population Statistics

Population No. of Villages % Total villages

Less than 200 114267 17.9

200-499 155123 24.3
500-999 159400 25
1000-1999 125758 19.7
2000-4999 69135 10.8
5000-9999 11618 1.8
10000&above 3064 0.5
Total 636365 100

Source: Census 2001

 Rural Marketing
Marketing of both
Agricultural produce
Inputs for production.
Two-way marketing process:
Inflow of products into rural areas for
production/consumption
Outflow of products to urban areas
 Flow of Goods/Services
Urban Rural
Consumable and durable agricultural inputs
Consumables
Consumer durables
Rural Rural
Rural artisans services and products
Rural Urban
Agricultural and allied production
Rural artisans and rural industry products
 Population

~69% of Indians reside in rural areas

6,36,000 villages
Only 13% villages have population above 2000
 Occupation Pattern
Rural population: 77% solely depend on land
for living and land is the main source of their
income.
Own/lease land to cultivate (50%)
Agricultural laborers (27%)
 Income Generation
75% of income generated in rural areas is from
Agriculture (59%)
Agriculture-related activities (16%)
 Rural vs. Urban Customers
Demand pattern
Customer spread
Per capita income
Literacy level
Awareness level
Source of information
Guidance on usage
After-sales service
Hierarchy of Markets for Rural Customers

Village shop
Weekly shandy/haat, Jathra, Mela
47,000 shandies and 25,000 melas in India every
year
Terminal market/Mandi towns
State capitals, Metroes, Cities
 Problem Areas
Underdeveloped people, market
Lack of proper physical communication facilities
Media for rural communication (TV, radio, cinema,
VoW)
Multiplicity of languages and dialects
Vastness and uneven speed of villages
Low per capita incomes
30% of Indian GDP is generated by 72% of
population
 Problem Areas contd.
Challenges of logistics, storage, handling and
transport (bullock cart, camel, boat)
Product positioning
Hierarchy of markets
Low levels of literacy (print media ineffective)
Seasonal demand (Kharif and Rabi seasons)
 Marketing of Agricultural Inputs
Consumable inputs
Fertilizers
pesticides
Agro chemicals
Seeds
Cattle/poultry/aqua feeds
Veterinary medicines

Durable inputs
Tractors
Farm animals
Pump sets
Irrigation equipments
 Growth of Rural Market
Increase in agricultural productivity.
Increase of rural development programme.
Improved infrastructure facilities.
Expansion of rural retail network.
Expansion of TV, cable TV, channels.
Changing life style.
Revolution in packaging.
 Rural Products

Paisa pack of team 25 paise (two cups of tea)

5 gm Vicks Vaporub tin
75 gm Lifebuoy soap
25 gm Colgate powder Rs 3
Small packets of Nirma
Shampoo sachet Re1
Low priced cigarette HERO to upgrade bidi smokers
Cough syrups in sachets
Vicks singles cough drops
 Imitation Products
Run
Nilima
Lifejoy, Liteboy
College toothpaste
Friends and Lovely Fairness Cream
Choudharys Eclairs
509 Bar
 Product
Colgate ke chota packet
Chota Coke
PVC shoes
TVS Suzuki AX-100 R
Philips radio, two-in-one
Rajdoot (North)
Royal Enfield Bullet (South)
Low horsepower mopeds
 Price
Rural per capita income
Low unit cost
Cheaper blend of tobacco
Redesigned/modified product
Mixing chicory and tapioca flour in tea
Stage of PLC in urban market
 Distribution
ITC e-choupal
Hindustan Lever
Operation Harvest (>2000 people villages)
Operation Bharat (>1000 people villages)
Project Shakti (<1000 people villages)
 Promotion
Television
Highest reach
Low ownership
Giant cutouts
Message on Moving Objects
Wall paintings
Generic Promotio n
Rural van
Video Express, Video On Wheels
Awareness programmes
TOMEE (Tractor Owners Meet)
POP (posters, danglers)
Folk Media (Nautanki, Tamasha, Puppet show )
AMUL - Famous Cooperative Model

FEDERATION (State)

UNION (District)

DCS (Village)

Farmers
 Rural Credit Institutions
National Bank for Agriculture and Rural Development
(NABARD)
Commercial banks (nationalised and private)
State Cooperative Banks (SCBs)
State Cooperative Agricultural and Rural
Development Banks (SCARDBs)
Regional Rural Banks (RRBs)/Grameen Banks
Local Area Banks
 Distribution of Villages
Population No. of Villages % of Villages/% of
Population
Less than 200 96,855 15.7/1.2

200-500 1,36,454 21.4/5.9

501-1,000 1,56,737 24.6/14.5

1,001-2,000 1,40,751 22.0/25.9

2,001-5,000 87,206 13.7/37.5

5,001-10,000 20,363 3.2/15.0

Source: Census of India 2001

 Rural Market Segmentation
Landholding pattern
Irrigation facilities
Progressiveness
Cropping pattern
Education levels
Proximity to city/town
Sociological factors (landlord/small farmer,
caste)
occupation
 Product Strategies

Small unit packaging

Low priced packaging
New product designs
Sturdy products
Utility-oriented products
Brand name
 Pricing Strategies

Low cost/cheap products

Avoid sophisticated packing
Refill packs/reusable packaging
Value engineering
 Distribution Strategies

Coverage based on population strata

Cooperative societies
Public Distribution System
Petrol pumps as distribution centres
Distribution up to feeder markets/mandi towns
Shandies/haats
Jathras/melas
Agricultural input dealers
 Promotion Strategies

Mass media
TV, cinema, radio, print
Hoardings/wall paintings
Shandies/haats/jathras/melas
Non-price competition
Special campaigns
Other mass media
Personal selling, opinion leaders
Nokia
Chota Coke
Rural Distribution
ITC e-Choupal