Execution : rural markets

What is Rural?
 Defining Rural Govt. Lens
Census Any habitation with a population density of
less than 400 per sq. km. with at least 75% of the
male working population is engaged in agriculture;
and where there is no municipality or board.

RBI Population upto 10,000; irrespective of village

or town.

Planning Commission Any place with a population

less than or equal to 15,000.
 Rural the traditional view

Not urban (population > 5,000, a population density

above 400 per square kilometer, all statutory towns,
i.e. Places with a municipal corporation, municipal
board, cantonment board, notified area council, etc.
and with 75% of the male working population
engaged in non-agricultural employment)

Deprivation mindset
 Rural the new view
Rural in nature
Notified as towns/ taluka centres due to economic
growth/ presence of municipal corporation
But retain their rural character

Marketers today define rural as people living a

different lifestyle as opposed to that of those
who have settled in the bigger towns.

However may aspire to the town lifestyle.

The Basic Rural Structure
District

Tehsil

Block

Gram Panchayat

Village
 The Education System
District Primary/ Secondary/ SSC Graduation/
PG/ Advanced Studies

Tehsil Primary/ Secondary/ SSC/ Graduation/ PG

Block Primary/ Secondary

Gram Panchayat Primary/ Secondary

Village Primary School

 The Health System
District District Hospital

Community Health Center/

Tehsil
Private Practitioners

Block Referral Hospital (15 Bed)

Gram Panchayat Primary Health Center

Village Health Workers/ Quacks

 The Retail System
C& F Agent

Wholesaler Distributor (RS/ RD)

Retailer Alternate channels

Consumer
 The Agricultural System
District/ Tehsil District Mandi Tehsil Mandi

Block Brokers/ Artiyas

Village Small Farmer Big Farmer

 The Postal System
District General Post Office

Tehsil Collection Post Office

Block Post Office

Retainers (private persons carrying the post

Village
to block/ tehsil PO)
 Demographics
Growing ~ 70% of AI population
Joint family giving way to nuclear/ individualized joint
families 30% HH headed by women
70% of population below 34 years 35% cons class
20% of population has done SSC/HSC
Dependence upon agriculture reducing 44% HH not
agri dependent
Fragmented land ownership 1.9 ha
 Physical characteristics
Abadi + Kheti
As per kinship, caste, religious groups
Population % (1991) % (2001)
< 500 42 38
500-2000 45 45
2000+ 13 16 50% rural pop
and 60% rural
wealth

62% pucca homes

 Socio-cultural characteristics
Strong village community including elected
panchayat members with developmental and
regulatory functions.
Emergence of new KOF: teachers, health care
workers, retired military personnel.
Caste system exists but weakened.
 Technological characteristics
Mechanization replacing manual and animal
labour
Mechanization increasing productivity
Information and communication technology
improving access to information
45% of registered micro and SME ; 60% of
unregistered ones
Why rural specially?
 Globally
40% of global markets are rural in nature

3 Bn rural consumers

Current consumption ~ $4 Trillion p.a.

 In India

1.2Bn

3800 Towns 6,50,000 Villages

2 Mn outlets 4 Mn outlets
28% population 72% population
 A big market
Market est. to be Rs. 2 lac Cr.
Accounts for >50% of FMCG and Consumer durable
sales
Higher % disposable income vs. urban dwellers
50% + vs. 35% on H &F ; taxation .
A predominantly young rural India (~60% below 35
years)
Actively seeking to improve their lot in life
Ready to experiment.
Move from necessity to gratification
 About to become bigger
Rural India contributes to
56% Indias income
64% expenditure
33% savings
2010 Per capita income p.d. 2020

50 5+ USD 150

350 1-5 USD 500

400 Less than 1 USD 250

Rural popu: 800 Mn Rural popu: 900 Mn

 About to become bigger
72% of the Rural population contributes to 30% of Indias GDP
However, this will turn around and by 2025 Rural India will contribute to
60+% to Indias GDP

Bulk of Indian population Rural is low on GDP

is Rural contribution but is set to
explode
69%
70%
63%

31% 37%
30%

201 202 201 202

0 5 0 5

Rural Urban Rural Urban

Contributes ~ 40% to FMCG markets
Pentration Consumption
Urban Rural Urban Rural
% kg/HH
WASHING POWDER 97.9 98.3 13.0 10.4
DETERGENT BARS 90.0 75.0 12.9 8.6
TOILET SOAP 98.8 98.8 5.5 2.9
SHAMPOOS 85.9 87.5 0.9 0.5
TOOTH PASTE 85.2 86.7 1.4 0.7
TALCUM POWDER 34 36.9 0.3 0.2
SKIN CREAMS/ANTI.LIQ./CR 76.3 76.9 0.3 0.1
FACE CARE(FC) - NEW 71.4 72.2 0.2 0.1
TEA 95.3 96.1 4.3 2.7

Penetration across categories similar in Urban v/s Rural while

consumption still almost half in most of the categories.
 Yet, traditionally neglected
Unbranded local competitors : word of mouth,
tactical pricing,

Low density of rural population

Self produce/ barter (sp. FMCG and financial

services)

Lack of modern infrastructure roads, electricity,

banks, media vehicles.
But now, the new growth driver
Relevance of execution in a digital world
 What is Digital Marketing?

Building awareness and promoting a brand online using all available digital
channels

Non-Internet digital channels Television, Radio, SMS, digital billboards (indoor and outdoor)

Internet Marketing Web, SEM, SEO, smartphones, mobile markets (i.e. Google Play, Apple Store),
email marketing, online banner advertising and Social Media (SMAC MARKETING)
Digital marketing = Social media marketing
 Principles of Digital Marketing

Simple creative message

Engaging

Consistent branding
Relevant to the medium
The world of SMAC : Social, Mobile, Analytical, Cloud
 SMAC

Social Mobile Analytics Cloud

An ecosystem vs. the technology

Synergy created >> Sum of the parts
 Social

1. 5 Bn

1 Bn

820 Mn

400 Mn
Story teller/ Entertaining/ Informative/ Engaging
Social
 Social
What does it mean for brands?
 Social
Always Available

Pleasant user experience

Consumer Technology Fit of content to

Insights limitations platform

MR based data & learnings

Consumer journey on social usually starts with a search for a solution

Social
 Social
Always ready: Sentiment Analysis, ORM

TEMPLATE?
By 2019 5
Bn mobile 48% of device Mobile connectivity
screen time is
users ~ 70% on mobile
of global platforms
pop.
Mobile functionality smartphone /
5x more video feature phone handset penetration
80% of FB
will be
and Twitter
consumed on
usage is on
mobile than
mobile
desktop by
devices
2017
Kind of content: Rich media/ standard
media
2015
Mobile Mobile is at
the heart of
search > media
desktop consumption
search