Rural Marketing Mix Strategies PDF

Rural Marketing Mix Strategies
A Project as a Course requirement for
Master of Business Administration
Tadakamalla Rangasai
17477
Department of Management and Commerce

Prashanti Nilayam Campus
December 2018
A HUMBLE OFFERING…
DEPARTMENT OF MANAGEMENT AND COMMERCE
SRI SATHYA SAI INSTITUTE OF HIGHER LEARNING
(Deemed to be University)
PRASANTHI NILAYAM CAMPUS, PRASANTHI NILAYAM – 515 134
Anantapur District, Andhra Pradesh, India
CERTIFICATE
This is to certify that this Project titled “Rural Marketing Mix Strategies”
submitted by T. Rangasai, Regd. No. 17477, Department of Management
and Commerce, Prasanthi Nilayam is a bonafide record of the original
work done under my supervision as a Course requirement for the Degree
of Master of Business Administration.
……………………….. ……………………..
Prof. Viveck Kapoor Dr. N. Siva Kumar
Project Supervisor Head of the Department
Place: Prasanthi Nilayam
Date: 20th December, 2018

DECLARATION
The Project / Dissertation titled “Rural Marketing Mix Strategies” was

carried out by me under the supervision of Prof. Viveck Kapoor,
Department of Management and Commerce, as a Course requirement for
the Degree of Master of Business Administration and has not formed the
basis for the award of any degree, diploma or any other such title by this
or any other University.
…………………………..
Place:
Prashanti Nilayam Tadakamalla Rangasai
17477
II MBA
Date:
December 20, 2018
ACKNOWLEDGEMENT
At the very outset, I would like to offer my gratitude to my beloved lord Bhagwan Sri Sathya
Sai Baba, without whose grace this endeavour would not have been successful.
I am forever grateful to my parents who have shaped my life at every step. My heartfelt
gratitude to Prof. Viveck Kapoor for guiding me in this project all throughout with a lot of
enthusiasm and making this journey an exciting one. Without his insights and faith in me this
project would not have been possible.
It is my duty to thank all the research scholars of the department who helped me in various
ways in completing this project.
I take this opportunity to thank Dr. N. SivaKumar, Head of Department, Department of

Management and Commerce and the institute for providing us with required support and
guidance, especially with respect to permissions required for usage of computer facilities.
I also extend my gratitude to Mr. Ganesh for facilitating the printing solutions for all the
students and enthusiastically putting a lot of work to get the printed versions ready.
I would like to thank all my classmates and roommates especially Vinod, Rinil &
Jagadeeshwara for all the love and support.
Rangasai
TABLE OF CONTENTS
1 INTRODUCTION ........................................................................................................ 3
2 THEORETICAL BACKGROUND ........................................................................... 11
2.1 Rural areas ................................................................................................................ 11
2.2 4P’s of marketing ..................................................................................................... 11
2.3 4A’s of marketing..................................................................................................... 11
3 LITERATURE REVIEW ........................................................................................... 15
3.1 Rural Consumer Behaviour ..................................................................................... 15
3.1.1 Profile of Rural customer .................................................................................. 15
3.1.2 Characteristics of Rural Customer ..................................................................... 16
3.1.3 Changing Rural Customer ................................................................................. 16
3.2 Issues and challenges of rural markets .................................................................. 18
3.2.1 Reaching rural customers .................................................................................. 18
3.2.2 Acquiring rural customers ................................................................................. 18
3.3.3 Retaining rural customers .................................................................................. 19
3.3 Strategies for Rural markets ................................................................................... 21
3.3.1 Mastering the rural customer reach ................................................................... 21
3.3.2 Mastering rural customer acquisition ................................................................ 21
3.3.3 Mastering rural customer retention.................................................................... 22
4 METHODOLOGY ..................................................................................................... 27
4.1 Nature of the study ............................................................................................... 27
4.2 Research objectives .............................................................................................. 27
4.3 Scope of the study................................................................................................. 27
4.4 Limitations of the study ....................................................................................... 28
5 ANALYSIS AND INTERPRETATION .................................................................... 31

5.1 Acceptability ........................................................................................................... 31
5.2 Affordability ............................................................................................................ 39
5.3 Awareness ............................................................................................................... 49
5.4 Accessibility ............................................................................................................ 62
6.4 Sector wise importance ........................................................................................... 71
6 CONCLUSION .......................................................................................................... 75
6.1 Summary ............................................................................................................. 75
6.2 Future Scope........................................................................................................... 76
7 BIBLIOGRAPHY ...................................................................................................... 79
TABLE OF FIGURES
Figure 1 Rural FMCG market ................................................................................................... 3

Figure 2 FMCG sales ................................................................................................................ 4
Figure 3 Two wheelers zonal share ........................................................................................... 5
Figure 4 Telephone subscriptions.............................................................................................. 6
Figure 5 Indian internet population .......................................................................................... 7
Figure 6 challenges to Acceptability ....................................................................................... 32
Figure 7 Godrej Chotukool ...................................................................................................... 36
Figure 8 Impact of urbanisation on rural behaviour .............................................................. 38
Figure 9 NABARD report on financial inclusion .................................................................... 41
Figure 10 Conventional value chain........................................................................................ 45
Figure 11 E-choupal, new business model .............................................................................. 46
Figure 12 e-choupal coverage ................................................................................................. 47
Figure 13 factors influencing the selection of target markets ................................................. 48
Figure 14 Market wise TV penetration .................................................................................... 51
Figure 15 video on wheels campaign ...................................................................................... 57
Figure 16 WhatsApp users in rural and urban India .............................................................. 58
Figure 17 Shift of influencers .................................................................................................. 59
Figure 18 Components of Accessibility ................................................................................... 63
Figure 19 Challenges to acceptability ..................................................................................... 64
Figure 20 Overcoming challenges to Availability ................................................................... 65
Figure 21 Hub and spoke model .............................................................................................. 66
Figure 22 Overcoming challenge of non-availability of channel partners ............................ 67
Figure 23 sector wise importance............................................................................................ 71
Figure 24 Strategies for 4A's of marketing in rural areas...................................................... 76
ABSTRACT
“ To get rich, sell to poor”, says Pradeep Kashyap. Rural areas are no doubt the future
battlegrounds in India. The huge population and rising disposable income of rural India along
with the satiety that urban market is confronting adds to the allurement of rural markets.
However, these promising and enticing rural markets posit various challenges that act as
hindrances to the success of companies.
Customer centricity is key to overcome these challenges in rural areas. The 4A framework is
considered to be one of the most customer-centric approaches in marketing. The purpose of
the study is to use the 4A framework to identify various challenges and propose strategies to
overcome these challenges in rural markets.
This study found that ‘Inclusive marketing' as a strategy can be effective in enhancing both the
Affordability and Accessibility in these rural hinterlands. ‘Value engineering' helps improve
the functional acceptability of an offering by catering to unique needs of value-conscious rural
customer and ‘Edutainment',‘Societal marketing' elevates the Awareness aspect of the 4A's in
rural markets.
In conclusion, a mere replication of urban strategies in the rural markets will not ensure success.
Customer centricity has to be at the heart of strategy for a company to emerge successful in
rural markets.`
Key Words – Value engineering, Societal marketing, Inclusive marketing, Edutainment.

CHAPTER 1
INTRODUCTION
Introduction
1 INTRODUCTION
C.K. Prahalad says, “The future lies with those companies who see the poor as their
customers.”
The Indian rural market with its vast size and diverse demand offers profitable
opportunities to the marketers. According to 2011 census,70% of the total population lives
in rural India in around 630000 villages. Rural markets contribute around 46% of Net
Domestic Product and employ 70% of the total workforce. (Ranjani, 2018).While these
facts validate the lucrative opportunities these rural hinterlands offer on overall nation's
perspective, there is also industry-specific evidence that show the tremendous potential
these rural markets possess.
Rural markets are darlings of the FMCG companies as the rural FMCG market is expected
to increase to $100 billion by 2025. (refer to figure 1)
Figure 1 Rural FMCG market
3
Introduction
According to MART, a rural marketing and rural development agency, 53% of FMCG sales
come from rural markets. The growth in rural consumption of FMCG products stood at
9.7% in the year ended 31 March compared to 8.6% growth in urban spending. (refer to
figure 2) (Agarwal, 2018).
Figure 2 FMCG sales
So it is clearly evident that the success of an FMCG company is dependent on its

performance in rural markets. Consumer Durable industry also has a great growth potential
in rural areas as the rural customers are aspiring to imitate their urban counterparts. The
rural consumer durable market is growing at a CAGR of 25%. Currently, around one-third
of the revenue of consumer durable companies is generated from the rural hinterlands.
(IBEF, 2018).
The Automobile industry is no exception to this scenario, the demand for two-wheelers and
passenger vehicles in rural markets outpaced the urban markets. Figure 3 illustrates the
increasing demand in eastern and northern regions which includes states of Uttar Pradesh,
Bihar, Madhya Pradesh, West Bengal, and Odisha. Typically, rural areas contribute more
4
Introduction
population to these zones than urban ones. The southern areas which have the larger urban
mix in the population are seen lagging in growth. (kamat, 2018).
Indian automobile Companies are anticipating robust revenues from rural markets as a
result of favourable monsoon and faster economic growth that are boosting farm incomes.
The demonetisation effect that slowed down the growth of the automobile sector waned
over the past two years as good monsoons and the stable economic growth boosted the
incomes of the rural population.
Figure 3 Two wheelers zonal share
According to the Telecom Regulatory Authority of India, telephone subscriptions have seen
a surge of 7.21% in rural India compared to 0.75% in urban India as on Dec-17. Rural Tele
density also rose at a rate of 6.36% compared to 1.10% of urban areas as on Dec-17. (India,
2017) (refer figure 4)
5
Introduction
Figure 4 Telephone subscriptions
The main reasons behind the major contributions of rural markets to the top and bottom
lines of the companies in various industries are as follows-
1) The stability in the rural household income due to declining dependency on farm
incomes is eliminating the uncertainties in the purchasing capabilities of the rural
population. According to the National Sample Survey Office (NSSO), only 40%
of rural households are depending on farming as their main source of income. This,
in turn, is improving the consumption of rural markets in various industries.
2) The rise of the Minimum Support Prices (MSP's) of 14 crops grown in the kharif
season by the government is increasing the purchasing power of the rural
households. (Broadcast India Research Council, 2018)
3) Increase in the cash flows to agriculture and allied sectors through improved
access to finance and institutional credit is facilitating the contributions of the rural
markets to growth prospects of various industries. (Accenture, 2010)
4) One of the most important reasons behind rural markets outpacing the urban
markets is increasing aspirations of the rural consumer. Rural customers are
emulating the behaviour of their urban counterparts in the lifestyle and
consumption habits fuelled by the rise in their purchasing power. Global research
company McKinsey referred to India as ‘Bird of Gold' and the bird is ready to fly
due to the increasing appetite for better and lifestyle products by rural customers.
(Fareeda & , 2016)
6
Introduction
5) An increase in literacy rate, development in infrastructure, increase in government

spending is boosting the rural economy. The central government is spending as
much as 14.34 lakh crore in rural areas for construction of roads, new houses,
toilets, provide electricity connections…etc. (PTI, 2018)
6) There is a significant rise in internet users in rural India. There are around 163
million internet users in rural India as of December 2016. According to a report
by BCG, half of the internet users will be rural by 2020. (Consultancy.in, 2017)
This will improve the digital literacy of the rural customer and companies can
leverage upon this in by establishing cost-effective communication channels.
(refer figure 5)
Figure 5 Indian internet population
Rural markets are pivotal to the growth of various sectors and companies. They are the
lucrative markets that offer great opportunities for marketers to focus upon.
7
Introduction
A company has to overcome the challenges and difficulties that are associated with these
markets in order to be successful. The fact that only a few companies succeeded irrespective
of a large number of entrants highlight the level of difficulties these rural markets pose. So
the success of a company depends upon the marketing mix strategies it deploys in these
unpredictable rural markets.
8
CHAPTER 2
THEORETICAL BACKGROUND
9
10
Theoretical Background
2 THEORETICAL BACKGROUND
2.1 Rural areas

"The rural is means any place as per the "latest census" which meets the following
criteria:
 A population of less than 5000

 The Density of the population less than 400 per square km and
 More than ‘25% of the male population' is engaged in agricultural
pursuits". (Natinal Portal Content Management Team, 2011)
Rural marketing mix refers to a set of tactics, tools or variables that firm pursues to achieve
its marketing objectives or goals in rural markets. Rural marketing mix can consist of 4P's
or 4A's of the marketing.
2.2 4P’s of marketing
The 4P's of marketing constitute the marketing mix which helps in understanding what a
product or service can offer and in planning for successful product/service offering. The
4P's are namely Price, Product, Place, Promotion.
According to Investopedia, “‘Price’ refers to what consumers pay for buying the product
or service. The price must reflect the perceived value of the product. ‘Product’ refers to
tangible good or that satisfies a particular need or want of customers. ‘Place’ refers to the
where the product is sold and the delivery part of it. The goal of business executives is to
get their products in front of their customers who are most likely to buy them. ’Promotion’
includes advertising, public relations and promotional strategy”.
2.3 4A’s of marketing
“The 4A framework is a tool that helps marketers align their actions with the four essential
values sought by customers. These values can be summarized as:
11
Theoretical Background
Acceptability - The extent to which the firm’s total product offering meets and exceeds
customer expectations. It has two dimensions: functional acceptability and psychological
acceptability.
Affordability - The extent to which customers in the target market are able and willing to
pay the product’s price. It has two dimensions: economic affordability (ability to pay) and
psychological affordability (willingness to pay).
Accessibility - The extent to which customers are able to readily acquire and use the
product. It has two dimensions: availability and convenience.
Awareness – The extent to which customers are informed regarding product characteristics,
persuaded to try it and if applicable, reminded to purchase it. It has two dimensions: brand
awareness and product knowledge.” (Seth & Sisodia, n.d.)
Customer centricity can be defined as the ability of the company to look at every business
action through the lens of the customer. The 4A framework will help companies achieve
this across all business actions. The 4A's of the marketing define requirements for overall
business success rather than only for marketing success. These tools help managers to look
at every business action through the eyes of the customer and also in aligning all aspects of
the organisation around a set of common customer-centred goals. The growing level of
sophisticated modern marketing demands simple and conceptually elegant framework. The
4A's framework with its ability to be applied in any context proves to be a simple and
conceptually strong tool to deal with modern marketing demands. It will be the most
appropriate tool to be used in the heterogeneous and uncertain rural markets. (Seth &
Sisodia, n.d.)
12
Literature Review
CHAPTER 3
LITERATURE REVIEW
13
Literature Review
14
Literature review
3 LITERATURE REVIEW
Research and studies done in this field are being studied and divided into three major
aspects in order to facilitate understanding. The three main divisions are Consumer
behaviour of the rural customer, Issues, and challenges of rural markets, Strategies for rural
markets.
3.1 Rural Consumer Behaviour
3.1.1 Profile of Rural customer
Rural India is embedded in various traditions, customs, and beliefs that have a
profound impact on the psyche of the rural consumer. The whole life of the rural customer
is greatly influenced by the implanted traditions and beliefs of the rural customer. Indian
rural customers are largely illiterate and live in poverty. Local panchayat members, caste
and religious leaders... have considerable influence on the purchasing decision of the
ignorant and illiterate rural customers. Rural customers purchase in small quantities due to
irregularities of the income and don't believe in the concept of blocking money and storing
products. Brand stickiness is not present in the rural customers.
Packaging plays an important role in driving the purchase of the illiterate rural
customer he/she identifies a brand based on the colour and packaging of the product. Brand
awareness of rural customer can be improved by endorsing the products through local stars
and movie celebrities.
The current rural customer has a desire to upgrade the standard of living fuelled by
the rise in the purchasing power. Government schemes like MNREGA and rise in the rural
spending in the budget are helping in increasing the income of the rural population. Cash
inflows from immigrant labour in rural families have led to a demand for lifestyle products
from rural customers. Increase in media exposure and literacy levels is increasing the
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Literature review
demand for lifestyle products in rural markets. ‘Rural yuppies' (males in the age group of
15-34) are helping in increasing the disposable income of the family by moving to urban
areas for employment and are also acting as opinion leaders in influencing the purchase
decisions of their families. (Srivastava, 2010)
3.1.2 Characteristics of Rural Customer
1. The Rural customer is not very educated as compared to an urban customer but
possess a lot of common sense.
2. The Rural customer is ‘value-conscious' and doesn't always go for cheaper products.
They value basic functions of the product and aren't likely to go for fancy features
that don't enhance the functionality of the product.
3. Rural customers don’t trust outsiders easily and are hard to convince.
4. The life of rural customer is highly routinized. There is high involvement in
purchase decision made by the rural customer. Since they are unaware they tend to
ask the village head, local leaders etc. before making any buying decision.
5. The rural customer understands colours better and endorsements by local icons will
appeal to them.
3.1.3 Changing Rural Customer
Rural customers are changing and changing at a rapid phase. This is due to their increasing
appetite for high-quality products triggered by the rise in the purchasing power. The
advancements in technology also incited the change in the purchasing decisions of the rural
customer. Rural customers are changing in three demanding fronts. (Accenture Strategy,
2014).
They are –
 Aspirational
 Networked
 Discerning
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Literature review
Aspirational – The rise in the income levels of the rural customers led to deep-seated
desire to provide their children with bright future through education and health care. They
are also seeking products that improve their convenience and make their lives
comfortable.
The mobile and internet penetration has helped them in understanding the urban lifestyle
and improving their aspirations. This is validated by the fact that there is a rise in the
purchases of the branded products as rural customers see them as trustworthy and high
quality. These aspiring rural customers are trading up in terms of wanting more features,
better design to boost social image etc. They are willing to explore new categories and
new products.
Networked – The traditional rural areas are closely knit communities and purchase
decision is made by the heads of the villages, regional leaders or by the word of mouth.
Even though the current rural areas still contain these traditional influences, rural
customers are better connected to their urban counterparts and seek information through
multiple sources for purchase decision making. The high penetration rates of mobile
telephony and DTH services have further enhanced their connectivity and decision-
making ability. The current rural customers are more proactive than the traditional one in
the purchasing process. They compare prices and product attributes by collecting
information from digital channels which are available as a result of increasing internet
penetration in rural India.
Discerning – The current empowered rural customer is ‘street-smart'. The availability of

information from various sources keeps them one step ahead of the shopkeeper in their
buying decisions. They are no more wavered by the endorsements by celebrities and
fraudulent influences of the shopkeepers. They are more ‘value-conscious' today by
evaluating products on their attributes, design etc. Today's rural customers are more
socially active and involve in interactions with others sharing experiences about their
purchase of product and services. They don't hesitate to share their experiences and
opinions about the products or services they consumed.
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Literature review
The disruption in the telecom industry by players like Jio has increased the pace of the
change in terms of the connectivity in these untapped rural hinterlands.
3.2 Issues and challenges of rural markets
The rural markets offer significant growth opportunities but in order to capitalize on them,
companies must overcome sales and distribution barriers they pose.
According to the Accenture report, these challenges can be classified into three major
categories. They are –
3.2.1 Reaching rural customers
Rural markets are fragmented and are geographically dispersed. This makes it difficult and
costly for the distribution of goods to these far off places. ‘High cost- to- serve' is one of
the main reasons behind many companies staying away from these untapped markets. They
neither possess adequate social nor physical infrastructure. This would result in higher
logistics costs and require more monies to serve rural customers than urban counterparts.
The lack of appropriate infrastructure and deficiency in supply chain networks makes the
selection of channel partners very critical. Recruiting and selecting the channel partner
stands as a critical challenge in the rural markets. Companies try to tie up with the partners
who can connect with the target markets and can understand the company's objectives and
goals in order to enhance productivity and efficiency. However, the available channel
partners have limited capabilities, lack required skills and infrastructure.
3.2.2 Acquiring rural customers
The customers in rural areas are no more closed books. There is a dramatic shift in the
connectivity and their awareness about the products/services due to the disruption in the
telecom sector. The rural youth working in urban areas not only led to an increase in
disposable income but also in knowledge about the products. As the customers become
more aware it is important for companies to lure them with enthralling value propositions.
18
Literature review
The finding of qualified sales staff in rural areas who will be able to understand customer's
demands is another challenge that companies face.
The skill sets required for salespersons in rural areas is different from those of urban areas.
The cost to train salespersons to work in these closely knit areas is quite high because
purchases in these areas are based on community trust and personal bonds.
The seasonality of demand in rural markets depending on the harvest and the monsoons is
yet another challenge as it highly unpredictable. The decision making in rural areas is
typically influenced by strong social fabric these areas contain. So the companies must find
innovative ways to ensure the establishment of credibility in these closely knit areas. There
is a greater dependency on credit in these rural hinterlands due to the seasonality in the
demand and the companies should build credit-based financial models to facilitate the
acquisition of the rural customers.
3.3.3 Retaining rural customers
With increasing competition in rural markets and high customer acquisition cost, it is
indispensable for companies to spend on retaining customers to operate profitably. The
companies must enrich the experience that the product delivers across the lifecycle and
spread positive word of mouth. However, the ability of a company to provide consistent
and reliable after sales service is still a big question in these markets. These diversely spread
rural areas increase after sales – service cost act as a barrier to developing the reliable after
sales service. (Accenture, 2010)
The other challenges faced by the rural markets are as follows –
1. Indian rural markets are fragmented. There are around 6,30,000 villages in India
with different customs, social norms, beliefs and traditions. These differences stand
as an obstacle for companies to replicate the strategy of one region in other. (Kumar,
2013)
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Literature review
2. Infrastructure continues to be a big problem in rural areas. There are rural areas
which, even now lack facilities in terms of basic necessities like electricity, water,
health and education…etc. The absence of adequate transportation facilities makes
it difficult for companies in reaching the customers of remote villages. Around 50%
of the villages in the country don't have adequate road facilities making it difficult
for companies in establishing cost-effective distribution networks. (Ramanjaneyalu,
2012)
3. According to the 2011 census, around 70% of Indian population lives in rural areas
and are broadly spread out. The villages in India are not uniform in size.
The population of nearly half of the villages in India ranges from 1100 to 6000
persons. This type of distribution of population stands as an impediment to the
establishment of cost-effective distribution systems that covers the entire
widespread rural markets. (Ramudu, 2017)
4. Per-Capita income of a rural household is low compared to the urban counterpart.
This leads to the low purchasing power of the rural customer. ( Zabiullah, 2017)
5. An Improper balance between production and demand is also a major challenge in
rural areas. The rural producers are unable to offer customized services to
customers.
They are also unable to achieve economies of scale because of low production and
are failing to provide products at cheaper rates to value-conscious rural customers.
( Zabiullah, 2017)
6. Weak customer relationship management is leading to a loss of potential and
prospective customers. There are no records of rural customers maintained by the
companies so it is impossible to communicate to the customers about the new
arrivals and availability of products. ( Zabiullah, 2017)
7. A Large number of intermediaries in the supply chain of rural markets can lead to
high costs. There are also difficulties in payment collections in these rural
hinterlands as the penetration of advancements in banking sector like non-cash
payments haven't reached these markets.
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Literature review
3.3 Strategies for Rural markets
The various strategies that can be deployed to overcome the above challenges and
succeed in the rural markets are as follows -
3.3.1 Mastering the rural customer reach
There are two strategies that companies can execute to overcome the issue of reaching the
rural markets.
1. To take a dynamic approach to the last mile- This can be achieved by creating
multiple channel strategy that allows deep rural reach. There are four different
approaches that most companies follow: using traditional vans for direct
distribution, establishing sub-distributors in some defined geographical areas, using
2-wheelers and 3-wheelers to directly reach the customers and companies like ITC
use their own parallel sales and marketing platforms like E-choupal for activating
customers in rural areas. Companies like Hero added another layer in form of
authorised representative dealers (ARD's) to the existing hub and spoke network.
The usage of e-commerce as a platform to reach rural customers is rapidly growing
with 1270 hubs. Some of the companies use the ‘feet-on-street' model, where they
use rural entrepreneurs to help in the process of distribution. Tata global beverages
use alternative channel partner called ‘Gaon' to build relationships with rural people
and help in selling the products.
2. To focus on market expansion- Companies can select a cluster of villages which

have comparatively higher potential than others, through deep and systematic study
to be cost-effective in these dynamic markets.
3.3.2 Mastering rural customer acquisition
The most important step after reaching rural customers is acquiring them. Companies
entering the rural markets must have their unique value propositions to attract the
customers. The products with smaller packs that suit the lifestyle and needs of the
customers should be developed with the purchasing power in mind to acquire the
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Literature review
customers. The products should be utility oriented. (Puneet bansal & veerpaul kaur khan,
2013).
In order to acquire the rural customers, companies should also engage set of
stakeholders to prove the point that their business is good. They should be perceived by
customers as focusing on needs rather than business profits. The companies must also
invest in consumer analytics to track the buying behaviour pattern, price elasticity and the
change in consumption pattern…etc. They should engage right influencers who have the
credibility to influence the customers like NGO's, Anganwadi workers, the village
head…etc. (Mamta Kapur, Vineet R. Ahuja, et al., 2010). The use of local fairs has and
Malls as a medium to spread awareness will help companies in acquiring rural customers.
3.3.3 Mastering rural customer retention
It is important for companies to retain the existing customers after acquiring them because
they can be a source of constant revenue and play a good role in spreading positive word-
of-mouth. According to the Accenture survey, one of the best ways to retain customers is
to provide reliable and cost-effective after-sales service. This helps companies in receiving
customer feedback and in facilitating brand focused communication thereby increasing the
customers brand loyalty. Apart from these, businesses will need to focus more on satisfying
needs of the customers rather than increasing sales. Since rural areas are socially knit-
communities, investing in developing areas like improving education, roads and healthcare
will help the customers in creating a deep connection with the company.
The various strategies that can be implemented with respect to each of the 4A’s of the
marketing mix are as follows -
1. Acceptability – Product offered by the company should suit the lifestyle and needs
of the rural customer for it to be accepted. The product should be offered in small
units and low priced packing so that it is line with the disposable income of the
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Literature review
customer. Acceptance of the product will be high in rural markets if it is sturdy and
strong in order to adapt to the rough handling and improper storage capacities of
the rural customers. Rural consumers value functional aspects value and multiple
usages of the products. They also look for durability of the product. (Naidu, 2017)
2. Affordability – Rural population are extremely price-sensitive due to the

irregularities in the income. "Value engineering" is one of the strategies that can be
followed to make the product affordable. Value engineering means replacing the
costly raw materials with cheaper ones without compromising on the quality of the
product. The companies should avoid sophisticated packaging to reduce the cost so
that it can be passed on to the customer.
3. Accessibility – The companies should come up with innovative and cost-effective

distribution channels in order to far-flung rural hinterlands.
There are various innovative distribution channels built by various companies like
bicycle entrepreneurs', feet on the street model, hub and spoke models etc.
Companies like HUL and ITC established their distribution models with the help of
self-help groups from rural areas. (Naidu, 2017)
4. Awareness – The awareness in the rural markets can be spread through local
haats, mandis etc. There are companies which used vans, opinion leaders like
village heads, religious leaders etc. to spread awareness about their products.
(Naidu, 2017)
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Literature review
24
Methodology
CHAPTER 4
METHODOLOGY
25
Methodology
26
Methodology
4 METHODOLOGY
4.1 Nature of the study
This research uses secondary data method and is qualitative in nature. The various steps
involved in this secondary research process are as follows-
Step 1 - "Rural Marketing Mix Strategies" is identified as the research topic for this
study and the objectives of the study are defined.
Step 2 – The data is collected from various sources like Government of India's
websites & reports, white papers of leading consulting firms like Accenture,
Nielsen, BCG, media sources and various reputed journals with the objectives of
the study in mind. The data collected is cross-checked to ensure its credibility.
Step 3 – Finally the data collected is analysed to identify the challenges in rural
markets and to suggest approaches for companies to be successful in rural markets
using the 4A framework.
4.2 Research objectives
1. To identify the challenges faced with respect to each of 4A’s of the marketing mix
in the rural markets.
2. To study the Rural marketing mix strategies of companies across industries.
3. To suggest approaches for companies to be successful in rural markets.
4.3 Scope of the study
1. The study of the Rural marketing mix is restricted to 4A's of marketing
27
Methodology
4.4 Limitations of the study
1. The data collected and analysed for this study includes only a narrow range of
academic scholarly works, periodicals and research did mainly by consulting
companies. While perusing through all the existing works is not the aim of the
study, referring to more literature would surely add to the insights received from
this study.
2. While this study cherry picks examples of successful rural marketing strategies
a comprehensive view of how rural strategy works could be better understood
by undertaking a few detailed case studies.
28
CHAPTER 5
ANALYSIS AND INTERPRETATION
29
30
Analysis and Interpretation
5 ANALYSIS AND INTERPRETATION
This chapter involves analysing the data collected to identify the challenges in rural markets
and to suggest strategies for rural markets using the 4A framework. The following are the
4A’s
5.1 Acceptability
Acceptability is defined as an ability of the firm's total offerings to meet and exceed the
expectations and needs of the customer. Total offering in acceptability not only includes
product but also intangibles like service…etc. Acceptability has two components. They are
Functional acceptability and psychological acceptability.
Acceptability
Functional Psychological
Acceptability Acceptability
Functional acceptability refers to attributes that are commonly associated with product
class's target market. Psychological acceptability refers to the quality of customer
experience while consuming the product. All the aspects of acceptability can be classified
into these components.
31
Companies need to follow ‘User-centric approach' for designing offerings for rural markets.
The best product in urban markets may not succeed in rural markets because the needs of
the rural customers and environment of rural markets are completely different from urban
areas. So designing the offering based on rural customer's needs is pivotal to the
acceptability of an offering in these rural hinterlands.
Sometimes companies become ‘product myopic' focusing too much on developing the best
product that they lose the vision of customer and doesn't take customer needs into
consideration. This will lead to failure in these markets. So developing offerings based on
‘User-centric approach' is of paramount importance in Indian rural markets.
CHALLENGES
There are many challenges that companies face to make their offerings acceptable by rural
masses. They are listed in figure 6.
Limited
usage
knowledge
Risk averse Presence of

customers fake brands
Challenges to
Acceptability
in rural areas
Unique Low
customer standard of
needs living
Figure 6 challenges to Acceptability
32
Low standard of living
Standard of living is very low in rural areas compared to urban areas. This is due to low
disposable income, cultural and social environment of rural customers. The social and
cultural environments of rural areas are driven by various traditions and customs. These
traditions and customs keep the need to change and impact of westernisation low on rural
customers.
Hence standard of living remains low in rural areas compared to urban counter areas which
are more open to change and are better witnesses to westernisation.
Limited knowledge
Most of the rural customers have limited technical knowledge in the usage of products and
low literacy skills for identifying brands. This is because of low literacy in rural areas. Rural
customers identify brands based on the colour, shape, numbers…etc. not based on names
and text as they won't be able to read it.
Presence of fake brands
Rural markets are natives of fake brands. Fake brands capitalize on the fame and brand
reputation of famous brands. They design their offerings in such a way that they completely
resemble the famous brands except in small often unidentifiable aspects by rural customers
like the spelling of brand, logo…etc. They take advantage of the low literacy rate of the
rural customer. Examples of fake brands are as follows-
33
Unique customer needs
Rural customer needs are unique and completely different to that of urban customers. Rural
customers are ‘value-conscious' and are often misunderstood as ‘price conscious'.
They don't accept low priced or stripped version of urban products and demand value for
every rupee paid. So there needs to be lot of understanding of rural customers in order to
design offerings that will be accepted by them.
Risk-averse
Rural customers are generally risk averse and always goes for tried and tested products.
They don't believe in taking the risk by trying new products. This is mainly because of their
low wallet share. So it is extremely difficult for companies introducing new products to get
rural people to purchase them.
Packaging is yet another problem in rural areas due to poor infrastructure and warehousing
facilities.
STRATEGIES TO OVERCOME THESE CHALLENGES AND TO IMPROVE

BOTH ASPECTS OF ACCEPTABILITY
Companies have to be spot on with their strategies to overcome these challenges to

acceptability which improve both functional and psychological aspects. The various
strategies companies need to follow are as follows-
‘Value engineering’
Value engineering is a principle which deals with replacing the expensive raw materials of
a product with less expensive raw materials. This is done without comprising on the overall
34
quality or functionality of the product. The aim of value engineering is to improve the value
derived from the product and suit the needs of the rural customers. Frugal engineering is
similar to value engineering and aims to reduce needless costs.
Value engineering is a strategy followed to improve the functional acceptability of the

product by overcoming challenges like unique customer needs, limited product usage
knowledge, low standard of living. This concept can be of paramount importance only
when rural customer needs are studied in detail through market research. There are many
companies that are have dedicated ‘Rural teams'. These rural teams comprised of
employees from all major departments like production, R&D, marketing…etc. to
understand the needs and life of rural customer better and produce an offering that is
acceptable by the rural customer.
Value
Engineering
Improves Functional
Acceptability
Low standard of Unique customer

Limited knowledge
living needs
Godrej ‘Chotukool' is a perfect example of value engineering and disruptive innovation.

Chotukool is a consumer durable product of Godrej developed for rural markets. This is a
product born out of customer insights. Godrej has a management team going around
villages in India observing the lives of the rural populace. This team found that rural
customers are not in need of a cheap refrigerator but want something that helps them to
35
store left over food items, milk and vegetables overnight. A small refrigerator does not
serve the full purpose as there is lack of proper electricity in rural areas. These small
refrigerators cannot be carried to farmlands or to work since they need a continuous supply
of electricity and are quite heavy.
Figure 7 Godrej Chotukool
Godrej used ‘Value engineering' to tackle the challenges of low standard of living, unique
customer needs and limited knowledge of rural customers. It launched ‘Chotukool', a mini
portable fridge which weighs around 4.5 kg. It doesn't use any traditional processers to cool
down as it would increase the cost but uses thermoelectric chips to keep the temperature
between 5°C to 15° C. It also comes with a plastic body. It runs either on battery, inverter
or solar power. (refer figure 7)
Chotukool addressed the low standard of living of rural customers by pricing it at around
₹3500 only. It satisfied the unique rural customer needs like portability by weighing around
4.5kg and also by running on solar power, battery by eliminating the need for the
continuous supply of electricity. Godrej kept the product simple to use without any need
for technical skills to operate thereby overcoming the challenge of limited knowledge of
the rural customer. Godrej also excelled in branding as well by naming the brand in the
local language as ‘Chotukool' which means ‘small instruments that cools'.
Functional acceptability can also be improved by designing the product such that it has
multiple uses and caters to the unique needs of rural customers.
TVS XL is a perfect example of products designed to cater to multiple needs of the rural
customer. It has been a huge success in rural markets. This is introduced in the moped
36
category and provides great mileage of around 60Kmpl and can be used to commute from
village to town by carrying a significant amount of load a scooter can carry. This product
has seen a series of upgrades to it. The 2018 version of XL super has the USB charging
option to address the need of rising smartphone users in rural India.
Presence of fake brands
Fake and spurious brands are prevalent in rural India. There are two major ways to
overcome this threat from spurious brands. One is to spread awareness about the presence
of fake brands through media and educate them about the different ways to identify an
original brand. The other way is to regularly update packaging and spread awareness about
it so that the fake and spurious brand owners find it difficult to copy.
The above strategies aimed at improving functional acceptability by overcoming challenges

like the low standard of living, unique customer needs and limited customer knowledge.
The problem of risk averseness of rural customer restricts the psychological acceptability
of an offering. One of the ways to improve it is to provide service guarantees like easy
return policies, cashback guarantees…etc. and to avoid fear, uncertainty and doubt in the
minds of rural markets. This can also be done by establishing a robust after sale service
systems and processes in rural areas especially in the case of consumer durables and
automobiles. Resale values also play a significant role in reducing the risk in certain
categories. For example, when ‘Eveready’ launched plastic torches for rural markets people
still stuck to torches made of brass because of their higher scrap value of brass.
Most of the companies considered functional acceptability of product to be most important

in rural context. They leave out the psychological acceptability which includes customer
experience social image, status, prestige…etc. The trend is changing because of free
information flow and exposure of rural customer to urban behaviour. Urbanisation is
playing a key role in rural people trying to emulate the behaviour of their urban
counterparts. This is explained with the help of figure 8.
37
Figure 8 Impact of urbanisation on rural behaviour
The above model explains the impact of urbanisation on rural customer behaviour. Once
the rural youth goes to urban areas for better work there is not the only flow of income to
his/her home in rural areas but also youth gets the behaviour of urban customers along with
him/her. The purchase decision making of rural youth staying in urban areas will be
influenced by urban practices. The youth will then educate his/her family about the benefits
of usage of branded products and making informed purchases. This will result in rural
customers opting for branded products since they provide superior customer experience.
Urbanisation also led to an increase in disposable income of rural households so their

purchasing power is seeing a rise so do their appetite for branded products. This is proved
by a survey done by Accenture wherein 71% of the rural customers purchased branded
products because of trustworthiness and reliability.
So it is time for companies to improve even the psychological acceptability of their offering
along with functional acceptability.
38
5.2 Affordability
Affordability is one of the main elements in the rural marketing mix that determines the
purchase of a product or service. This is an important element to be focused upon by the
companies entering the rural hinterlands.
Affordability refers to ‘willingness' and the ‘ability' to pay for a purchase of a particular
product or service. The willingness to pay reflects ‘economic desirability' and the ability to
pay reflects ‘economic viability' from customer's perspective. Economic desirability arises
when the value that the customer gains surpass the total costs incurred. The total costs in
this aspect include monetary and also non-monetary costs like time and effort. These non-
monetary costs are incurred differently by various customers depending on the time and
situation they are in. The Economic viability of a product or service exists when the
purchase of such product or service does not risk the financial comfort of the customer.
The job of a responsible marketer is to look at the long-term and make sure that the
customer doesn't deteriorate his/her financial health by purchasing the product/service.
Affordability
Willingness Ability to
to pay pay
The willingness to pay and the ability to pay has to be high for a transaction to be desirable
from both company and customer perspective. A Transaction will usually not take place if
either of them is absent. So a company has to find creative ways in enhancing these two
components to succeed in the rural hinterlands.
39
CHALLENGES
There are two main challenges that need to addressed to improve the ability to pay in rural
areas. They are:
1. Low disposable income

2. Seasonality of income
Low disposable Seasonality of

income income
Problems
that reduce
ability to pay
Low disposable income
Rural areas have low disposable income compared to urban counterparts. So the purchasing
power of an average rural customer is much lower than the urban customer. For instance,
the per capita income of rural areas is ₹40,772 compared to ₹1,01,313 of urban areas in
2011-12. (PTI, 2016). Low disposable income in rural areas is due to the low per capita
income of rural households. So they cannot afford to spend like the urban customers.
Seasonality of income
Seasonality of income is yet another challenge restricting the ability to pay of rural
customer. This is mainly due to the over-dependence of the rural populace on agriculture
as the major source of income. According to the National Sample Survey Office (NSSO),
40% of rural households are dependent on farming as the main source of income. Since
rural people are highly dependent on agriculture, it is only the harvest season that brings
money in their hands.
40
There are certain states that contain the high number of agriculture households compared
to others. So the problem of the seasonality of income is quite high in these states compared
to others.
A report by NABARD showed that north and north-east states contain a high number of
agriculture households compared to other parts of India (refer to figure 9). So seasonality
of income is no more a pan India problem but is restricted mainly to certain states.
Figure 9 NABARD report on financial inclusion
STRATEGIES TO OVERCOME THESE CHALLENGES THAT REDUCES ABILITY

TO PAY
These above-mentioned challenges are to be dealt with practically to improve the ability to
pay of rural customers. There are two ways to approach this problem. They are:
1. Design the offerings in such a way that they are affordable by rural people keeping
in mind their disposable income. This is from the company's perspective.
41
2. The other way is to look from the customer's point of view and increase the
disposable income of rural customers.
There are many ways in which companies followed the first approach i.e. to design the
offerings in such a way that they are affordable by rural masses with their current level of
disposable income.
‘Sachet Revolution’ is a big revolution that took place with an aim to make product
offerings affordable by the rural masses.
This is one of the major strategies adopted especially by FMCG companies in rural
hinterlands and found to be very successful. This revolution was pioneered by Cavinkare
way back when it launched ‘velvet' shampoo in sachet form in 1976. This has been followed
by Cavinkare launching ‘Chick' brand of shampoo in 1999. This launch of shampoo in form
of sachets led to an increase in market share of the brand from 5.6% in 1999 to 23% in
2003. (Singh, et al., 2009) This sachet is then being followed by various FMCG companies
like HUL, ITC…etc. Sachet strategy more or less became a norm to be followed by
companies entering emerging rural markets. Companies can improve their margins by
selling their products in sachets because per ml price that customers pay for products sold
in sachets is higher than that of products sold in bottles. So companies gain more by selling
sachets than bottles keeping economies of scale in production aside. Some of the companies
who emerged successful by following this sachet revolution are Coco-cola, Parle,
Godrej…etc.
Coco-cola conducted a survey in 2001 and discovered that 300 ml bottles priced at ₹10 was
found be costly by rural customers and a bottle of 300 ml was shared by two people. So
taking these findings into consideration and to penetrate further into rural India Coco-cola
brought out new 200 ml bottles priced at ₹5 and found it to be successful in rural markets.
Nestle did the same by launching KitKat at ₹5 and making it affordable to rural masses. So
did Godrej by introducing the Cinthol priced at ₹4-₹5.
The main reason behind the rural customer purchasing a shampoo sachet is low disposable
income. The daily income of a rural household is in some hundred rupees. Most of which
goes in procuring food items and other eatables. So rural household cannot afford to spend
₹100 or more in buying a shampoo bottle rather he/she buys a shampoo sachet costing ₹1
or ₹2 which is within his/her daily budget.
42
The sachets also provided an opportunity for rural customers to try products which they
never tried because of the high cost. This thereby drives the consumption in rural areas.
Sachet strategy is also adopted by various other industries like the airline industry, telecom
industry…etc. Airlines like Indigo has adopted this strategy by providing ‘no frills' travel
at an affordable cost. Telecom industry also adopted this strategy by offering small plans
at as low as ₹10,₹20...etc. The post Jio era witnessed small internet packs at ₹25 with an
expiry of 1 day and many such low priced packs to target the bottom of the pyramid.
There are also cases in product categories like jam, milk ...etc. where sachet strategy didn’t
succeed as well as it did in shampoo and other FMCG category. (Singh, et al., 2009)
FMCG, telecom and other industries, where rural customers purchase is ‘expense’ in nature
adopted sachet strategy while industries like automobiles, consumer durables…etc. can use
various strategies like seasonal payments, third party payments, EMI’s where planned
purchase is ‘investment’ in nature.
Automobile and Consumer durables industries need to concentrate on overcoming

challenges that restrict the ability to pay of rural customer because purchasing these
products is more of investment in nature and requires a large sum of money to do so. These
companies can provide EMI's and provide options for customized payments to rural people
to influence them to purchase. For example, ‘Tata Ace' is a mini truck launched by Tata
Motors. It helped rural customers to finance the truck with the help of its own financing
firm. It also tied up with third-party financing firms to offer 5years loan at low monthly
instalments compared to three-wheelers loans. These industries can design seasonal
payment options which involve paying the price of the product only in harvest seasons.
This is basically like EMI's but the instalments to be paid only in harvest seasons. This can
be implemented in states dominated by agriculture households who are dependent on
farming as their main source of income.
The fast-growing E-commerce industry can adopt strategies like ‘Harvest wallets' to
improve the ability to pay by reducing seasonality of income in rural areas. This strategy
involves attracting customers to fill their wallets with cash in harvest seasons by providing
them with additional benefits like cash back, interests on wallet balance after certain limits
and discounts on purchase through wallets…etc. This strategy eliminates seasonality of
43
income because the income earned from crops in harvest seasons can be spent throughout
the year whenever necessary and will earn interests, as it is maintained in wallets of these
E-commerce firms, not in the hands of rural customers.
This approach of designing low-cost offerings and solutions is from a company perspective
to improve the ability to pay of the rural customer.
The second approach that can be used to improve the ability to pay of rural customer is
looking from the customer's perspective. This involves great efforts by companies because
it requires developing lives of rural customers.
‘Inclusive Marketing’ is a trending concept being applied in these rural markets. This
concept basically involves viewing poor people not only as customers but also as producers
and suppliers. This concept guarantees to add economic value to the goods and services
offered by the BOP people. (Kashyap, 2010) Inclusive marketing aims at creating ‘win-
win' situation for both the company and customers.
ITC e-choupal is a perfect example of inclusive marketing. India has second largest
cultivable land in World but has one of the least per hectare productivity. The main reason
behind this is the fragmented nature of Indian farming and inability in achieving economies
of scale due to its fragmented nature. Since they own small piece of land, usage of modern
technologies proves to be expensive for them. Quality takes a hit due to all these reasons.
So there is a need to improve the income earning capacity of farmers which will indirectly
44
improve quality and productivity. A typical farmer's produce has to go through a lot of
intermediaries to reach the processors. (Figure10)
Figure 10 Conventional value chain
The large number of intermediaries decline the profit of the farmers and exploit them
without giving them what they deserve.
So in order to raise the income level of the farmers and to reduce the high level of
intermediaries, ITC developed e-choupal, where choupal means ‘village meeting place'.
(refer to figure 11)
It is basically a virtual marketplace which eliminates non-value adding middlemen by

helping farmers directly contact with processors. This model uses the internet as a base for
communication. There are physical support houses established in each village where an
educated farmer called sanchalak will help farmers by informing them about the weather
conditions, best farming practices, raw material costs and best prices available for their
produce. The information regarding all these will be uploaded by ITC on its websites.
45
Figure 11 E-choupal, new business model
Farmers wishing to sell their produce to ITC itself can do so by giving them to sanchalak
house in their village which will be collected by ITC. Farmers can order various raw
materials from different suppliers through choupal centres. ITC e-choupal basically helps
in improving productivity, minimizing transaction costs and increasing income earning
capacity of farmers.
46
Figure 12 e-choupal coverage
This initiative not only helped farmers to improve their disposable income but also made
sure ITC gets high-quality raw material for its products like Aashirvaad, Sunfeast…etc. It
created a win-win situation for both the company and the customer. There are many
companies following this approach in recent past as it proved to be winning.
Willingness to pay is a function of acceptability of product and can be improved only by

delivering a product that provides value which is higher than all the monetary and non-
monetary costs incurred in buying the product. So it depends wholly on the acceptability
of the product.
However, not all companies have resources and strengths either to develop low-cost
offerings by investing in R&D or to help rural customers improve their ability to pay. So
companies who cannot afford to take these two approaches and improve the ability to pay
can be selective in choosing rural markets. They can choose rural markets with high
disposable incomes compared to others. These markets can be found by observing various
factors as mentioned in figure 13.
47
Irrigation
facilities
Technological Government
advancements Budget
Factors
impacting
choice of
target
markets
Type of
Government
crops investment
grown
Figure 13 factors influencing the selection of target markets
For example, a company can choose a rural market where government schemes like
MGNREGA are implemented at its best since they improve the ability to pay off the
customer and where irrigation facilities are abundant. They can also choose markets that
grow commercial crops which leave more money in the hands of the farmer. In conclusion,
choosing a target market in the rural area depending on various above-mentioned factors
would no doubt decrease the number of resources to be spent but it cannot guarantee that
rate of success, which adopting the two methods of increasing ability to pay would probably
do.
Affordability, one of the most important of 4A’s is extremely important to drive purchase
of product or service. It basically involves increasing the ability to pay and willingness to
pay of rural customers. Ability to pay can be improved by designing an affordable offering
and by increasing the disposable income of rural households. Willingness to pay can be
delivered by designing an offering whose value surpasses the costs customers incurred.
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5.3 Awareness
Awareness is one of the 4A’s that is pivotal to the success of a product in rural markets.
Awareness is all about arousing a quiescent need in the customer and triggering the
purchase process of a particular product or service.
Awareness can be defined as knowing and understanding both the brand and product. An
ideal awareness campaign should equip customers with knowledge about the product and
brand. Product knowledge helps customers in understanding the benefits that it provides
while knowledge about the brand helps in ‘top of the mind recall’ of the brand. The goal of
awareness is not only to educate the rural customer but also to form a positive attitude
towards the brand.
The task of spreading awareness about a particular product or brand in rural areas is not as
easy as it is in urban India. The various challenges that the rural hinterlands pose make it
difficult for the companies to make the rural customer aware about their product and brand.
CHALLENGES
There exist many challenges that restrict the success of companies in their awareness
endeavours with respect to their products and services in rural India. These challenges don’t
exist in urban areas. So any attempt by companies to replicate urban awareness practices in
rural areas will prove to be disastrous and may even cause significant leakages to their
advertising budgets. Hence companies have to be aware of the challenges that rural markets
constitute in order to be effective. The challenges that these rural hinterlands pose with
respect to spreading awareness can be classified into three main categories.
They are –
 Low literacy rate

 Limited media reach
 Cultural differences
49
Low literacy
levels
Low mass
Cultural media
differences penetration
Challenges
of
Awareness
Low literacy
The literacy levels in rural India is low compared to the urban areas. According to NSSO,
the literacy rate in rural India is 71% compared to 86% of urban areas. There is also a high
gender disparity in literacy rates in rural India compared to that of urban areas. The Literacy
rate of rural women is significantly lower than male.
The design of the awareness campaigns and the selection of the channel should be made
keeping in mind the challenge of low literacy rates. For instance, using print media as the
channel would do no good in educating the rural customer about the product or brand since
they have limited ability to read and write.
Low media penetration

According to Broadcast survey, the penetration of TV in rural India is about 55% (refer
figure 14). In 2016, there are 99 million households who own a television and this grew at
a rate of 10% to 109 million households. Even though there has been a growth in television
penetration in rural areas, the penetration rate stands at 55% only. The mass media
penetration stands at 57% in rural areas. (Shah & Desai, 2013) So advertising through mass
media alone cannot be an effective option for a company to reach entire rural markets.
50
Figure 14 Market wise TV penetration
Cultural and language differences

There exists a huge amount of differences in the dialects and languages spoken in rural
India. The impact of westernization is high in the urban areas and not so evident in most of
the rural areas. Traditional practices and customs are still very much prevalent in rural
hinterlands. So since there are differences in cultures of rural areas, the awareness
campaigns should be tailor-made to each of these areas which exhibit variations in culture
and languages are spoken. If a company follows ‘One size fits all' principle in developing
an awareness program it would lead to disasters as a particular action in a culture would
mean completely opposite in another. This would also lead to complete misunderstanding
of the message designed by the company and would cause irrecoverable reputation loss to
the company.
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STRATEGIES TO OVERCOME THESE CHALLENGES
There are different strategies that various companies executed to overcome these challenges
and emerge successfully. The various ways in which these strategies manifested with
respect to each of the challenges are as follows-
• Experiential campaigns
Low literacy
• 'Edutainment'
Limited mass • Non-conventional media

• Mobile marketing
media • Local influencers
penetration
Cultural and
Language • Customized content
differences
Low Literacy
Low literacy is one of the most prominent challenges in rural India. It acts as an impediment
to the awareness activities of the companies. So in order to overcome this challenge of
limited reading and writing capacity of rural customers, marketers need to find alternatives
to educate and inform people about their products and brands.
52
Edutainment
‘Edutainment’ has been one of the successful strategies that various companies adopted to
build awareness. It basically means ‘Educating’ through ‘Entertainment’.
This involves blending the information about the brand or product with entertainment so
that it is easily understood by the rural customer.
Axis bank used this innovative method to make people aware of the banking services. Axis
bank designed comic strips that speak about banking services and distributed them across
the villages to create a positive brand attitude in the minds of potential customers. The
advertising team of Axis bank also performed skits blending comics and information about
banking services in local languages in rural areas. (Accenture Strategy, 2014)
India is on its way to become a sporting nation. Rural areas are no exception to this. Sports
like cricket, football and kabaddi attract a significant number of users across age groups.
According to BARC, the number of viewers in rural India was 1,93,000 compared to
176000 in urban areas. This data clearly shows that apart from IPL, the most celebrated
cricket festival in the country, ISL also attracts a significant number of rural folks. These
platforms give a great opportunity for companies to use them to base their awareness
campaigns in form of sponsoring teams or advertisements during matches…etc.
Television has been one of the widespread mass media in rural areas. According to
Broadcast India research council, the average time spent on watching television has seen a
jump of 26% in rural India compared to urban areas. There is also high viewership in the
categories of serials and film-based programs in rural markets. (Broadcast India Research
Council, 2018) . The typical day of rural populace ends early compared to urban ones and
they have enough time to spend watching serials and film-based programmes in television.
So companies can make effective use of these entertainment channels to spread awareness
by blending them with the information that needs to be conveyed to the rural customers.
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Experiential campaigns
‘Experiential campaign' is another way to advertise a company's products or services and

build a positive brand image.
These campaigns involve companies organizing events wherein potential customers get to
experience the product and get educated about the usage, benefits and advantages of the
product. Experiential campaigns help companies in winning the trust of the rural customers
by creating a positive brand image in their minds.
HUL’s most famous ‘Khushiyon Ki Doli' is a rural marketing initiative that aims at driving
brand awareness and educating people about its products and brands. This campaign was
initially launched in Uttar Pradesh, Andhra Pradesh and Maharashtra. It focused on
educating all the village people by playing Audio visuals and television video commercials
on its brands. This campaign also involved live demonstrations highlighting the hygiene
benefits that these brands offer on their usage. HUL also organizes games and quizzes based
on the demonstrations and the TVC's shown in order to reinforce the names of its brands
and their health benefits to the rural customers. ‘Khushiyon Ki Doli' helps HUL not only
in spreading awareness about its products but also in instilling belief in minds of a customer
about the health benefits that these brands offer. (Kaur, 2013)
These experiential campaigns help companies gain the trust of risk-averse rural customers
by making sure they experience the benefits and advantages of using the product or service.
The prominent goal of ‘Edutainment’ and ‘Experiential campaigns’ is to eliminate

roadblocks that low literacy poses in spreading awareness about a particular product or
service.
Limited Mass Media penetration

The mass media doesn't have the pan rural presence. So companies have to find alternate
channels to make rural customers aware of their products. The various ways in which
companies can spread awareness in the absence of mass media are as follows:
54
Non-conventional media
Mandi, haats, folk media, melas...etc. are the prevailing unconventional media existing in
rural hinterlands. These media play a prominent role in communicating about the products
and brands of the companies to the customers.
Haats
Non-
Melas conventional Mandi
media
Folk
media
Haats
Village haats are avenues for social get-togethers’ of rural people. There are around 47000
hats in India. (Dr. Sathyanarayana & Dr B. H. Suresh, 2017) They are weekly markets
where rural people come with an intention to buy necessities, garments, farm inputs...etc.
These haats can act as potential touchpoints for companies to leverage upon.
Melas
Melas are very much part of the Indian culture and are still prominent in rural areas. There
are religious as well as festive melas. Kumb mela is an example of religious melas whereas
melas that are organised for Diwali, Eid…etc. are festival melas. Melas are the best
aggregators of the otherwise dispersed population. These are also useful in attracting
substantial customers with money in their pockets at one go. (Balakrishnan & Bapna, 2015)
HUL's 3 Roses, largest selling tea brand in South India used the melas during Maha
pushkaram to promote its improvised formulation.
55
It distributed around 3000 cups of hot beverage across 250 small tea stalls organised in
mela in Andhra Pradesh. These cups have the brand logo and message appearing on them
as and when filled with the hot beverage. This is something novel and fascinating to a rural
customer and evoked ‘wow' moments from him/her. HUL claims that this initiative saw a
sales rise within 12 days of the festival.
Dabur, one of India's largest ayurvedic and natural consumer product manufacturer used
the religious melas like ‘Kumb Mela' to spread awareness about its product odomos.
Dabur distributed odomos sachets to spread awareness about its both indoor and outdoor
protection against mosquitoes. (Balakrishnan & Bapna, 2015)
Mandi
Mandis are markets for agri-produce and inputs. These are good platforms for durable
products like tractors, farm equipment, pumps…etc. and also non-durable like fertilizers
and seeds, pesticides. There around 7000 mandis in India. (Dr. Sathyanarayana & Dr B. H.
Suresh, 2017) Mahindra used these mandis as prime locations to conduct test drives and
display their tractors.
Folk media
Folk media refers to folk dances, magic shows, street theatres and puppetry...etc. that is the
source of entertainment for rural people. These can act as good platforms for spreading
awareness about the company's products and services. For instance, Life Insurance
Corporation took the route of puppet shows in villages to spread awareness about their
insurance products.
Mobile vans are also being used by companies to inform customers about their products in
rural areas. Maruti's video on Wheels campaign is a perfect example of marketing through
mobile vans. Maruti identified the need in two-wheeler customers to upgrade to four-
wheelers in rural areas. It used vans with air conditioners and television sets to show
commercials based on the need to upgrade to four-wheelers and benefits of upgrading. The
commercials communicated about the reliable products and extensive service networks of
Maruti Suzuki.
56
Figure 15 video on wheels campaign
Mobile Marketing
Mobile marketing is the most happening thing, especially in rural markets. According to
Telecom Regulatory Authority of India, rural India has around 499 million subscribers out
of which 109 million own a smartphone. The penetration of mobile devices is much higher
than televisions in rural India. This forces brands to use mobile marketing as a tool to
connect with its customers and to educate them about their products. Mobile marketing is
found to be one of the most effective ways to reach rural markets which are otherwise
disconnected. A mobile-based awareness strategy also helps companies and brands in
gathering precious customer data which can be used to customize communication.
HUL's Kan Khajura Tesan initiative was aimed at states like Bihar and Jharkhand which
have a low media presence. This campaign was aimed at providing entertainment to rural
people who gave missed call to the given number. The information about the different
brands of Hindustan Unilever is juxtaposed with the entertainment. This initiative not only
helped HUL in educating about its brands but also helped in a creative positive attitude in
the minds of the customer.
Mobile internet penetration in rural India is around 18% and likely to see a rise. (Internet
and Mobile Association of India (IAMAI) 2017). The disruption in the telecom sector
initiated by Reliance Jio led to a sharp fall in the prices of data thereby making it affordable
to the rural populace. CMR research found that 35% of 4G subscriptions from rural areas.
Government is also aiding the internet access by establishing 15000 Wi-Fi hotspots in rural
57
areas. So the internet is no more a faraway dream to rural customers. Since smartphone
sales are also on the rise in rural hinterlands the usage of social media platforms like
WhatsApp and Facebook is growing exponentially. According to a survey done by MOTN,
usage of WhatsApp has risen drastically in India. Rural areas saw a growth rate of 100% in
WhatsApp penetration. (refer to figure 16) (Lokniti-CSDS Mood of the Nation (MOTN),
2018)
Figure 16 WhatsApp users in rural and urban India
These statistics show tremendous potential these social media platforms have in rural India
as a low cost yet effective channels of communication. The usage of social media in rural
markets to spread awareness is still in its nascent stages. One of the most important aspect
companies should keep in mind before using these channels in rural India is not to replicate
strategies of urban India. Rural India demands customized content keeping the culture and
literacy of the people at the heart of it.
Local Influencers
Rural areas are closely knit communities and hence local influencers play a significant role
in purchase decisions of the rural customers. Local influencers can act as a trusted source
of promoters of brands and companies.
58
Asian paints used these local influencers like sarpanch and others by painting their houses
to communicate to the people that their paint lasts long. Since influencer's house is painted,
it created a buzz in the village and made people aware of Asian Paints. (Naidu, 2017)
Accenture survey claims that the traditional influencers like sarpanch, village heads…etc.
are being wiped out and are replaced by educated youth, family members and sector-
specific experts like barbers for grooming products, mechanics for consumer durables.
The new influencer's opinion is valued because of their expertise in that particular field and
in-depth knowledge. (Accenture Strategy, 2014)
Figure 17 Shift of influencers
The role of women in family decision making grew in rural areas due to the rise in woman
employment and empowerment. So it is a great opportunity for marketers to leverage upon
these new influencers and turn them into brand advocates in these rural markets.
There is no one channel that fits all markets, so the decision on channel selection should be
entirely dependent on the product to be marketed, the behaviour of the target market and
strategies of competition. There is a general tendency to use a mix of conventional and non-
conventional media to educate the rural customer about one's brand and product.
59
Cultural and language differences
This is one of the most significant but often overlooked challenges in rural India. India is a
land of various cultures, languages and traditions. Urban areas witnessed dilution of these
ancient cultures and traditions due to the impact of westernization but most of the rural
areas still follow these.
So it is extremely important for companies not to burn their fingers by ignoring cultural
and language differences in these rural hinterlands. The strategies companies must follow
in order to overcome these cultural and language barriers are as follows:
Customized content
The communication content should be customized to each of the regions and states where
these rural markets exist. Maruti used different languages in different states in its ‘Video
on wheels' campaign to make sure that it's commercials are tailor-made to each of these
markets and are most effective. It is very important that the content shouldn't be against the
culture and traditions of the place. There would be a loss of brand image and monetary
resources of the company if the content is against culture. So in order to avoid these
calamities, companies should have a ‘Rural Team' that studies in detail the culture, tradition
and the values of a particular target market. These teams should contain members from the
marketing team and at least one member who is native of the village and has a thorough
knowledge of the village. The awareness campaign should be designed only after studying
the target market thoroughly.
The goal of awareness is not only to make target customers knowledgeable about product
and brand but also to aid in forming a positive attitude towards brand in the minds of the
customer. So in order to gain positive brand reputation companies are following ‘Societal
marketing’, a concept wherein marketing decisions will take into account society's long-
term interests as well.
60
Tata Chemicals is one of the many companies which has used ‘Societal marketing’ to its
best. The white shark is one of the fishes that is being massacred at a huge rate in and
around regions of Okhamandal. This led to a fear of the extinction of white sharks.
Tata chemicals along with Wildlife trusts of India came up with an awareness campaign
that urges locals not to kill these sharks and asked them to treat them as daughters of Gujarat
coming home. This campaign was quite successful and was depicted by the fall in the rate
of their killings. This initiative helped the company to create a positive brand image in the
minds of the customers.
Performance of Awareness
High
Common Ideal
Product knowledge
Worst Unusual
Low
Low Brand Knowledge High
The final goal of awareness is to reach the ‘Ideal' stage. An Ideal stage is where customers
have high knowledge about both the product and brand as well. Companies with their
awareness campaigns at ‘Ideal' stage enjoy ‘ top of the mind' or spontaneous recall. This
drives their sales and profitability. 'Common stage' is where most of the companies lie
61
because they concentrate more on spreading awareness about their brands rather than about
the products. They don't realize that product knowledge is as important as brand knowledge.
These companies ignore the fact that it is product knowledge that makes customers decide
whether purchasing a product would satisfy his/her need or no. So the champion companies
of rural markets should make sure that their awareness campaigns should be at the ‘Ideal'
stage.
Product knowledge makes the rural customer aware about the specifications of the product
and the needs it satisfies.
It helps rural customers in deciding whether or not a particular product satisfies his/her
needs. Once a rural customer decides to buy a product, the next question that arises is of
which brand’s product should be purchased. Brand knowledge eliminates the question of
choice and drives the purchase of a particular brand which scores high on educating rural
customers about itself.
Awareness in rural areas is not an easy task and involves overcoming challenges like low
literacy, limited mass media penetration and cultural differences. However, a study of the
target markets and the use of conventional along with non-conventional media and
integrating the content to be communicated with entertainment helps companies in not only
educating the rural customer about its products and brands but also in building a positive
attitude towards their brands.
5.4 Accessibility
Accessibility can be defined as the company's ability to ensure that its offering meets up
with the customer, at the time and place of the customer's choice. The aim of the
accessibility is to minimize the effort from the customer side in obtaining the offering.
Accessibility is the biggest problem faced by corporates eager to enter the Indian rural
hinterlands. Companies may excel in all the other 4A's like awareness, acceptability and
affordability but if they don't make their offering accessible to customers then all those
efforts are of no use.
Accessibility also has two major components to be dealt with. They are (refer to figure 18)
62
Accessibility
Availability Convenience
Figure 18 Components of Accessibility
Availability refers to making sure that supply matches with demand as accurately as
possible. The main aim of availability is to make sure that situations of excess demand and
situations off excess supply are as minimal as possible. The situation of excess supply
exerts pressure on reducing the price of the offering while that of excess supply would
result in a lost customer.
Convenience refers to the ability of a company to ensure that customer is able to acquire
the right product at the right location and at right time. This is extremely important
especially in rural areas where it is not easy for the customer to obtain the needed product
in efficient time. Accessibility is not about firm distributing the products to the customer
instead it is about how easily customer is able to access the product or service of a company.
CHALLENGES
The various challenges that companies face in improving accessibility to rural areas are as
follows listed out in figure 19.
63
Fragmented
villages
Lack of
Challenges to Poor
technical
Acceptability infrastructure
knowledge
Non-
avilabilty of
channel
partners
Figure 19 Challenges to acceptability
Fragmented villages
There are around 630000 villages in India and are widespread over 29 states. These villages
are extremely fragmented. The population most of the villages is around 2000.
These villages are extremely widespread and have low population. Since they are
widespread, the cost to serve these villages is high as companies cannot experience
economies of scale. This acts a big obstacle for companies entering rural markets.
Poor infrastructure
Infrastructure has always been a huge problem in rural areas. Transportation has been
difficult for these hinterlands due to non-availability of proper roads. Electricity has also
been a major problem resulting in poor storing and warehouse facilities in rural areas.
Unavailability of channel partners
Urban areas contain an ample number of logistic firms and competent channel partners but
their presence in rural markets is sheer minimal.
64
Since widespread rural markets do not offer profitable opportunities there is the very low
or negligible presence of logistic and channel partners.
Lack of technical knowledge
Rural customer's low technical knowledge serves as an obstacle to accessibility. This is due
to low technical literacy. Limited technical knowledge makes the availability of products
through E-commerce platforms almost an impossible option.
STRATEGIES TO OVERCOME THE CHALLENGES OF ACCESSIBILITY AND

IMPROVE CONVENIENCE & AVAILABILITY
There is no ‘one strategy fits all’ that provides solutions to all the problems of Accessibility.
Companies have been extremely innovative in overcoming challenges to accessibility and
improving convenience & availability.
Availability
Fragmented Non- availability of Poor rural

villages channel partners infrastructure
Figure 20 Overcoming challenges to Availability
Availability component can be improved by overcoming the challenges of fragmented

villages, poor rural infrastructure and non-availability of channel partners. (refer to figure
20)
65
Fragmented villages
Fragmented and widespread villages act as an impediment to cost-effective distribution

systems. Hub and spoke models is one of the prominent models used to overcome the
problem of widespread villages.
This model of logistics eliminates the need for a point-to-point system or direct routes. Hub
is at the centre of different spikes. It is basically like a bicycle wheel where the hub is the
centre part holding all the spikes together.
Figure 21 Hub and spoke model
Figure 21 clearly shows that Hub and Spoke model allows a company to ship the products
to different hubs. The products from hubs are shipped to spokes thereafter. So instead of
the company distributing from point to point each time it can distribute goods to the hubs
which distribute goods to the spike centres.
Coco-cola and Pepsi are among the companies that follow the hub and spoke model of
distribution to improve the efficiency of distribution systems.
66
One more cost-efficient way to implement these Hub and spoke models is to identify the
feeder markets. Feeder markets are the villages which are relatively bigger in size and it is
basically a marketplace for the small villages nearby.
So identifying these feeder markets and establishing company’s outlets will help further
reduce the costs related to distribution. The small retailers will purchase their stocks from
the outlets in feeder markets and then sell to their local customers.
This model helps companies to overcome the challenge of fragmented villages as they stick
themselves to feeder markets and don't need to be present in all widespread villages.
Non-availability of channel partners
The non-availability of channel partners is yet another major challenge to accessibility.

There are no competent channel partners in rural areas because of the high cost to serve,
poor infrastructure…etc. The two main ways of overcoming these challenges. They are
'Co-create'
Non-availability of
channel partners
'Collaborate'
Figure 22 Overcoming challenge of non-availability of channel partners
The most proven successful strategy to overcome this challenge of non-availability of the
channel is ‘Co-creation'. The main aim of this is to create a ‘Win-Win' situation for both
parties.
HUL's project Shakti is a trademark example of the ‘Co-creation' strategy. Project Shakti
is used by HUL to sell its beauty and health care products to rural customers in far-flung
67
and media dark villages. There is a low presence of traditional media in these villages and
the usage of marketing channels like E-commerce and retail stores will be inefficient.
HUL hired females of the village in around 15 villages. These local women called ‘Shakti
Amma's' purchase products from locations organised by HUL and sell them in their
villages. These Shakti Ammas earn income through commissions from HUL on the number
of goods sold. Shakti Ammas earn income between ₹2000-3000. HUL also train these
women in hygiene techniques which help not only in marketing the products but also in
staying away from diseases.
This project not only benefitted HUL in reaching out to far-flung rural areas and increase
its rural presence but also improved the income earning capabilities of rural women. This
project thereby created a Win-Win situation both for rural women and HUL.
Colgate bicycle entrepreneurs are also a similar project which involves unemployed rural
youth selling and distributing the products to small retail stores in villages. Rural youth
basically buy products from Colgate and distribute them to retailers at 3% margin and sell
them in mandis at 8% margins. This rural youth were initially given a regular income of
around ₹1500 which will decrease gradually as the sales of these bicycle entrepreneurs pick
up. This project also created a ‘Win-Win' situation for Colgate as it increased its rural
presence as well as for youth as it gave them a source of income.
One more way to find competent channel partners in rural areas, especially for companies
with limited resources is to collaborate with the existing ones. This saves resources and can
still help in entering rural markets.
For instance, Amazon partnered with India post to offer delivery services to around 19000
Pin codes. Companies like Patanjali are also making use of Common service centres
(CSC’s) to deliver their products. CSC is a government’s physical facility to deliver various
government schemes. There are around 250000 CSC’s in rural areas in India
So companies’ tie-up with these government outlets to increase availability and

convenience of their products.
Companies entering rural markets can initially go for collaboration to find competent
channel partners. They should try to co-create with the rural people to develop a strong and
sustainable channel strategy once they see a strong demand for their products in these rural
hinterlands.
68
Poor rural Infrastructure
Poor rural infrastructure is a huge challenge to accessibility in rural markets. There are two
ways can overcome this challenge. One is to improve the existing infrastructure and the
other is to choose markets with better infrastructure.
Maha cement, a cement manufacturing company improved the infrastructure of roads in

Mellacheruvu village, Telangana. Maha cement found roads that connect the village to
nearby towns are in poor state. These roads will dampen its efficiency in connectivity as it
owns a fleet of trucks which transports the cement manufactured to various cities and states
through them.
So it took up the initiative of laying down roads for this village. This improved its
transportation efficiency and also decreased the maintenance cost of vehicles which used
to often visit housekeeping departments due to poor roads.
The cost of laying down roads that Maha cement incurred are much lesser compared to the
benefits that are derived in terms of saving maintenance costs and increased transportation
capacity. This move by Maha cements also improved its brand image in local people.
However, companies should go with this step only if the overall long-term benefits from
developing infrastructure exceed the costs incurred in it by the company.
Companies who don't have the required resources to develop infrastructure and are new to
these rural markets should be selective in targeting markets where there is adequate
infrastructure. The selection of target markets can be dependent upon various elements like
Government schemes, budget expenditure of government…etc.
Limited technical knowledge of rural customer
This play a big role in obstructing companies in improving convenience to rural customers.
Rural customers, unlike urban customers, don't have technical knowledge. So this is a huge
challenge for especially for the booming E-commerce industry. The Inability of the
majority of rural customers to use E-commerce sites makes it extremely difficult for
companies to improve convenience inaccessibility.
69
However, Inthree a hybrid E-commerce firm has improved the convenience aspect by
building a customer centred business model. Inthree created an online platform called
Boonbox.com.
It is multilingual in nature and has tied-up with many leading manufacturers of electronic
appliances, furniture, apparels…etc. It identifies local influencers in rural areas and
provides them with a tablet with Boonbox app. These associates have e-catalogue in
multiple languages and book orders from rural customers by making them go through the
catalogues. They even collect cash and send them to the Inthree. Inthree uses Hub and
spoke models to deliver the products.
The products will be delivered to the house of the rural customer by Boonbox associates.
The company even established multilingual call centres to solve issues regarding returning
the product.
Accessibility can be improved by enhancing availability and convenience by overcoming

the above-mentioned challenges. It has been a major problem since many years that restrict
the success of companies in their rural endeavours. Co-creating and Collaborating will hold
key to the accessibility of products and services in rural markets.
70
6.4 Sector wise importance
•Banking •Insurance sector

•Automobiles
Acceptability Awareness
Affordability Accessibility
•Automobiles •Consumer
•Consumer durables
Durables •E-commerce
Figure 23 sector wise importance
All the 4A's are equally important for all the industries. However, the importance of each
of the 4A's changes with time depending on the life cycle and the penetration of the
industry. Figure 23 shows most important A's for different industries based on current
situations.
The banking industry has to concentrate on improving the acceptability of their services in
rural India. According to NABARD, there are around 88% of rural people have savings
A/C. The usage of these accounts has been minimal.
The banking sector has to leverage upon the awareness created by financial inclusion and
design customizable offerings so that its acceptability improves in rural hinterlands.
Automobiles have to cater to rugged and multiple needs of rural customers to improve their
acceptability and make them affordable to rural masses to win in BOP markets.
The insurance sector is still in the nascent stage in the rural areas and awareness has to play
a key role in improving the acceptability of this sector.
Consumer durables are nothing new to rural customers but have to improve their
affordability to penetrate into untapped rural markets.
71
The e-commerce industry is no longer a dream in rural markets due to the growing internet
and smartphone penetration. However, accessibility is the main factor that hinders the entry
and success of e-commerce firms.
72
CHAPTER 6
CONCLUSION
73
74
6 CONCLUSION
6.1 Summary
Indian rural markets are definitely going to be markets for companies looking for sustainable
growth in their top and bottom lines. There are tremendous challenges that these rural markets
pose that act as hindrances to the success of companies. ‘Customer centricity' is key to success
in the rural hinterlands. The 4A framework helps companies to achieve customer centricity in
every aspect of their business.
This study deals with identifying challenges that companies face under each of the 4A’s namely
Awareness, Acceptability, Affordability and Accessibility. It also suggests strategies to
overcome the challenges using the 4A framework.
Acceptability of an offering involves both functional and psychological acceptability.

Functional acceptability of an offering has been key to success in rural areas. ‘Value
Engineering' is one of the strategies to improve the functionality of the products for the value
conscious rural customer. However, the urbanisation led to the adoption of urban lifestyle by
rural people and the need for psychological acceptability is increasingly growing in these rural
hinterlands.
Affordability is one of the most important of the 4A’s and plays a major role in driving the
purchase of a product or service. It involves the ability to pay and willingness to pay of rural
customers. Ability to pay can be improved by designing an affordable offering and by
increasing the disposable income of rural households. Willingness to pay can be delivered by
designing an offering whose value surpasses the costs customers incurred.
Awareness in rural areas is not an easy task and involves overcoming challenges like low
literacy, limited mass media penetration and cultural differences. However a study of the target
markets and the use of conventional along with non-conventional media aids in spreading
awareness. The awareness campaigns should not only result in educating customers about
product and brand but also in building a positive attitude about the brand in minds of the
customers.
75
Accessibility has been one of the major problems for companies entering rural areas.
‘Co-creation’ and ‘Collaboration’ can enhance Accessibility in rural markets. (Refer to Figure
24)
Acceptability Value Engineering
Affordability Inclusive Marketing
Strategies for
the 4A
framework
Societal marketing &
Awareness
Customization of Content
Accessibility
Collaboration &
Co-creation
Figure 24 Strategies for 4A's of marketing in rural areas
6.2 Future Scope

The future research can be done in using the 4A framework in a particular industry. The impact
of technology on the 4A’s can also another area of research.
76
CHAPTER 7
BIBLIOGRAPHY
77
78
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Rural Marketing Mix Strategies

A Project as a Course requirement for

Master of Business Administration

Department of Management and Commerce

SRI SATHYA SAI INSTITUTE OF HIGHER LEARNING

PRASANTHI NILAYAM CAMPUS, PRASANTHI NILAYAM – 515 134

Anantapur District, Andhra Pradesh, India

Prof. Viveck Kapoor Dr. N. Siva Kumar

Project Supervisor Head of the Department

Place: Prasanthi Nilayam

Date: 20th December, 2018

The Project / Dissertation titled “Rural Marketing Mix Strategies” was

I take this opportunity to thank Dr. N. SivaKumar, Head of Department, Department of

2 THEORETICAL BACKGROUND ........................................................................... 11

2.1 Rural areas ................................................................................................................ 11

2.2 4P’s of marketing ..................................................................................................... 11

2.3 4A’s of marketing..................................................................................................... 11

3 LITERATURE REVIEW ........................................................................................... 15

3.1 Rural Consumer Behaviour ..................................................................................... 15

3.1.1 Profile of Rural customer .................................................................................. 15

3.1.2 Characteristics of Rural Customer ..................................................................... 16

3.1.3 Changing Rural Customer ................................................................................. 16

3.2 Issues and challenges of rural markets .................................................................. 18

3.2.1 Reaching rural customers .................................................................................. 18

3.2.2 Acquiring rural customers ................................................................................. 18

3.3.3 Retaining rural customers .................................................................................. 19

3.3 Strategies for Rural markets ................................................................................... 21

3.3.1 Mastering the rural customer reach ................................................................... 21

3.3.2 Mastering rural customer acquisition ................................................................ 21

3.3.3 Mastering rural customer retention.................................................................... 22

4.1 Nature of the study ............................................................................................... 27

4.2 Research objectives .............................................................................................. 27

4.3 Scope of the study................................................................................................. 27

4.4 Limitations of the study ....................................................................................... 28

5 ANALYSIS AND INTERPRETATION .................................................................... 31

5.2 Affordability ............................................................................................................ 39

5.3 Awareness ............................................................................................................... 49

5.4 Accessibility ............................................................................................................ 62

6.4 Sector wise importance ........................................................................................... 71

6.1 Summary ............................................................................................................. 75

6.2 Future Scope........................................................................................................... 76

Figure 1 Rural FMCG market ................................................................................................... 3

Key Words – Value engineering, Societal marketing, Inclusive marketing, Edutainment.

Figure 1 Rural FMCG market

Figure 2 FMCG sales

So it is clearly evident that the success of an FMCG company is dependent on its

Figure 3 Two wheelers zonal share

Figure 4 Telephone subscriptions

5) An increase in literacy rate, development in infrastructure, increase in government

Figure 5 Indian internet population

2.1 Rural areas

 A population of less than 5000

2.2 4P’s of marketing

2.3 4A’s of marketing

3.1 Rural Consumer Behaviour

3.1.1 Profile of Rural customer

3.1.2 Characteristics of Rural Customer

3.1.3 Changing Rural Customer

Discerning – The current empowered rural customer is ‘street-smart'. The availability of

3.2 Issues and challenges of rural markets

3.2.1 Reaching rural customers

3.2.2 Acquiring rural customers

3.3.3 Retaining rural customers