A Seminar Report On RURAL MARKETING Submitted in the partial fulfillment of the award of PG Degree of Master of Business Administration Session

2008-09 Submitted To: Submitted By: Department of Management Studies, Ravi MBA 4th sem. (Marketing) Jaipur

Executive Summary A debate continued for a long time amongst the Indian marketers, both practition ers & academicians, on the justification for the existence of the distinct discipline of rural marketing. Consequently, two schools of thought emerged. The first school belived that the products/services, marketing tools & strategies that are successful in urban are as, could be transplanted with little or no more modifications in rural areas. However, the s econd school saw a clear distinction between urban & rural India, & suggested a different approac h, skills, tools & strategies to be successful in rural markets. What differentiates the two markets is not mere income, but a host of other infr astructural & socio-cultural factors. Thus, the rural market cannot be tapped successfully wit h an urban marketing mindset & would definitely require its thorough understanding. In othe r words, the approach toward rural markets needs to be distinct from the one adopted for the urban markets. Thus, in a large rural economy like India s, rural marketing has emerged as an imp ortant & distinct internal sub-division within the marketing discipline. This sub-divisio n clearly highlights the differences between rural marketing & mainstream marketing.

Table of contents 1) Rural marketing 3 2) Evolution of rural marketing 4 3) Nature of rural market 8 4) Rural marketing transactional or developmental 9 5) Classification of rural consumers 11 6) Roadblocks of Indian Rural Markets 12 7) Attractiveness of rural market 14 8) Rural Vs Urban Marketing 19 9) Rural consumer behavior 22 10) 4 A s approach of Indian Rural Market 25 11) Rural marketing Mix 28 12) Marketing strategies to capture rural market 37 12.1.Product strategies 42 12.2.Pricing strategies 44 12.3.Promotion strategies 45 12.4.Distribution strategies 46 13) Media vehicles 53 13.1.Formal media 54 13.2.Informal/rural specific media 57 13.3.Choosing media vehicles 64 14) Conclusion 65 15) References 66

Rural Marketing Rural marketing involves the process of developing, pricing, promoting, distribu ting rural specific product and a service leading to exchange between rural and urban marke t which satisfies consumer demand and also achieves organizational objectives. URBAN RURAL RURAL URBAN RURAL RURAL It is a two-way marketing process wherein the transactions can be: 1. Urban to Rural: A major part of rural marketing falls into this category. It inv olves the selling of products and services by urban marketers in rural areas. These includ e: Pesticides, FMCG Products, Consumer durables, etc. 2. Rural to Urban: Transactions in this category basically fall under agricultural marketing where a rural producer seeks to sell his produce in an urban market. A n agent or a middleman plays a crucial role in the marketing process. The following are some of the important items sold from the rural to urban areas: seeds, fruits and vegeta bles, milk and related products, forest produce, spices, etc. 3. Rural to Rural: This includes the activities that take place between two village s in close proximity to each other. The transactions relate to the areas of expertise the particular village has. These include selling of agricultural tools, cattle, car ts and others to another village in its proximity.

Rural marketing requires the understanding of the complexities. Indian agricultu ral industry has been growing at a tremendous pace in the last few decades. The rural areas are c onsuming a large number of industrial and urban manufactured products. The rural agricultur al production and consumption process plays a predominant role in developing the Indian econom y. This has designed a new way for understanding a new process called Rural Marketing. The concept of rural marketing has to be distinguished from Agricultural marketi ng. Marketing is the process of identifying and satisfying customers needs and providing them with adequate after sales service. Rural marketing is different from agricultural marketing, w hich signifies marketing of rural products to the urban consumer or institutional markets. Rura l marketing basically deals with delivering manufactured or processed inputs or services to rural producers, the demand for which is basically a derived outcome. Rural marketing scientists also term it as developmental marketing, as the proce ss of rural marketing involves an urban to rural activity, which in turn is characterised by various peculiarities in terms of nature of market, products and processes. Rural market ing differs from agricultural or consumer products marketing in terms of the nature of transactio ns, which includes participants, products, modalities, norms and outcomes. The participant s in case of Rural Marketing would also be different they include input manufacturers, dealer s, farmers, opinion makers, government agencies and traders. Rural marketing needs to combine concerns for profit with a concern for the soci ety, besides being titled towards profit. Rural market for agricultural inputs is a case of m arket pull and not market push. Most of the jobs of marketing and selling are left to the local dea lers and retailers. The market for input gets interlocked with other markets like output, consumer g oods, money and labour. Rural marketing in India is not much developed there are many hindrances in the area of market, product design and positioning, pricing, distribution and promotion. Com panies need to understand rural marketing in a broader manner not only to survive and grow in t heir business, but also a means to the development of the rural economy. One has to have a stra tegic view of the rural markets so as to know and understand the markets well. In the context of rural marketing one has to understand the manipulation of marketing mix has to be prop erly

understood in terms of product usage. Product usage is central to price, distrib ution, promotion, branding, company image and more important farmer economics, thus any strategy i n rural marketing should be given due attention and importance by understanding the prod uct usage, all elements of marketing mix can be better organised and managed. Evolution of Rural Marketing PHASE ORIGIN FUNCTION MAJOR PRODUCTS SOURCE MARKET DESTINATION MARKET I Before Mid1960 (from independence Agricultural Marketing Agricultural Produce Rural Urban to green revolution) II Mid- Sixties (Green Marketing Of Agricultural Urban Rural revolution to Agricultural Inputs Pre-Inputs liberalization period) III Mid- Nineties Consumables (Post-Rural And Urban & Rural liberalization Marketing Durables For Rural period on 20th Consumption century) & Production IV 21st century Developmental All products & Urban & Urban & marketing services Rural Rural 1. Phase I ( from Independence to Green Revolution):

Before the advent of the Green revolution, the nature of rural market was altoge ther different. Rural marketing then referred to the marketing of rural products in r ural & urban products. 2. Phase II (Green Revolution to Pre-liberalization period): During these times, due to the advent & spread of the Green Revolution, rural ma rketing represented marketing of agriculture inputs in rural markets & marketing of rura l produce in urban areas. 3. Phase III (Post-liberalization period on 20th century): The third phase of rural marketing started after the liberalization of the India n economy. In this period, rural marketing represented the emerging, distinct activity of a ttracting & serving rural markets to fulfill the need & wants of rural households, peoples & their occupations. 4. Phase IV (21st century): Learning from its rural marketing experiences after the independence, the corpor ate world has finally realized the quick-fix solutions & piecemeal approaches will d eliver only limited results in the rural markets. And, if an organization wants to tap the real potential of the rural market, it needs to make a long-term commitment with this market. Its approach & strategies must not focus in just selling products & services, bu t they should also aim at creating an environment for this to happen. The objective of rural marketing in the current phase is the improvement of the quality of life by satisfying the needs & wants of the customers, not through atand-alone produc ts or services, but by presenting comprehensive & integrated solutions which might involve a set of interrelated products & services. Till recently, the focus of marketers in India was the urban consumer and by lar ge number specific efforts were made to reach the rural markets. But now it is felt that w ith the tempo of development accelerating in rural India, coupled with increase in purchasing pow er, because of scientific agriculture, the changing life style and consumption pattern of villa gers with increase in education, social mobility, improved means of transportations and communicati on and other penetrations of mass media such as television and its various satellite channels have exposed rural India to the outside world and hence their outlook to life has also change d. Because of all these factors, rural India in now attracting more and more marketers.

Increase in competition, saturated urban markets, more and move new products dem anding urban customers, made the companies to think about new potential markets. Thus, Indian rural markets have caught the attention of many companies, advertisers and multination al companies. According to a recent survey conducted by the National Council for Applied Econo mic Research (NCAER), the purchasing power of the rural people has increased due to increase in productivity and better price commanded by the agricultural products. By and lar ge this rise in purchasing power remains unexploited and with the growing reach of the televisio n, it is now quite easy for the marketers to capture these markets. Rural marketing has become the latest mantra of most corporate. Companies like H industan Lever, Colgate Palmolive, Britannia and even Multinational Companies (MNCs) like Pepsi, Coca Cola, L.G., Philips, Cavin Kare are all eyeing rural markets to capture the large Indian market. Coming to the frame work of Rural Marketing, Rural Marketing broadly involves re aching the rural customer, understanding their needs and wants, supply of goods and service s to meet their requirements, carrying out after sales service that leads to customer satisfacti on and repeat purchase/sales. Nature of Rural Market . Large, Diverse and Scattered Market: Rural market in India is large, and scatter ed into a number of regions. There may be less number of shops available to market products. . Major Income of Rural consumers is from Agriculture: Rural Prosperity is tied wi th agriculture prosperity. In the event of a crop failure, the income of the rural masses is directly affected. . Standard of Living and rising disposable income of the rural customers: It is known that majority of the rural population lives below poverty line and has low

literacy rate, low per capital income, societal backwardness, low savings, etc. But the new tax structure, good monsoon, government regulation on pricing has created disposable incomes. Today the rural customer spends money to get value and is aw are of the happening around him. . Traditional Outlook: Villages develop slowly and have a traditional outlook. Cha nge is a continuous process but most rural people accept change gradually. This is grad ually changing due to literacy especially in the youth who have begun to change the ou tlook in the villages. . Rising literacy levels: It is documented that approximately 45% of rural Indians are literate. Hence awareness has increases and the farmers are well-informed about the world around them. They are also educating themselves on the new technology arou nd them and aspiring for a better lifestyle. . Diverse socioeconomic background: Due to dispersion of geographical areas and uneven land fertility, rural people have disparate socioeconomic background, whi ch ultimately affects the rural market. . Infrastructure Facilities: The infrastructure facilities like cemented roads, wa rehouses, communication system, and financial facilities are inadequate in rural areas. He nce physical distribution is a challenge to marketers who have found innovative ways to market their products. Is rural marketing transactional or developmental in its approach? It is true, rural markets have become an attractive proposition for commercial b usiness organizations. The role of rural marketing as such is more developmental than transactional. It is more a process of delivering better standard of living and quality of life to the rural environment taking into consideration the prevailing village milieu.

Transactional Vs Developmental: For better comprehension of this role let us dis tinguish development marketing and transactional marketing. Table brings out the differen ces in brief. Transactional Vs Development Marketing S.No. Aspect Transactional Development 1. Concept Consumer orientation, Marketing concept Society orientation, societal concept 2. Role Stimulating and conversional marketing Catalytic and transformation agent 3. Focus Product-market fit Social change 4. Key task Product innovations and communications Social innovations and communications 5. Nature of activity Commercial Socio-cultural, economic 6. Participants Corporate enterprises, Sellers Government, voluntary agencies, corporate enterprises, benefactors 7. Offer Products and services Development projects/schemes/programs 8. Target group Buyers Beneficiaries and buyers 9. Communication Functional Developmental 10. Goal Profits Customer satisfaction Brand image Market development Corporate Image 11. Time-Frame Short-medium Medium-Long 12. Motivation Profit-motive Business policy Service-motive Ideological or Public policy Model: The model of rural marketing represents a combination of the transactiona l and developmental approaches. Rural marketing process is both a catalyst as well as an outcome of the general rural development process. Initiation and management of social and economic change in the

rural sector is the core of the rural marketing process. It becomes in this proc ess both benefactor and beneficiary. Innovation is the essence of marketing. Innovative methods of social change for successful transformation of traditional society are virtual. Such a change narr ows the rural-urban divide. The process of transformation can be only evolutionary and not revolutionary. Th e growth of the rural market can be a planned evolutionary process based on strate gic instruments of change rather than constitute just short-term opportunities for commercial gains. The exposure of ruralites to a variety of marketing transactions during the chan ge process puts them in the role of beneficiaries than of just `buyers' of modern i nputs and infrastructural services. Communication is the vital element of rural marketing. It should serve to resolv e social conflicts, encourage cooperation and strengthen competitive spirit during intera ctions between rural and urban as well as within rural areas. Another critical point fo r communication is the point of conversion of ruralite from an "induced beneficiar y" to an "autonomous buyer". Classification of rural consumers The rural consumers are classified into the following groups based on their econ omic status: The Affluent Group: They are cash rich farmers and a very few in number. They ha ve affordability but not form a demand base large enough for marketing firms to dep end on. Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this gr oup. The Middle Class: This is one of the largest segments for manufactured goods and is fast expanding. Farmers cultivating sugar cane in UP and Karnataka fall in this category.

The Poor: This constitutes a huge segment. Purchasing power is less, but strengt h is more. They receive the grants from government and reap the benefits of many s uch schemes and may move towards the middleclass. The farmers of Bihar and Orissa fa ll under this category. Roadblocks of Indian Rural Markets There are several roadblocks that make it difficult to progress in the rural mar ket. Marketers encounter a number of problems like dealing with physical distribution, logistic s, proper and effective deployment of sales force and effective marketing communication when t hey enter rural markets. The major problems are listed below. 1. Standard of living: The number of people below the poverty line is more in rural markets. Thus the market is also underdeveloped and marketing strategies have to be different from those used in urban marketing. 2. Low literacy levels: The low literacy levels in rural areas leads to a problem o f communication. Print media has less utility compared to the other media of communication. 3. Low per capita income: Agriculture is the main source of income and hence spendi ng capacity depends upon the agriculture produce. Demand may not be stable or regul ar. 4. Transportation and warehousing: Transportation is one of the biggest challenges in rural markets. As far as road transportation is concerned, about 50% of Indian v illages are connected by roads. However, the rest of the rural markets do not even have a proper road linkage which makes physical distribution a tough task. Many villages are l ocated in hilly terrains that make it difficult to connect them through roads. Most mar keters use tractors or bullock carts in rural areas to distribute their products. Warehousi ng is another major problem in rural areas, as there is hardly any organized agency to look after the storage issue. The services rendered by central warehousing corporatio n and state warehousing corporations are limited only to urban and suburban areas. 5. Ineffective distribution channels: The distribution chain is not very well organ ized and requires a large number of intermediaries, which in turn increases the cost and

creates administrative problems. Due to lack of proper infrastructure, manufactu rers are reluctant to open outlets in these areas. They are mainly dependent on dealers, who are not easily available for rural areas. This is a challenge to the marketers. 6. Many languages and diversity in culture: Factors like cultural congruence, diffe rent behaviour and language of the respective areas make it difficult to handle the c ustomers. Traits among the sales force are required to match the various requirements of t hese specific areas. 7. Lack of communication system: Quick communication is the need of the hour for smooth conduct of business, but it continues to be a far cry in rural areas due to lack of communication facilities like telegraph and telecommunication systems etc. The l iteracy rate in the rural areas is rather low and consumer s behaviour in these areas is traditional, which may be a problem for effective communication. 8. Spurious brands: Cost is an important factor that determines purchasing decision in rural areas. A lot of spurious brands or look-alikes are available, providing a low cost option to the rural customer. Many a time the rural customer may not be aware of the difference due to illiteracy. 9. Seasonal demand: Demand may be seasonal due to dependency on agricultural income . Harvest season might see an increase in disposable income and hence more purchas ing power. 10. Dispersed markets: Rural population is highly dispersed and requires a lot of marketing efforts in terms of distribution and communication. Attractiveness of rural market

1 2 3 4 5 6 7 8

Large population Rising prosperity Growth in consumption Life cycle changes Life cycle advantages Market growth rate higher than urban Rural marketing is not expensive Remoteness is no longer a problem

1. Large Population: The rural population is large and its growth rate is also high . Despite the rural urban migration, the rural areas continue to be the place of living ma jority of Indians. 2. Rising Rural Propensity:

INCOME GROUP 1994-95 2000-01 2006-07 ABOVE RS. 100,000 1.6 3.8 5.6 RS. 77,001-100,000 2.7 4.7 5.8 RS. 50,001-77,000 8.3 13.0 22.4 RS. 25,001-50,000 26.0 41.1 44.6 RS.25,000 & BELOW 61.4 37.4 20.2 Thus we see that population between income level of Rs. 25,000- 77,000 will incr ease from 34.3% in 1994-95 to 67.0% in 2006-07. The rural consuming class is increasi ng by about 3-4% per annum, which roughly translates into 1.2 million new consumers ye arly. 3. Growth in consumption: PER CAPITA HOUSEHOLD EXPENDITURE (IS RS.) LEVEL NO. STATES EXPENDITURE High (Above Rs 382/-) 7 Punjab 614 Kerala 604 Haryana 546 Rajasthan 452 Gujarat 416 Andhra Pradesh 386 Maharastra 384 Average (Rs. 382/-) 5 West Bengal 382 Orissa 381 Tamil Naidu 381 Uttar Pradesh 373 Karnataka 365 Low (Below Rs. 382/-) 3 Assam 338 Madhya Pradesh 326 Bihar 289 Distribution household s income wise (projection in Rs Crore) INCOME GROUPS 2001 02 2006 07 RURAL RURAL TOTAL NO. % TOTAL NO. % HIGH 0.26 0.07 2 6.9 0.52 0.12 23.1 MIDDLE 12.04 7.73 6 4.2 16.72 10.3 2 61.8 LOW 5.7 5.09 8 3.68 3.52 95.7

8.7 TOTAL 18.04 12.8 9 7 1.4 20.90 13.9 6 66.7 Spending pattern (Rural Household s in Rs.) ITEM % RICH POOR AVERAGE FOOD ARTICLES 4 4 147 73 95 TOILETRIES 2 0 67 33 43 WASHING MATERIAL 1 3 43 22 28 COSMETICS 1 0 33 17 21 OTC PRODUCTS 4 13 6 9 OTHERS 9 30 15 19 TOTAL 333 166 215 Average rural household spends on consumables excluding food grains, milk & vegetables are Rs. 215/-. 4. Life style changes: Income vs. usage of packed consumer goods (% of household using)

GOODS MONTHLY HOUSEHOLD INCOME (RS.) UP TO 350 351 750 751 1500 1501 + WASHING CAKES/BARS 60 78 86 91 TOILET SOAPS 57 72 89 93 TOOTH PASTE/POWDER 22 36 65 85 TALCUM POWDER 20 25 41 63 TEA (PACKAGED) 22 30 48 64 5. Life cycle advantage: STAGES IN LIFE CYCLE PRODUCT URBAN MARKET GROWTH RATE % RURAL Popular soaps Maturity 2 Growth Premium soaps Late growth 11 Early growth Washing powder Late growth 6 Early growth Skin creams Maturity 1.1 Growth Talcum powder Maturity 4 Growth 6. Market growth rates higher: Growth rates of the FMCG market and the durable market are higher in rural areas for many products. The rural market share will be more than 50% for the products like toilet soaps, body talcum powder, cooking medium (oil), cooking medium (vanaspati), tea, cigarettes and hair oil. 7. Rural marketing is not expensive: Conventional wisdom dictates that since rural consumers are dispersed, reaching them is costly. However, new research indicate s that the selling in Rural India is not expensive. According to one research it costs roug hly Rs.1 Crore to promote a consumer durable inside a state. This includes the expenses o f advertising in vernacular newspapers, television spots, in-cinema advertising, r adio, van operations and merchandising and point of purchase promotion. Campaign like this , which can reach millions, costs twice as much in urban area. 8. Remoteness is no longer a problem: Remoteness in a problem but not insurmountabl e. The rural distribution is not much developed for the reasons,

. Lack of proper infrastructure such as all-weather roads, electrification and sanitation, and . Lack of marketer s imagination and initiative. Marketers have so far, failed in analyzing the rural side and exploiting rural I ndia s traditional selling system-Haats & Melas.Their near obsession with just duplicat ing the urban-type network and that too with very limited success, has kept them blind t o the potential of these two outlets. RURAL VS URBAN MARKETING-SUMMARY NO. ASPECT URBAN RURAL 1 PHILOSOPHY Marketing & Societal Concepts & Relationship Marketing Marketing & Societal Concepts, Development Marketing & Relationship Marketing 2 A) MARKET

B) DEMAND High Low C) COMPETITION Among Units In Organized Sector Mostly From Unorganized Units CONSUMERS LOCATION Concentrated Widely Spread LITERACY High Low INCOME High Low EXPENDITURE Planned, Even Seasonal, Variation NEEDS High Level Low Level INNOVATION/ADOPTION Faster Slow 3 PRODUCT AWARENESS High Low CONCEPT Known Less Known POSITIONING Easy Difficult USAGE METHOD Easily Grasped Difficult To Grasp QUALITY PREFERENCE Good Moderate 4 PRICE SENSITIVE Yes Very much LEVEL DESIRED Medium-high Medium-low 5 DISTRIBUTION CHANNELS Wholesalers, stockists, retailer, supermarket, specialty stores, & authorised showrooms Village shops, Haats TRANSPORT FACILITIES Good Average PRODUCT AVAILABILITY High Limited 6 PROMOTION ADVERTISING Print, audio visual media, outdoors, exhibitions etc. few languages TV, radio, print media to some extent. More languages PERSONAL SELLING Door-to-door, frequently Occasionally SALES PROMOTION Contests, gifts, price discount Gifts, price discounts PUBLICITY Good opportunities Less opportunities Special Products for Rural Markets:

Rural Transporter: Mahindra & Mahindra is busy developing the prototype of what it calls a Rural Transporter basically a hybrid between a tractor and a rural transpo rt vehicle. The product at 20-25 HP will be targeted at those who cannot afford a n ormal tractor and would also fulfill the need of family transporter that could take in the rural roughs but would be much more comfortable and safer than the conventional tracto r-trolley. Sampoorna TV: LG Electronics, the Korean firm has rejigged the TV to appeal to l ocal needs. It spent Rs. 21 Lacs to develop a set that would have on-screen displays in the vernacular languages of Hindi, Tamil and Bengali. The logic, rural consumers unf amiliar with English would still be able to use the TV without being intimidated. Titan Watches: A recent NCAER study revealed that there is a great potential for watches in rural areas. In fact it is considered to be a high priority list. It was also found that a rural consumer looks for the ruggedness of the watch more than the urban consumer does . He prefers thick watches than slim watches. The biggest problem that the Marketers are facing in the Rural Markets is Of IMI TATIONS. Imitations may result in two types of goods depending upon the purpose, commitme nt, and competence of imitator. A poor imitator will end up in producing deceptive, spur ious, fake, copycat products. He dupes the gullible customer by offering products having clo se resemblance with the original. In quality, it is poor cousin to the original. On the other hand, a poor imitator may even produce an improved version of the original product. In this scenario the job of the Marketer becomes even more difficult in the sens e that he has not to fight other competitors but also the imitated products. The advantages that these products enjoy in the rural markets are that the Imita tors who are in the villages are making these and they are offering More Margins & Better credit Facilities. To solve this problem the Marketer has to educate the consumer about his product and show him the benefits of his products over the imitated ones. Need-Product Relationships and the changes happening in Rural India Needs Old Products New Products

Brushing Teeth Neem sticks, Charcoal, Rocksalt, Husk Toothpaste, tooth powder Washing Vessels Coconut fiber, Earthy materials, Brick Powder, Ash Washing Powders, soaps and liquids Transport Bullock Cart, Horses, Donkeys Tractors, LCVs, Mopeds, Scooters, Motor cycles Irrigation Wells, Canals, Water lifters, Wind Mills Bore-wells, Motors, Power Generators, Pump Sets Hair Wash Shikakai powder, Retha, Besan Shampoos and hair care soaps

Rural Consumer Behaviour Consumer Buyer Behaviour refers to the buying behaviour of final consumers -indi viduals and households who buy goods and services for personal consumption. All of these fin al consumers combined make up the consumer market. The consumer market in this case is Rural India. About 70% of India s population l ives in rural areas. There are more than 600,000 villages in the country as against about 300 cities and 4600 towns. Consumers in this huge segment have displayed vast differences in their p urchase decisions and the product use. Villagers react differently to different products , colours, sizes, etc. in different parts of India. Thus utmost care in terms of understanding con sumer psyche needs to be taken while marketing products to rural India. Thus, it is important to study the thought process that goes into making a purch ase decision, so that marketers can reach this huge untapped segment. Factors influencing buying behavior The various factors that affect buying behavior of in rural India are: 1. Environmental of the consumer -The environment or the surroundings, within which the consumer lives, has a very strong influence on the buyer behavior, egs . Electrification, water supply affects demand for durables. 2. Geographic influences -The geographic location in which the rural consumer is located also speaks about the thought process of the consumer. For instance, vil lages in South India accept technology quicker than in other parts of India. Thus, HMT sells more winding watches in the north while they sell more quartz watches down south. 3. Family it is an important buying decision making organization in consumer markets. Family size & the roles played by family members exercise considerable influence on the purchase decisions. Industry observers are increasingly realizi ng that at times, purchase of durable has less to do with income, but has more to d o

with the size of the family & that s where rural India with joint family structure s, becomes an attractive proposition. 4. Economic factors The quantum of income & the earning stream are one of the major deciding factors, which determine to a great extent, what the customer wil l be able to buy. Many people in the rural market are below poverty line & for large number of people, agriculture is the primary occupation. More than 70% of the people are in small-scale agricultural operation. These factors affect the purch ase decision. 5. Place of purchase (60% prefer HAATS due to better quality, variety & price) Companies need to assess the influence of retailers on both consumers at village shops and at haats. 6. Creative use of product ex Godrej hair dye being used as a paint to colour horns of oxen, Washing machine being used for churning lassi. The study of product end provides indicators to the company on the need for education and also for new product ideas. 7. Brand preference and loyalty (80% of sale is branded items in 16 product categories) Cultural factors influencing consumer behaviour Cultural factors exert the broadest and deepest influence on consumer behaviour. The marketer needs to understand the role played by the buyer s culture. Culture is the most ba sic element that shapes a person s wants and behaviour. In India, there are so many different cultures, which only goes on to make the m arketer s job tougher. Some of the few cultural factors that influence buyer behaviour are: 1. Product (colour, size, design, and shape): There are many examples that support this point. a. For example, the Tata Sumo, which was launched in rural India in a white colour, was not well accepted. But however, when the same Sumo was re

launched as Spacio (a different name) and in a bright yellow colour, with a larg er seating capacity and ability to transport good, the acceptance was higher. b. Another good example would be Philips audio systems. Urban India looks at technology with the viewpoint of the smaller the better . However, in rural India, the viewpoint is totally opposite. That is the main reason for the large acceptance of big audio systems. Thus Philips makes audio systems, which are big in size and get accepted in rural India by their sheer size. 2. Social practices: There are so many different cultures, and each culture exhibit s different social practices. For example, in a few villages they have common bath areas. Villagers used to buy one Lifebuoy cake and cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram soap bars, which could be used individually. 3. Decision-making by male head: The male in Indian culture has always been given t he designation of key decision maker. For example, the Mukhiya s opinion (Head of the village), in most cases, is shared with the rest of the village. Even in a house the male head is the final decision maker. In rural areas, this trend is very prominent. 4. Changes in saving and investment patterns From gold, land, to tractors, VCR s, LCV s

4 A s approach of Indian Rural Market The rural market may be appealing but it is not without its problems: Low per ca pita disposable incomes that is half the urban disposable income; large number of daily wage ear ners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harves ts and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNC s are meeting the consequent challenges of availability, affor dability, acceptability and awareness (the so-called 4 A s) Availability The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challeng e to regularly reach products to the far-flung villages. Any serious marketer must strive to re ach at least 13,113 villages with a population of more than 5,000. Marketers must trade off t he distribution cost with incremental market saturation. Over the years, India's largest MNC, Hi ndustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockiest use autorickshaws, bullock-carts and even b oats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as r ural and semiurban market. To tap these unexplored country markets, LG has set up 45 area off ices and 59 rural/remote area offices.

Affordability The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of who are o n daily wages. Some companies have addressed the affordability problem by introducing small uni t packs. Most of the shampoos are available in smaller packs. Fair and lovely was launche d in a smaller pack. Colgate toothpaste launched its smaller packs to cater to the travelling s egment and the rural consumers.Godrej recently introduced three brands of Cinthol, Fair Glow an d Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and U ttar Pradesh the so-called `Bimaru' States. Hindustan Lever, among the first MNC s to realize the potential of India's rural m arket, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm . The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability i ssue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative ha s paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also int roduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multi serve sachet of 200 gm p riced at Rs 15. Acceptability The third challenge is to gain acceptability for the product or service. Therefo re, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customized TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very fi rst year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provi des low-cost ice boxes a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3. 5 crores in total premium. The company tied up with non-governmental organizations and offer ed reasonably-priced policies in the nature of group insurance covers. With large p arts of rural India inaccessible to conventional advertising media only 41 per cent rural hous eholds have access to TV building awareness is another challenge. Fortunately, however, the rural

consumer has the same likes as the urban consumer the

movies and music

and for both

urban and rural consumer, the family is the key unit of identity. However, the r ural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consump tion of branded products is treated as a special treat or luxury. Awareness Brand awareness is another challenge. Fortunately, however, the rural consumer h as the same likes as the urban consumer movies and music and for both the urban and rural co nsumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festival s and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is t reated as a special treat or indulgence. Hindustan Lever relies heavily on its own company-organized media. These are pro motional events organized by stockiest. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their la nguage. Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of r ural households. It doubled it s spend on advertising on Doordarshan, which alone reach ed 41 per cent of rural households. It has also used banners, posters and tapped all the l ocal forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertis ing stressed its `magical' price point of Rs 5 per bottle in all media. LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips I ndia uses wall writing and radio advertising to drive its growth in rural areas. The key dilemma for MNC s ready to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins.

Evolving a New Marketing Mix for Selling to Rural Indians 12.2% of the world lives in Rural India. Put in a different context, this works out to 1 in 8 people on Earth. Being able to successfully tap this growing market is every marketer s drea m. However, myths abound. India s rural markets are often misunderstood. A clear distinction needs t o be made with regard to the reality versus the image of rural India. If such a distinction is not mad e, we will be unable to distinguish between the serpent and the rope and the rope and the serpent. The rural market is not homogeneous. Though the aggregate size is very large, in dividual subsets of this market tend to be rather small and disparate. Geographical, demographical, stati stical, logistical differences are very apparent. Positioning and realities regarding the potential of each of these market segments differ and lie at the very core of forming the strategy for the rural m arkets. The face of Indian agriculture is changing from dry land and irrigated agricultu re into high-tech and low-tech agriculture. Farmers in states like Maharashtra and Andhra Pradesh have reaped the benefits of adopting new age farming practices, including green house cultivation, fert-irri gation and hydroponics. This has radically changed the economics of farming, with the investment in thes e systems lowering the cost of cultivation, increasing yields due to integrated crop management practic es and reducing the dependence on rainfall. As a result, disposable income has grown sharply. The as pirants are becoming climbers showing a sustained economic upturn as purchasing power is increasing i n the rural markets. The proportion of very rich has increased five-fold. The growing incomes have mo dified demand patterns and buyer behaviour. Moreover, the need for a product or service is now adequately backed up with the capacity, ability and willingness to pay. However, the market still remains largely unexploited. At most times, potential markets need to be found and at times, even created. Such creation of demand needs efficient man agement of the supply chain. To increase market share, behavioural change needs to be at the fo refront of any strategy. Further, due to the diversity of this market, marketers need to think, plan and act locally. It is therefore essential to develop an accurate Marketing Mix for selling to ru ral Indians.

Product The Rural market is not a homogenous set of customers with preferences frozen in time. When developing products in any category, marketers must identify the typical rural s pecific needs. Urban products cannot be dumped onto rural markets without modifications. Tailor-made products are better received by the rural audience as the consumers feel empowered and tend to denti fy with the offering. For instance, shampoos or soaps with distinctive, strong rose or jasmine perfume s are very popular with the rural women in South India. The urban women do not identify as strongly with these perfumes. Sachetization is also a distinctly rural-driven phenomenon. As demand in several categories is being created, intensity of use is quite low. On average, rural folk would use a shamp oo only once a week. Habits take time to change and making unit sachet packs affordable is the key to inducing trial and purchase. Systematic, in-depth research that can help understand the depths of the mind of the villagers, their buying criteria, purchase patterns and purchasing power are an essential i nput while developing rural specific products or services. A common error has been to launch a completely stripped down version of the urba n product in the rural market, with the objective of offering the lowest possible price. This is not wh at a rural consumer wants. What is required is to introduce a product with essential features, whose needs ar e recognized and for which the consumer is willing to pay (value-adding features). Product developers should aim at eliminating all the cost-adding features, i.e., features which a consumer is unw illing to pay for as he sees no obvious utility. This would redefine value in the minds of the consumer and tre mendously increase product acceptability. Product development is severely constrained by legislation in the case of agricu ltural inputs like fertilizers, insecticides and pesticides. In the case of fertilizers for instanc e, though levels of deficiency of nutrients have increased significantly over the past decade, no significant c hanges in formulations notified under the Fertilizer Control Order have taken place. This has severely restricted the availability of cost effective specialty fertilizers of global standards to Indian farmers. T echnological know-how for manufacture of such fertilizers exists within the country. However, farmers usin g modern farming practices are unable to get an assured supply of such farm inputs due to draconi an legislation. A move to liberalize the sector could perhaps consider the accepted worldwide norm of allo wing manufacturers

with a strong R&D base to decide their own formulations with the government mach inery conducting checks on market samples of finished products to ensure that they live up to the labelled specifications.

This would be a major policy initiative that would give a huge impetus to innova tive product development in the farm sector. Product life cycles as are becoming shorter and these are having their impact on company life cycles. Thus for any company wishing to develop its product portfolio, allegiance to the classic American P-AL Principle of Partnership - Alliances - Linkages is a basis for survival. Pricing Every marketer must realize that the rural consumer is not a miser. He is not si mply looking for the cheapest product in every category. He understands and demands value for mon ey in every purchase that he makes. Pricing therefore is a direct function of factors includ ing cost-benefit advantage and opportunity cost. Pricing offered to consumers should be for value offerings that are affordable. Price sensitivity is extremely high and comparison with competit ive prices is common. Consumers seem to create narrow psychological price bands in their minds for product groups and price elasticity beyond the extreme price points is very high . The perceived utility or value of the product or service is the ultimate decision making facto r. It is certain however, that buying cheap is not the primary objective. Rather, i t is buying smart . A study revealed that the average rural consumer takes approximately 2 years to de cide on buying a watch! He will not do so unless he is totally convinced that he is getting value for Mo ney. Impulse buys and purchases for conspicuous consumption are also extremely few and far Between con sidering the value for money factor that reigns supreme in most rural purchase decisions. It must be remembered that the rural consumer does not have a budget problem. He has a cash flow problem. This is because the village folk receive funds only twice a year. At th ese times, he is capable of making high volume purchases. At all times, however, the unit price is critical and so is the pack size. Because of this, in the lean season when there is a cash flow crunch, marketers need to provide financial products, schemes or solutions that suit the needs of the rural population. Promotions & Advertising There are a lot of barriers that militate against homogenous media and message d elivery. These barriers stem from the fact that rural markets vary immensely in terms of tastes, habits and preferences leading to different expectations of every segment of the population.

However, one fact is certain across all areas. The rural consumer likes to touch and feel a product before making a choice. Demonstrations are undoubtedly the most effective promotional t ool that shapes purchase decisions of the rural population. Demonstrations establish the credent ials of any new technology used in developing the product. In today s information era, it is very important for companies to wise-up on emerg ing technologies. It has in fact become a medium to attract larger audiences for a product demonstrat ion. Technology must be used to prepare a database of customers and their requirements. The use of vi deo using mobile vans and even large screen video walls at events should be arranged. The classic conundrums of reach and coverage of the media are shattered. Several creative communication media have been used by various companies to tackle the problem of having to use visual communication and non-verbal communication to reach the rural audience. T his is required because a large proportion of the rural population cannot read or write. Allianc es with cottage industries, dharmsalas, panchayats, post offices and police stations for advertising have al so helped immensely. More importantly, in rural India, experience has proved time and time again that word of mouth is the key influencer. Intermediaries are the foundation to rural distribution. If the intermediary und erstands and is constantly reminded about your product, then the end user will not be allowed to forget. Th e companies must reinforce this highly effective medium and use all their innovation and money to m develop more dramatic point of sale and point of contact material. This becomes all the more important when in rural India, more often than not, the overlap between the product categories sold in a single outlet in tremendous. For instance, a store may call itself as a grocery store but will st ock everything from groceries to vegetables to fertilizers and may at times even stock medicines. In such cases, the point at which the customer actually comes in contact with a product may not be the point at which the sale is affected. The re-use capacity and colour of the container in which the product is packed i s also a crucial factor. In fact, reusable packaging is considered a major aid in promoting sales for produc ts in the rural market. Consumer and Trade schemes that Incentivise Spending using discount coupons, off season discounts, free samples, etc. encourage spending. Lucky draws and gift schemes are a major hit in most states.

The use of local idioms and colloquial expressions are an excellent way to strik e a rapport with the rural consumer and must be borne in mind when developing media plans and public relati ons programmes. No high voltage publicity is required. The rural consumer is very down to earth but equally discerning and marketers need to step into the shoes of the rural folk while creating produ ct promotion campaigns. Another unique feature of rural markets is that the Decision making process is c ollective. The persons involved in the purchase process -influencer, decider, buyer, one who pays can a ll be different. So marketers must address brand messages in their campaigns at several levels. Apar t from regular household goods, several agribusiness companies have also started providing gift schemes with offers for free jewellery that influences the ladies to pressure the farmers to purchas e agricultural inputs from select companies. This promotion strategy thus makes women influence purchase de cisions that they would ordinarily not be involved in. Youth power is becoming increasingly evident in villages. Rural youth bring bran d knowledge to the households. This has forced several companies to change the focus and positionin g of their products and services towards this segment that is growing in absolute number and relative in fluence. There are other attributes in the promotion strategy which are explained as unde r: 1. Mass media: In the present world mass media is a powerful medium of communica tion. The following are the mass media generally used: Television. Cinema Radio Print media: Handbills and Booklets, posters, stickers, banners, etc. 2. Personal selling and opinion leaders: In personal selling it is required that the potential users are identified and awareness is created among them about the product, its features, uses and benefits. This can be achieved only by personal selling by highly motivated sales person. In fact the word of mouth information holds lot validity in rural areas even today. This is the reason why opinion leaders and word of mouth are thriving among rural consumers. An opinion leader in rural areas can be defined as a person who is considered to be knowled geable and is consulted by others and his advice is normally followed. The opinion leaders may be big landlords or politicians or progressive farmers.

3. Special campaigns: During crop harvest and marketing seasons it is beneficial to take up special promotion campaigns in rural areas. Tractor owners (tonee) conducted by MRF Limited is one such example. Brooks Bond carries out marches in rural areas with band, m usic and caparisoned elephants to promote their brand of tea. Mandi and Mela magic At last count, India witnessed over 50,000 melas. Of these 25,000 meals are held to signify religious, cultural festivals as well as local fairs and events. On an average, visitors at these melas spend between Rs. 5,000 to Rs. 50,000 a day. For example, 3 lakh people visited the annual mel a at Navchadi which lasts for 7 days in Meerut. The largest such mela is the Maha Kumbh Mela which i s visited by an average of 12 crore people. There is however, a caveat when an organization is considering using mela for ma rketing their products. Is the audience at this mela fit for promotion of the product at hand? What are the psychographics of this audience? What is the motivational and behavioural impetus that brings visitors to each of these melas. On considering these questions, it has been observed that melas are fit to gener ate product exposure, package familiarity, brand reminder and word of mouth. However, for products tha t need concept marketing and those that have high prices, such melas are not suitable promotion media. This is because the time and the mood of the people that visit these melas are not right to dige st technical information or for making large purchases. People come to melas to have a good time and are not reminded of such high technology or high priced products when they return home. In the words of M r. Neville Gomes, Managing Director of Multimedia Aquarius, promotion at melas is like a one night stand . There will be no reminder later. Thus, a large amount of qualitative judgment is indeed in planning promotions at melas by media planners. Place place is the major reason behind the evolution of rural marketing as a distinct discipline. A village as a place for promotion, distribution & consumption is very different from a town or city, thus the general marketing theories can t be applied directly in rural markets. Reaching the right place is the toughest part in today s rural marketing, as most of the products reach up to the nearest townships of any village, but due to higher distribution costs, t hese products fails to reach the village as the distribution channel fails to put in the required efforts. Mo st of the times, the rural

retailers themselves go to the urban areas to procure these goods. Rural markets imply complex logistical challenges that show up as high distribution costs. Significance of Distribution No matter how well devised a company s product, pricing or promotion strategy, the most crucial link in ensuring the success of rural marketing efforts is distribution. Distribution mu st be strengthened and this would raise investment cost barriers for new entrants. In Rural India, the selection and use of distribution channels is a nightmare. T he reason for this is very clear when we consider that on an average, Urban and Rural India both have appro ximately 3 million retail outlets. However, Urban India has only 4,000 towns where these outlets ar e located. On the other hand, Rural India s 3 million outlets are located in 6.3 lakh villages. Thus, mark eters are faced with the problem of feeding 3 million shops located in vastly diverse areas each of which records an average sale of only Rs.5,000 per outlet. Further compounding this problem is the fact that e ven this meagre sale is mostly on credit. The diversity in the distribution of shops is the self-limitin g factor in terms of servicing the rural distribution network.

The distribution of outlets however shows that a marketer need not be present in all markets at all times. Being present in 6 lakh villages is virtually impossible for an organization of any size. Rural wealth and demand is concentrated typically at satellite towns, district headquarters, asse mbly markets and such central locations. Rural distribution has a rigid hierarchy of markets that make channel decisions relatively structured. It is essential for rural marketing companies to understand this hierarchy. Rura l folk are habituated to travelling once a week for their weekly purchases to a satellite town. They do n ot expect such items to be present in every village. For durables where the outlay involved is typically large, the purchase would be made in an assembly market for reasons of choice and availability of adequate cash flow. This is due to the fact that it is at assembly markets that auction yards are present where the farmers congregate to sell their output. After such sale of produce, they are cash rich and can afford to make such purchases. It is therefore not necessary for a marketer of TV sets to take their distribution channel all the way down to the village shop. A TV will not be sold there as the cash flow does not exist at that point in the hierarchy of markets. A television distributor must be present at assembly markets which a re much smaller in number, more controllable, easier to reach and service. Keeping the hierarchy in mind will help decide the optimum level of penetration required to reach a critical mass of rural cons umers. Haats Haats are the nerve centre of Rural India. They are a readymade distribution net work embedded in the fabric of rural society for over 1000 years. They have been held on a regular ba sis across the length and breadth of the country for over 1000 years. Right from the time of Chandragupta Maurya, Haats are seen as a place for social, cultural and economic interchange.

One in every five villages with a population of over 2000 has a haat. In village s with less than 2000 people this figure reduces to 1 in 20 villages. Typically, an average haat will have close to 300 stalls. A haat usually serves around 5000 visitors. Considering that the average populatio n of an Indian village is approximately 1000, each haat serves 5 villages. A study estimates that 47,000 h aats are conducted in rural India. These rural super markets are much larger than all the world's K-ma rts and Wal-marts put together. A lot of re-distribution also occurs through haats. This is because, a large num ber of retailers and subwholesalers buy from haats for their village stores. What is most attractive to marketers is that 90% + of sales in haats are on cash basis. Traditionally, in village shops a lot of credi t sales occur due to the fact that in a small geographic area of a village, everybody knows everybody. Conside ring that over 5000 visit a haat from 5 villages, the system gets derelationalised. Apart from the 9 0% cash sale, 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit. Also attractive to companies wishing to use the system is the low selling overheads. Participation fees at haats are a flat Re.1 to Rs.5 per stall and this rate is common to a giant like Hindustan Lever and the smallest local selle r. Distribution costs must be reduced through optimum utilization of the network. T hus, incorporating haats in the distribution strategy of a rural marketing organization selling con sumer goods and FMCG products (typically once a week purchase items) is a tremendous opportunity. Perhaps the other most important factor to consider while developing rural distr ibution strategy is that the move from transactional marketing to relationship marketing is most evident in the village market. A strong bond needs to be created with every consumer even in the remotest village and the smallest town. Marketing in Rural India is undoubtedly a long-haul exercise and one that involv es great expense. Only those with a strong mind, a tough heart and stiff hands survive. There is also a need to realise that the dealer is the company's "unpaid" sales force. It is essential to educate and involve him as he is the local company representative and is the only member in the channel of distribution that is in direct contact with the final consumer. T he dealers' feedback needs to be obtained as the direction for future strategy emanates here. MARKRTING STRATEGIES TO CAPTURE RURAL INDIA

. SEGMENTATION OF RURAL MARKET The first step is to develop & implement any strategy for the rural market shoul d include the appropriate segmentation of the rural market. The important thing is that approp riate segmentation basis need to be applied. Different product categories have differe nt rural markets to cater to & these can be selected by applying different criteria of segmentati on. The organization can do the following thing to start with: . Focus on select markets. . Focus on select villages. ..BY COMMUNICATING AND CHANGING QUALITY PERCEPTION Companies are coming up with new technology and they are properly communicating it to the customer. There is a trade of between Quality a customer perceives and a company wants to communicate. Thus, this positioning of technology is very crucial. The perceptio n of the Indian about the desired product is changing. Now they know the difference between the products and the utilities derived out of it. As a rural Indian customer always wanted value for money with the changed perception, one can notice difference in current market scenario. ..BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local lang uage for promoting their products. They have started selling the concept of quality with proper communication. Their main focus is to change the Indian customer outlook about q uality. With their promotion, rural customer started asking for value for money. ..BY TARGET CHANGING PERCEPTION

If one go to villages they will see that villagers using Toothpaste, even when t hey can use Neem or Babool sticks or Gudakhu, villagers are using soaps like Nima rose, Breeze, C inthol etc. even when they can use locally manufactured very low priced soaps. Villagers are constantly looking forward for new branded products. What can one infer from these incident s, is the paradigm changing and customer no longer price sensitive? Indian customer was ne ver price sensitive, but they want value for money. They are ready to pay premium for the product if the product is offering some extra utility for the premium. ..BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hol d on the people. Cultural values play major role in deciding what to buy. Moreover, rural people are emotional and sensitive. Thus, to promote their brands, they are exploiting soci al and cultural values. ..BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. They do not see any value in frills associat ed with the products. They aim for the basic functionality. However, if the seller provides frills free of cost they are happy with that. They are happy with such a high technology that can fu lfil their need. As "Motorola" has launched, seven models of Cellular Phones of high technology b ut none took off. On the other hand, "Nokia" has launched a simple product, which has ca ptured the market. ..BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS Companies are picking up Indian models, actors for advertisements as this helps them to show themselves as an Indian company. Diana Hyden and Shahrukh Khan are chosen as a b rand ambassador for MNC quartz clock maker "OMEGA" even though when they have models like Cindy Crawford. ..BY ASSOCIATING THEMSELVES WITH INDIA

MNCs are associating themselves with India by talking about India, by explicitly saying that they are Indian. M-TV during Independence Day and Republic daytime make their lo go with Indian tri-colour. Nokia has designed a new cellular phone 5110, with the India tri-colour and a ringing tone of "Sare Jahan se achcha". ..BY PROMOTING INDIAN SPORTS TEAM Companies are promoting Indian sports teams so that they can associate themselve s with India. With this, they influence Indian mindset. LG has launched a campaign "LG ki Dua, all the best". ITC is promoting Indian cricket team for years; during world cup they hav e launched a campaign "Jeeta hai jitega apna Hindustan India India India". Similarly, Whirlpo ol has also launched a campaign during world cup. ..BY TALKING ABOUT A NORMAL INDIAN Companies are now talking about normal India. It is a normal tendency of an Indi an to try to associate him/her with the product. If he/she can visualize himself/herself with the product, he /she become loyal to it. That is why companies like Daewoo based their advertise ments on a normal Indian family. ..BY DEVELOPING RURAL-SPECIFIC PRODUCTS Many companies are developing rural-specific products. Keeping into consideratio n the requirements, a firm develops these products. Electrolux is working on a made-fo r India fridge designed to serve basic purposes: chill drinking water, keep cooked food fresh, and to withstand long power cuts. ..BY GIVING INDIAN WORDS FOR BRANDS

Companies use Indian words for brands. Like LG has used India brand name "Sampoo rna" for its newly launched TV. The word is a part of the Bengali, Hindi, Marathi and Tam il tongue. In the past one year, LG has sold one lakh 20-inch Sampoorna TVs, all in towns with a population of around 10,000. ..BY ACQUIRING INDIAN BRANDS As Indian brands are operating in India for a long time and they enjoy a good re putation in India. MNCs have found that it is much easier for them to operate in India if th ey acquire an Established Indian Brand. Electrolux has acquired two Indian brands Kelvinator a nd Allwyn this has gave them the well-established distribution channel. As well as trust o f people, as people believe these brands. Similarly Coke has acquired Thumps up, Gold Spot, C itra and Limca so that they can kill these brands, but later on they realized that to sur vive in the market and to compete with their competitor they have to rejuvenate these brands. ..BY EFFECTIVE MEDIA COMMUNICATION Media Rural marketing is being used by companies. They can either go for the tra ditional media or the modern media. The traditional media include melas, puppetry, folk t heatre etc. while the modern media includes TV, radio, and e-chaupal. LIC uses puppets to ed ucate rural masses about its insurance policies. Govt of India uses puppetry in its campaign s to press ahead social issues. Brook Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in Etawah district. In between such a show, the lights are switched of and a torch is flashed in the dark (EVEREADYs tact). ..BY ADOPTING LOCALISED WAY OF DISTRIBUTING Proper distribution channels are recognized by companies. The distribution chann el could be big scale Super markets; they thought that a similar system can be grown in Indi a. However, they were wrong; soon they realized that to succeed in India they have to reach the nook and the corner of the country. They have to reach the "local Paan wala, Local Baniya " only they can succeed. MNC shoe giants, Adidas, Reebok, and Nike started with exclusive stores but soon

they realized that they do not enjoy much Brand Equity in India, and to capture the market share in India they have to go the local market shoe sellers. They have to reach to local cities with low priced products. ..BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES MNCs have realized that in India celebrities enjoyed a great popularity so they now associate themselves with Indian celebrities. Recently Luxor Writing Instruments Ltd. a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of Parker Sonnet Hussain special e dition fountain pens, priced at Rs. 5000. This pen is signed by Mr. Makbul Fida Hussain a renowned painter who has created "Gajgamini" range of paintings. Companies are promoting players like Bhaichung Bhutia, who is promoted by Reebok, so that they can associate their na me with players like him and get popularity. ..MELAS Melas are places where villagers gather once in a while for shopping. Companies take advantage of such events to market their products. Dabur uses these events to se ll products like JANAM GHUTI (Gripe water). NCAER estimates that around half of items sold in the se melas are FMCG products and consumer durables. Escorts also display its products like tractors and motorcycles in such melas. ..PAINTINGS A picture is worth thousand words. The message is simple and clean. Rural people like the sight of bright colors. COKE, PEPSI and TATA traders advertise their products through paintings. Product Strategies

The specific strategies, which can be employed to develop or modify the products to targets the rural market, can be classified as follows: .1. Small unit packing: Given the low per capita income & purchasing habits of t he rural consumers, small unit packages stand a good chance of acceptance in rural market . Single serve packets or sachets are enormously popular in India. They allow consumers to buy only what they need, experiment with new products, & conserve cash at the same time. This method has been tested by products life shampoos, pickles, biscuits, Vicks cough drops in single tablets, tooth paste, etc. Small packing s stand a good chance of acceptanc e in rural markets. The advantage is that the price is low and the rural consumer can easil y afford it. Also the Red Label Rs. 3.00 pack has more sales as compared to the large pack. T his is because it is very affordable for the lower income group with the deepest market reach making easy access to the end user satisfying him. The small unit packing s will definitely attract a large number of rural consumers . 2. New product designs: Keeping in view the rural life style the manufacturer an d the marketing men can think in terms of new product designs. The rural product usage environment is tough because of rough handling, rough roads & frequent power fluctuations. T hus, all these environmental factors must be considered while developing the products meant for rural audience. Nokia s 1100 model is a very good example of a customized model for rural markets. Its design has been modified to protect it against rough usage in rural environment; it is dust resistant & has a small torch light in view of the frequent power cuts in rural India. It is also introduces messaging in Hindi language now, in some of the economically priced models in or der to cater to the semi-urban or rural consumers. This is in real terms, thinking global & a cting local. 3. Sturdy products: Sturdiness of a product is an important factor for rural con sumers. The product should be sturdy enough to stand rough handling, transportation & storag e. The experience of torch light dry battery cell manufacturers supports this because t he rural consumers preferred dry battery cells which are heavier than the lighter ones. F or them, heavier weight meant that it has more over and durability. Sturdiness of a product eithe r or appearance

is an important for the rural consumers.

4. Utility oriented products: The rural consumers are more concerned with utilit y of the product and its appearance Philips India Ltd. Developed and introduced a low cos t medium wave receiver named BAHADUR during the early seventies. Initially the sales were good but declined subsequently. On investigation it was found that the rural consumer bought radios not only for information and news but also for entertainment. 5. Brand name: For identification, the rural consumers do give their own brand n ame on the name of an item. The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on generic names. A brand name or a logo is ver y important for a rural consumer for it can be easily remembered. Many a time s rural consumers ask for peeli tikki in case of conventional and detergent washing soap. Nirma made a peeli tikki especially for those peeli tikki users who might have e xperienced better cleanliness with the yellow colored bar as compared to the blue one altho ugh the actual difference is only of the color. e.g.: Coca-Cola targeted the whole Indian rural market with the positioning of Th anda Matlab Coca-Cola advertisements because most of the villagers say when wanting a drink r efer to it as Thanda so Coca-cola used that word. Pricing strategies

1. Low cost/ cheap products: This follows from the product strategy. The price c an be kept low by low unit packaging s like paisa pack of tea, shampoo sachets, vicks 5 grams tin, etc. this is a common strategy widely adopted by many manufacturing and marketing concerns . 2. Refill packs / Reusable packaging: In urban areas most of the health drinks a re available. The containers can be put to multipurpose uses. Such measures can a significant impact in the rural market. For example, the rural people can efficiently reuse the plastic bottle of hair o il. Similarly the packages of edible oil, tea, coffee, ghee etc can be reused. Pet jars free with the Hasmukhrai and Co Tea, Ariel Super Compact. 3. Application of value engineering: in food industry, Soya protein is being use d instead of milk protein. Milk protein is expensive while Soya protein is cheaper, but the n utrition content of both is the same. The basic aim is to reduce the value of the product, so tha t a larger segment can afford it, thus, expanding the market. 4. Large volume-low margins (Rapid or slow penetration strategy): Marketers have to focus on generating large volumes & not big profit margins on individual product s. If they price their product at a level which can lead to good volumes, then they can still gen erate good returns on the capital employed. 5. Overall efficiency & passing on benefits to consumers: For rural products, th e strategy should be to cut down the production, distribution & advertising costs & passing on these benefits to the customers to further increase the turnover. Most often, it has b een observed that advertising has less to do with product sales in the rural areas. If an organiza tion gets the price point right, then it can work in rural market. 6. Low volume-low price strategy: This strategy of reducing prices by reducing t he package size in order to make it appear more affordable, is delivering very good results for a large number of FMCG product categories, in the rural markets of India. In categories where maintaining the price point is extremely critical, this strategy is delivering v ery good results. 7. Ensuring price compliance: Rural retailers, most of the times, charges more t han the MRP. The manufacture has to ensure price compliance either through promotional campai gns, as was done by Coca Cola, or by ensuring the availability of products at the retail out lets directly.

Promotion strategies Customized promotional media & messages need to be developed by the organization s to effectively target the rural market. The following strategies can be considered while developing promotional campaigns for the rural markets: 1. Think Global Act Local Rural population is diverse, but the commonalities of their ethos & simple livin g habits need to be understood for advertising to succeed. For that, the theme of the advertisement needs to revolve among universal themes, such as family-love. But the context, storyline, language & idioms should be such that the rural audience of different rural market segments can relate to. 2. Think in Local Idiom This is the need of the advertising professionals who can think like the rural p eople. The only we can have insights like Thanda matlab Coca Cola . There should be the use of language writers who understands the rural & regional pulse better. 3. Simplicity & Clarity All promotional messages targeted at rural audience need to be simple & clear, w hich can be easily understood, & they should not include any confusing elements. It i s preferable that it has only a few propositions at a time. Bombarding rural consu mers with too much, in less time can easily confuse them & leave them bewildered. Promotional message should highlight only the functional values of the product & explains how those values can make the consumer s life even better & solve any of his problems. 4. Narrative Story Style The promotional message can be delivered in the form of an entertaining story wi th a message depicting how the brand delivers larger good to the family & society. The theme of the story line can be about how the product can solve the problems of t he rural consumers. 5. Choice of Brand Ambassador

Brand Ambassador for the rural markets need to be picked carefully as urban succ esses might not get replicated in the rural markets. That is why Govinda in the Mirind a as boosted the sales of the drink in the rural markets. An organization might spend a lot of money in hiring a brand ambassador only to find out later that it had little imp act on the rural consumer. DISTRIBUTION STRATEGY Many companies view the rural markets as great opportunity for expanding their s ales but find distribution as a major problem. Unfortunately, it is almost impossible to trans plant strategies which work successfully in urban markets onto rural markets, namely, extensive r etailing and sustained pull generation through mass media advertising. The road blocks to reach the rural customers are: Lack of adequate transport facilities. Large distances between villages. Lack of pucca roads connecting villages to nearest townships. Lack of proper retail outlets Lack of mass media infrastructure. The marketers were of the opinion that the villagers would come to nearby towns and buy the products that they want. What has been found is that if we have to serve the rural consumer we will have to take our products to him through the channels that he is using and some innovative ways o f getting to him. The following distribution strategies formulated for the rural category.

1. Coverage of villages with 2000 and above population: Ideally, coverage of vil lages with up to 2000 and above population could be the break-even point for a distribution setup. By doing so the percentage of villages covered comes to only 10% of all the village s, but the rural population covered will be substantial, to the extent of about 40 to 45 percent. With a distribution network in about 55,000 villages, which have a population of 2000 p ersons & above each, one can cover about 25 crores rural consumers. This strategy is good to begin with & then subsequently, villages with lesser populations can be added. 2. Segmentation: the number of villages in India is huge & it is not viable to c ontact & serve all villages directly. Therefore, companies or distributors can carefully examin e the market potential of different villages & target the villages that can be served in a fi nancially viable manner through an organized distribution effort. 3. Use of co-operative societies: There are over 3 lacks co-operative societies operating in rural areas for different purposes like marketing cooperatives, farmer s service c ooperatives and other multipurpose cooperatives. These cooperatives have an arrangement for cent ralized procurement and distribution through their respective state level federation. Su ch state level federation can be motivated to procure and distribute consumables items and low value durable items to the members to the society for serving to the rural consumers. Many of the societies extend credit to the members for purchases. 4. Utilization of public distributory system: The PDS in the country is fairly w ell organized. The revamped PDS places more emphasis on reaching remote rural areas like the hi lls and tribal s. The purpose of PDS is to make available essential commodities like food grains, sugar, kerosene, edible oils and others to the consumers at a reasonable price. The sho ps that distribute these commodities are called fair price shops. These shops are run by the state civil Supplies Corporation, co-operatives as well as private entrepreneurs. Here again there is an arrangement for centralized procurement and distribution. The manufacturing and marketing me n should explore effective utilization of PDS. 5. Utilization of multipurpose distribution centers by petroleum/oil companies: In order to cater to the rural areas the petroleum/oil companies have evolved a concept o f multipurpose distribution centers in rural areas. In addition to petrol/diesel, lubricants, t hese outlets also stock consumables agricultural inputs like fertilizers, pesticides and seeds. It is es timated that there are about 450 such outlets in operation in the country. The rural consumer who h as tractors, oil

engine pump sets and mopeds frequent these outlets for their requirement. These outlets can be profitably utilized for selling consumables and durable items also. 6. Distribution up to feeder markets/mandi towns: Keeping in view the hierarchy of markets for the rural consumers, the feeder markets and mandi towns offer excell ent scope for distribution. The rural customers visit these towns at regular intervals not onl y for selling the agricultural produce but also for purchasing cloth, jewelry, hardware, radios, t orch cells and other durables and consumer products. From the feeder markets and mandi towns th e stockiest or wholesaler can arrange for distribution to the village shops in the interior places. This distribution can be done by mopeds, cycles, bullock-carts, camelbacks etc. depen ding upon the township. 7. Shandies/Haaths/Jathras/Melas: These are places where the rural consumers con gregate as a rule. While shandies/heaths are held a particular day every week, Jathras a nd melas are held once or twice a year for longer durations. They are normally timed with rel igious festivals. Such places attract large number of itinerant merchants. Only temporary shops co me up selling goods of all kinds. It can be beneficial for companies to organize sales of thei r product at such places. Promotion can be taken, as there will be ready captive audience. For con vincing the manufacturing and marketing man with regard to the importance of these places fr om rural marketing point of view a visit to such places is necessary. It is estimated tha t over 5,000 fairs are held in the country and the estimated attendance is about 100 million rural consumers. Biggest fair Pushkar Mela is estimated to attract over 10 million people. There ar e 50 such big rural fairs held in various parts of country, which attract urbanite also like Ma nkanavillaku in Malappara in Kerela, Kumbh Mela at Hardwar in U.P. Periya Kirthigai at Tiruparunku naram in Tamil Nadu. Merits: Convenience: The entire market can be related to large departmental stores in ci ties, where the advantage is a one-stop shopping exercise. These outlets crop up every week, providing consumers immense choice and prices. Attractive: The weekend shopping is not only convenient but also entertaining. T he markets start early and will be over by lunch. Afterwards, there will be enterta inment. In

respect of transactions, it is an attractive place to those who want to buy seco nd hand durables and to those who prefer barter transactions. Further the freshness of t he produce, buying in bulk for, a week and the bargaining advantage attract the fru gal and weeklong hard working rural folk. Availability: It is a market for everyone and for everything. Household goods, c lothes, durables, jewellery, cattle, machinery, farming equipment, raw materials and a h ost of products are available. 8. Agricultural Input Dealers: Fertilizers should be made available to the farme rs within the range of 4-5 km from their residence, as per the essential commodities act. This is why there are about 2 lakh fertilizer dealers in the country, both in cooperative & private se ctor. Example of Varana Nagar in Maharashtra proved an eye opener in this regard where the sugar and milk cooperatives have totally changed the life style of people. The supermarket in Varana Nagar c aters exclusively to rural consumers. Similarly a co-operative supermarket called Chint amani in Coimbatore (T.N) arranges free transit of rural consumers to the supermarket of their purchases. 9. Joint distribution by Non-competing Companies: As the cost of distributing th e products in the rural market through distribution vans can be unviable for a single compa ny, different non-competing companies can come together to jointly operate distribution vans f or the rural market. This will enable them to share the cost of operating the van & on accoun t of the sharing of the cost by four or five companies; the entire operation can become financial ly viable for all the players. 10. Personal Selling Network: It is very successful distribution channel being d eveloped by companies like HUL. It adds a personal touch to the marketing, as the salesmen a re the resident of the village or community itself, making it easier to sell the product & maxim ise sales for the company. THE OLD SETUP

The historically available people & places for distribution include: -Whole sell er, Retailer, Vans, Weekly Haats, and Bazaars & Shadies. 1. Wholesalers The Indian wholesaler is principally a Galla Kirana (food-grain) merchant who su stains the belief that business is speculative rather than distributive in character. He is a trader / commodity merchant rather than a distributor and therefore tend s to support a brand during boom and withdraw support during slump. The reason for this speculative character and dormant role of wholesalers are:

Indian market was largely sellers market. There was no need for active sales gro wth. Companies laid more emphasis or retailers in urban areas, who are very large in number. As a result of retail based distribution was weakened. Rural markets were neglected by many. The occurrence of retail outlets was low. Therefore many companies were dependent on whole salers. The current need is to activate and develop wholesaler of the adjoining market a s a distributor of products to rural retail outlets and build his loyalties to the c ompany. 2. Retailers There are different kinds of retailers. Shops within the village Shops located on the main road and not exactly within the village Kasba market or the tahsil market. Village retailers have traditionally been among the most mobile of rural residen ts. Often doubling up as money lenders. Their multi person interaction in the closed village society.

As a result retailers play a significant role. I. CREDIBILITY: . He enjoys the confidence of the villagers. . His views are accepted and followed by the rural people whose awareness and media exposure levels are low. (-The urban retailer is not trusted. -He is seen as a businessman with profit motto. -His view points are evaluated with other sources of information.) II. INFLUENCE LEADER: . His role as influence leader is indisputable. From tender twig of neem to washing powder retailer testimony has been vital part of the product adoption process. . The role of urban retailer is weak. . The urban consumers have numerous sources of information. . Although retailer s opinion is sought it may not be 100% believed and followed. III. BRAND PROMOTER: . In rural market retailers remains the deciding factor to sell particular brand. . Retailers helps in identification and selection of brands, there is less influence of shelf displays and point of purchase promotion. . Presence of spurious brands is an ample testimony to this view. (The urban retailer has a limited role as a brand promoter. He cannot directly, recommend the brands. He is to intelligently drive home his recommendations, as urban consumers do not trust him completely. -It is through shelf displays and incentive offers that he has to push the

brands.) IV. RELATIONSHIP MARKETER . Village retailer practices relationship marketing. . He caters to a set of buyers who have income from immovable land resources and would be static over a much longer time span. . The relationship could extend beyond three generations, backed by historical credibility of the retailer as a product referral. (-on the contrary, the urban retailers have to make an effort to adopt relationship marketing. His customers base comprises largely the mobile service class prone to shift residence at least once, if not more, in less than a decade. This limits the time span and perspective of the retailer customer relationship.) V. HARBINGER OF CHANGE . In an environment relatively isolated from external developments, he has been harbinger of change. . He is one of the main sources of information and opinion as well as supplier of product and services. (As against this, we find urban retailer, wielding limited influence in changing the product choices and quality of life of consumers.) 3. Vans Mobile vans long since, have an important place in distribution and promotion of the products in villages. JK Dairy launched whitener Dairy Top in small 50 gm sachets priced at Rs.

6.50. It decided to make a concerted foray into rural India in 1996. It hired va ns to penetrate the rural interior, each van traveling around 125 km a day, 25 days a month.

4. Weekly Haats, Bazaars, Shandies The haats are the oldest outlets to purchase household goods and for trade. Thes e markets are very well organized with shopkeepers having pre-assigned spaces for them to sell their wares. A typical market is in an open field with ample space for displaying all sorts of goods. Its location changes every week. These markets have different names in di fferent regions. But they are strikingly similar in what they sell. It is reported that there are, in all, about 47,000 haats held throughout the country. Media Vehicles Through the rural markets offer big attractions to the marketers, one of the mos t important questions frequently asked is How do we reach the large rural populatio n through different media and methods? Mass Media Local Media Personalized Media Radio Haats, Melas, Fairs Direct Communication Cinema Wall Paintings Dealers Press Hoardings Sales Persons TV Leaflets Video Vans Folk Media Animal Parade Transit Media Researchers . Formal media

It includes Press and print, TV, Cinema, Radio, and Point of purchase and Outdoo r advertisement. Reach of formal media is low in rural households (Print: 18%, TV: 27%, Cinema: 30%, and Radio: 37%) and therefore the marketer has to consider the foll owing points: . Newspapers and magazines: English newspapers and magazines have negligible circulation in rural areas. How ever local language newspapers and magazines are becoming popular among educated facilities in rural areas. Examples: Newspapers: Eenadu in A.P., Dina Thanthi in Tamil Nadu, P unjab Kesari in the North, Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas. . Television: It has made a great impact and large audience has been exposed to this medium. H LL has been using TV to communicate with the rural masses. Lifebuoy, Lux, Nihar oil etc are some of the products advertised via television. Regional TV channels have become very popular especially in Southern states. Examples: SUN TV is very popular even in rural ar eas in Tamil Nadu and Asianet is a preferred regional channel in Kerala. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rura l customer. . Radio:

Radio reaches large population in rural areas at a relatively low cost. Example: Colgate, Jyoti Labs, Zandu Balm, Zuari industries are some of the companies using radio communication programme. There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The adverti sement has to be released during this time to get maximum coverage in rural areas. Another advantage is that the radio commercial can be prepared at short notice to meet the changin g needs of the rural folk. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops. . Cinema: About 65% of the earnings from cinema are from rural markets. Film viewing habit s is high in certain states like Tamil Nadu, Karnataka and Andhra Pradesh. Village theatre s do roaring business during festivals by having four shows per day. The monthly char ge for showing an ad film is within Rs.500. Local distributor or dealer who has good co ntacts with cinema houses in villages can easily monitor this activity. Examples: Films on p roducts like Vicks, Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films, Ad slides can also be screened in village theatres. . Outdoor advertisements: This form of media, which includes signboards, wall painting, hoarding, tree boa rds, bus boards, dealer boards, product display boards etc, is cost effective in rural ar eas. Symbols, pictures and colours should be used in POPs meant for rural markets so that they can easily identify the products. Generally rural people prefer bright colours and the mark eter should Utilize such cues.

. Point of purchase: Display of hangings, festoons and product packs in the shops will catch the atte ntion of prospective buyers. However a clutter of such POP materials of competing compani es will not have the desired effect and is to be avoided. . Direct mail advertising: It is a way of passing on information relating to goods or services for sale, di rectly to potential customers through the medium of post. It is a medium employed by the a dvertiser to bring in a personal touch. In cities lot of junk mail is received by all of u s and very often such mails are thrown into the dustbin whereas a villager get very few letters a nd he is receptive to such mailers. . Wall paintings: It is an effective and economical medium for communication in rural areas, since it stays there for a long time depending upon the weather conditions. The cost of paintin g one square foot area is just Rs.10. Retailers welcome painting of their shops so tha t the shop will look better. Walls of farm houses, shops and schools are ideal places for p ainting and the company need not have to pay any rent for the same. The walls have to be pai nted at least one or two feet from ground level. It is better to take permission of the owner. Very often the owner takes responsibility for taking care of the wall painting. Paint ing to be avoided during election time and rainy season. The matter should be in the form of pictures, slogans for catching the attention of people. Companies marketing TV, fans, bran ded coffee/tea, toothpaste, pesticides, fertilizers etc. use wall painting as promot ion medium in rural areas.

. Tree boards: These are painted boards of about two square feet in dimension having the pictur e or name or slogan of the product painted on it. The cost of such a painted board is about R s.80. These boards are fixed to the trees on both sides of the village road at a height of a bout 10 feet from ground level. These boards attract the attention of slow moving vehicles like cy cles, bullock carts and tractors and people walking on the road. Considering the poor conditio n of roads, even the buses move at slow speed through village road. Fertilizer and pesticide companies in rural areas extensively use tree boards. These are low priced promotion items an d can be used by consumer goods companies too. .Informal/Rural specific media These media lizing the promotional munication are using a ia and methods are with effective reach and personalized communication will help in rea objectives. Companies to suit the specific requirements of rural com variety of such media effectively and some of the more important med given below.

. Farm-to-Farm/House-to-House visit: Rural people prefer face-to-face communication and farm visits facilitate two-wa y communication. The advantage is that the sales person can understand the needs a nd wants

of the rural customer by directly discussing with him and answer his queries on products and services. Potential customers in the village are identified and the company s/distributor s representative makes farm-to-farm visits and highlight the b enefits of the products. The person carries with him literature in local language and al so samples of products. The person does not sell the product but only promotes the use of the product. Very often the local dealer also joins the representative in making farm-to-farm visits. The dealer clarifies the terms and conditions of sale and also makes independent fol low up visits for securing orders. Example: This approach has been found to be very effective for agricultural machinery, animal health products and agricultural inputs. Many LIC agents and companies dealing with high value consumer durables have tried this method w ith success in rich rural areas. . Group meeting: Group meetings of rural customers as well as prospects are an important part of interpersonal media. The company is able to pass on the message regarding benefits of the prod ucts to a large number of customers through such meetings. Group meeting of key customers are co nducted by banks, agricultural inputs and machinery companies in rural areas. The bankers v isit an identified village, get the village people in a common place and explain the var ious schemes to the villagers. Such meetings could be organized in prosperous villages for promo ting consumer durables and two wheelers also. Example: MRF Tyres conduct tractor owners meet i n villages to discuss repairs and maintenance of tractors. . Opinion leaders: Villagers place more emphasis on the experience of others who have used a product/brand to make purchase decision. Opinion leader is a person who is consi dered to be knowledgeable and is consulted by others and his advice is normally followed. Su ch opinion

leaders could be big landlords, bank official, panchayath-president, teachers, e xtension workers etc. Examples: a) Mahindra Tractors use bankers as opinion leaders for their pro duct. b) Asian Paints promoted its Utsav brand of paint by painting the village Sarpanch s house a few months prior to the launch if the branch to demonstrate that the paint does not peel of f. . The Melas: Melas are of different types i.e. commodity fairs, cattle fairs and religious fa irs and may be held only for a day or may extend over a week. Many companies have come out with crea tive ideas for participating in such melas. Examples: a) Britannia promotes Tiger Brand Bis cuits through melas. b) The mahakumbh at Allahabad is the biggest mela in India. HLL has put u p 14 stalls in the mela grounds for promoting Lifebuoy. Handcarts have been deployed for increa sing access. . The Haats: Traditionally on certain days of week, both the sellers and buyers meet in the v illage to buy and sell goods and services. These are the haats that are being held regularly in al l rural areas. The sellers arrive in the morning in the haat and remain till late in the evening. N ext day they move to another haat. The reason being that in villages the wages are paid on weekly basis and haat is conducted on the day when the villages get their wages. For the marketer, the ha at can be an ideal platform for advertising and selling of goods. By participating in haats a nd melas, the company can not only promote and sell the products but also understand the share d values, beliefs and perceptions of rural customers that influence his buying behaviour. . Folk dances: These are well-appreciated form of entertainment available to the village people . The folk dance Kuravan Kurathi is popular in Tamil Nadu. The troupe consists of dancers, drummers and musicians and they move in a well-decorated van from one village to another village singing and dancing. In a day the troupe covers about 8-10 villages. As soon as the

van reaches a village, film songs are played to attract the attention of the vil lages. This is followed by folk dances. Mike announcement is made about the company s products an d leaflets are distributed. After the dance programme, queries, if any, about the products are answered by the sales person. Folk dance programme costs about Rs.5000 per day a nd therefore these programmes are conducted during the peak season in selected vill ages. Examples: Fertilizer and pesticide companies organize folk dance programmes duri ng peak season in selected markets. Thumps Up has sponsored Lavnis, the folk dance progr amme of Maharashtra and over 30 programmes have been arranged in selected rural markets.

. Audio Visual Publicity Vans (AVP Vans): AV unit is one of the effective tools for rural communication. The van is a mobi le promotion station having facilities for screening films slides and mike publicity. The sal es person makes a brief talk about situation in the village, the products and the benefits. The ad film is screened along with some popular film shots and this continues for about 30 minutes. At t he end of the film show, he distributes handbills and answers queries of the customers. The wh ole operation takes about 1-2 hours depending upon the products under promotion, number of par ticipants in the meeting and time taken for question and answers. The vans move to the next v illage for the second show. The cost of running a fully equipped AVP unit is about Rs.4000 per day and AVP van operation has to be considered as an investment for business development in rural areas. Example: Companies such as HLL, Colgate, and Phillips have made effective use of AVP vans for popularizing their products in rural areas.

. Product display contests: Package is an integral part of the product. Its main purpose is to protect the p roduct during transit, to preserve the quality and to avoid any loss in quality and quantity. The main purpose of this contest is to remind the customer to buy the product as soon as he enter s the shop. Another objective is to influence the dealer to stock the product and support th e company in increasing the sales. The display contest has to be announced well in advance an d promotional materials to be distributed to all the selected dealers in a geographical area. Prizes for best displays are announced to motivate the dealers; the contest lasts for about a mo nth. A wellplanned product display contest not only increases the involvement of dealers in the company s products but also increases the sales during the contest period. This is used fo r promoting consumer goods such as shampoos, soaps and toothpaste. . Field demonstration: This is based on the extension principle seeing is believing and is one of the mos t effective methods to show the superiority of the company s products to the customers. A prog ressive farmer who is an opinion leader is selected and the demonstration is conducted i n his field in the presence of a group of farmers in the village. The farmers observe the resul ts in the field and the local dealer calls on them in their farms and persuades them to buy the particular brand of pesticide or fertilizer. Examples: a) Spraying a particular brand of an insec ticide against insect pests and showing the farmer how effectively the insects are controlled. b) Demonstrating the use of tractor/implements for different agricultural operation s. c) Hawkins pressure cooker has demonstration representatives who carry out demos in rural h ouseholds. The representative receives 1% commission for every customer who approaches the dealer via demonstrations. e) Similarly effectiveness of detergents, pressure cookers, vacc um cleaners and mosquito coils could be promoted by demonstrations in selected markets. . Field days:

These are extension of field demonstrations. One of the main objectives of follo wing modern agricultural practices is to increase the yield. The company organizes demonstra tions in a piece of land belonging to progressive farmers. All the fertilizers, pesticides, nutri ents etc. are applied after making field observations. Just before harvest, all the important farmers are invited to see demonstration plot and see for themselves how the yields are better in the plot compared to other fields. Field demonstrations/field days consume lot of time and efforts an d therefore have to be planned well. . Information centers: They provide latest information on cultivation of crops, fertilizer application, weed, management and control of pests and diseases. Experienced agricultural graduates who make frequent visits to the field and advice farmers on modern agricultural practices manage the centers. They also pr ovide information on farm implements, seeds, fertilizers, pesticides, diesel engines, sprayers and tractors etc. Many consumer goods companies have opened show rooms in prosperous rural areas. Example: Hero Honda has opened extension counters with show room faciliti es in major rural markets. . Life-style marketing: Each rural market segment has certain special features i.e. they share common li fe-style traits. They include village sports, religious events, prominent personalities and role models. Examples: Textile mills maintaining community gardens, Mineral water companies s upplying clean drinking water during summer festivals in villages and Consumer goods comp anies sponsoring Kabaddi. Choosing media vehicles

The choice of different media vehicles for any market is based on an analysis of the standard features like: reach, frequency, cost & availability. Depending on the factor of reach & frequency, the different media can be classified into the following categories. This categorization can help the marketer to make a decision about which type of medi a would be more suitable to the product & the organization. (a) High reach High frequency Jeep based advertising Wall painting Bus stand & bus panels Haats Hoardings Postal branding (b) Low reach High frequency Co-operative notice board Shop front painting Tin plating house Dealer boards Village boards Well tiles Calendars/labels (c) High reach Low frequency Van based advertising Melas Direct to home Folklore group Exhibitions/created events (d) Low reach Low frequency Tin painting tree/shops Leaflets Posters & banners

 Streamers Danglers Conclusion

Thus looking at the challenges and the opportunities which rural markets offer t o the marketers it can be said that the future is very promising for those who can understand th e dynamics of rural markets and exploit them to their best advantage. A radical change in atti tudes of marketers towards the vibrant and burgeoning rural markets is called for, so the y can successfully impress on the 230 million rural consumers spread over approximatel y six hundred thousand villages in rural India. The rural market is very large in compare to the urban market as well as it is m ore challenging market. The consumer wants those products which are long lasting, good, easy to use and cheaper. The income level of rural consumers is not as high as the income level of urban consumers that s why they want low price goods. It is one of the reasons that the sell of sachet is much larger in the rural area in all segments. It is necessary for all the major companies to provide those products which are easy to available and affordable to the consumers. It is right that the profit margin is very low in the FMCG products, but at the same time the market size is much large in the rural area. The companies can reduce their prices by cutting the costs on the packaging because the rural consumers don t need attractive packaging. Application of 4A* is also a major task for the major companies in this area. Rural market has an untapped potential like rain but it is different from the ur ban market so it requires the different marketing strategies and marketer has to meet the challen ges to be successful in rural market. References 1. www.thehindubusinessline.com/nic/073/index.htm 2. www.coolavenues.com/know/mktg/

3. www.indianmba.com/Faculty_Column/FC658/fc658.html 4. business.mapsofindia.com/rural-economy/state-development/marketing.html 5. www.icmrindia.org/casestudies/catalogue/Marketing/MKTG081.htm