Rural marketing

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http://www.miteshk.webs.com
UNIT: 1
RURAL MARKETING
Definition:-
Rural marketing can be defined as a function which manages all those activities in asserting,
stimulating and converting the purchasing power of rural people into an effective demand for
specific products and services and there by achieving the goals of the organisation.
Rural areas:-
Rural areas are large and isolated areas of an open country with low population density a
country side refers to rural areas that are open.
Q1. Explain the nature and scope of rural marketing?
Ans: Meaning of Rural marketing:-
Rural marketing is promotion of a company’s products in the rural markets by using
strategies which differ from that of urban market. The rural market more price sensitive but
it has preference quantity.
Nature of Rural market:-
1. Large, diverse and scattered market:-
Rural marketing in India is large, and scattered into a number of regions. There
may be less number of shops available to market products.
2. Major income of rural consumers is from agriculture:-
Rural prosperity is tied with agriculture prosperity. In the event of crop failure, the
incomes of masses is directly affected.
3. Traditional outlook:-
Villages develop slowly and have a traditional outlook. Change is a continuous
process but rural people accept change gradually. This is gradually changing due to
literacy especially in the youth who have begun to change the outlook in the villages.
4. 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 savings etc. Today the rural customers spends money to get
value and is aware of the happening around him.
5. Rising literary levels:-
It is documented that approximately 45% of rural Indians are literate. Hence
awareness has increase and the formats are well informed about the world around
them. They are also educating themselves on the new technology for a better life
style.
6. Diverse socio economic background:-

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Due to differences in geographical areas and uneven land fertility, rural people
have different socio economic background, which ultimately affects the rural markets.
7. Infrastructure facilities:-
The infrastructure facilities like warehouses, communications systems and
financial facilities (or) inadequate in rural areas physical distribution is a challenge to
marketers who has found innovative ways to market their products.
Scope of marketing:-
1. Large population:-
According to 2011 census, rural population is 72% of total population and it is
scattered over a wide range of geographic area.
2. Rising rural prosperity:-
Average income level has unproved due to modern farming practices, contract
farming industrialisation, migration to urban areas etc.
3. Growth in consumption:-
There is a growth in purchasing power of rural consumers. The average per capita
house hold expenditure is 382 Rs
4. Change in life style:-
Life style of rural consumer changed considerably.
5. Market growth rate higher than urban:-
The growth rate of fast moving consumer goods [FMCG] market and durable
market is high in rural areas. The rural market share is more than 50% for products
like cooking oil, hair oil etc.
6. Life cycle advantage:-
The products which have attain the maturity stage in urban market is still in growth
stage in rural market.
7. Rural marketing is not expensive:-
To promote consumer durable inside a state costs 1 croreRs while in urban areas it
will costs in millions.
Q2. What is rural market? Importance of rural marketing ?
Ans:Meaning of rural market:-
On account of green revolution, the rural areas are consuming a large quality of industrial
and urban manufactured products. In this context a special marketing strategy namely rural
marketing has emerged. But often rural marketing is confused with agricultural marketing –
The letter denotes marketing of produce of rural areas to the urban consumers or industrial
consumers, were as rural marketing involves delivering manufactured or processed inputs or
services to rural producers of consumers.
Importance of rural market:-
1. Large market:-

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Approximately 75% of Indian’s population resides around 6,38,365 villages of
India spread over 32,00,000 Sq. kilometre 41% of Indian’s middle class resides in
rural areas. The Indian rural consumer leaves in 6,00,000 villages across the country
and they account for over 70% of population of the country. For several product
categories, rural markets account for over 60% of the national demand.
2. Higher purchasing capacity:-
According to “NCAER”[National Council for Applied Economic Research]. As
per NCAER study there are many middle income and above households in the rural
areas. As there are in the urban areas there are almost twice as many lower middle
income households in rural areas as in the urban areas. Because of this purchasing
power of power of rural people is on rise.
3. Market growth:-
“Hariyali kissan bajar” was set up by sri ram consolidated limited to facilitates
scale of agriculture inputs such as fertilizers, pesticides forming equipment, seeds etc.
Shakti- though the state governments and NGO’S involved in microfinance women
entrepreneurs in villages are identified to act as local distribution and sales point for
HUL products.
4. ITC:-
Itc’s internet enabled rural interface to help scale of agricultural outputs is presently
operational in 6 states market is growing at a rate of 3-4% p.a.
Q3. Define size of rural market and discuss?
Ans: According to the census of India village with clear surveyed boundaries not having a
municipality, corporation or board, with density of population not more than 400 Sq.km and
with at least 75% of the male working population engaged in agriculture activities would
quality as rural.
According to this definition there are 6,38,000 villages in the country of these 0.5% has a
population about 10,000 and 2% have population between 5,000 and 10,000 around 50% has
a population less than 200.
Interestingly, the FMCG and consumer durable companies, any territory that has more than
20,000 &50,000 population respectively in rural market so for them it is not rural India which
is rural.
According to the census of India 2001, there are more than 4000 towns in the country. It
has classified them into 6 categories around 400 class-I to towns with 1,00,000 and above
population, 498 class-II towns with 50,000-99,999 population, 1368 class-III towns with
20,000-50,000 population, 1560 class –IV towns with 10,000-19,999 population
It is mainly the class-II & class-III towns that markets term as rural.

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Demographical details of Indian rural market
• About 285 millions live in urban India where as 742 millions reside in rural areas.
• The No. of middle income & high income households in rural India is expected to
grow from 46 millions to 59 millions.
• Size of rural market is estimated to be 42 millions household and rural market has
been going at 5 times the growth of the urban market.
• More government, rural development programs.
• Increase in agricultural productivity leading to growth of rural disposable income.
• Lowering of difference between taste of urban and rural customers.
The Indian rural market with its vast size and demand offers great opportunity to marketers.
Our national is classified in around 450 districts & approx. 6, 30,000 village which can be
stored in different parameters such as literacy level, accessibility income levels, distance from
nearest town etc.
The rural market accounts for half of the total market for Tv sets, fans pressure cooker’s,
bicycle’s, washing soap, tea salt & tooth powder, what is more, the rural market for FMCG
product is growing much faster than the urban market.
Q4. Explain the distinction between rural market & urban market?
Ans: Definition:-
Rural marketing is similar as simply marketing. Rural marketing differs only in terms of
buyers here, target market consists of customers living in rural areas.Thus rural marketing is
application of marketing fundamentals {concepts, principles, theories etc} to rural marketers.
Rural marketing is a process of developing, pricing , promoting and distributing rural
specific goods and services leading to desired exchange with rural customers to satisfy their
needs and wants, and also to achieve organisational objectives.
Differences between rural marketing & urban marketing:-
Although rural marketing offer immense potential marketers used to recognise the fact
that there are considerable differences in many aspects including the nature, characteristics,
buying patterns & behaviours of rural consumer when compared with their urban counter
parts.
While the urban economy thrives mainly on secondary and territory activities such as
manufacturing &service, the rural economy is driven mainly by primary activities such as
agriculture, fishing & forestry.
The consumer demand and consumption patterns also differ across rural and urban areas,
in many products rural consumption now accounts for a large share then urban. In in washing
soaps the rural share is over 60%. In popular both soaps it is more than 50% and in batteries it
is more than 56% similarly is the case with packed tea & hair oil’s

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Aspect Urban Rural
Philosophy Marketing &social concepts
& relationship market
Marketing & social concepts development
marketing
Demand High Low
Competition Among units in organized
sector
Among unorganised sector
Consumers:‐
Location
Literacy
Income
Expenditure
Needs
Innovations

Concentrated
High
High
Planned &even
High level
Faster
Widely spread
Low
Low
Seasonal &variations
Low level
Slow
Product awareness   High Low
Concept Known Less known
Positioning Easy Difficult
Usage method Easy grasped   Difficult to grasp
Quality preference Good Moderate
Price sensitive Yes Very much in rural
Distribution channels Whole seller, retailers,
supermarkets, speciality
stores, authorised store
rooms
Village shops
Transport facility Good Moderate
Product availability High Limited
Advertising Print, audio, visual media,
outdoors, exhibitions etc
T.v, radio, print media to some extent
Personal selling Door‐to‐door Occasionally
Sales promotion Contest, gifts, price discount Gifts & price discount
Publicity Good opportunity Less opportunity

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Q5. What are the problems of rural marketing?
Ans: The problems of rural marketing are continuing in spite of efforts to improve in a 9th
five year plan. The position is improving but slowly the rural marketer has many challenges.
But the vast & expanding markets call for good marketing strangers to create win situations
to all parties in the chain of rural marketing.
The problems of rural marketing are as follows:-
Under developed people
Under developed market
Improper communication facilities
Many languages
Vastness & uneven spread
Low per capita income
Poor infrastructure facilities
Seasonal demand
Less distribution channel
1. Under developed people:-
Rural society is found by tradition, old customs, practices etc. The impact of
modern science & technology has made very less impact of the old beliefs are still
continuing.
2. Under developed market:-
Rural markets are not developing because of inadequate banking & credit
facilities. Rural market needs banks to enable remittance, to transact on credit basis
and to obtained credit support from the bank. At present every 48th
village in India
only has bank.
3. Poor or improper communication facilities:-
Most villages even today largely depends on telegrams and phones for their
communication needs print media and visual media[Television cinema] etc reaches
only about 20% of rural Indians.
4. Many languages:-
India is a country of many languages. Language becomes a barrier in effective
communication in the marketing efforts. The languages vary from state to state, place
to place, district to district there are now 18 schedule national languages.
5. Vastness & unevenly spread:-
India is a vast time & major approximately 3214km from North to South
&2933km from East to West.
Rural market consists of approximately 75 cores rural consumers spread across
approximately 6,38,365 villages. Despite the urban migration, the rural areas continue
to be the place of living for a vast majority Indians.

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6. Low per capital income:-
Most farmers has small lands and many villages are brought prone, this result in
low per capita income.
Low per capita incomeResults in low consumption pattern as compared to the
urban population.
The marketers faces challenges in rural marketing to decide about quantities,
frequency of distributions, package size etc… due to the low per capita income of the
rural people.
7. Poor infrastructure facilities:-
Infrastructural facilities like roads, ware houses, powers etc… are inadequate in
rural areas. Infrastructural cost are very high and impact adversely in the rural market
activities.
8. Seasonal demand:-
Rural economic is seasonal, rural people have two seasonal namely khariff&rabi.
Villages have money mostly in this seasons. As village income are seasonal demands
are also.

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UNIT: 2
RURAL MARKETING ENVIRONMENT
Q1. Discuss about the rural marketing environment?
Ans:- An environment is that which surrounds an organization. It was sum total of external
factors and made up of tangible and intangible factors /both controllable and uncontrollable.
Rural marketing is basically focused marketing activity of a organization. The environment
out lines threats and opportunities of the market.
The Rural marketing environment is complex and is changing continuously.
The marketing organization should foresee and adopt strategies to change in requirements in
the market. One which doesn’t change perishes. An adaptive organization can stand
competition or have a modest growth. An organization which makes its effective marketing
plans and its own strategies or a creative one will prosper and creates opportunities in the
change in environment. Rural marketing environment changes will be in the area of
a) Social changes
b) Economic changes
c) Ethical changes
d) Political changes
e) Physical changes
f) Technological changes
Figure 1THE MARKETING ENVIRONMENT
Marketing
Organisation
Product & Packaging
Place
Price Promotion
Psychological
Factors
Anthropological
Factors
Price Competition
Consumer
PoliticalPhysical
Technological Ethical
Sociological factors
SOCIAL ECONOMIC

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1.SOCIAL CHANGES:- The social factor consists of three factors,
1) Sociological factor:-
Consumer society or the community is important. The
consumer life style is influenced by the social setup. The social constitution and
changes influence customer habits, taste, and lifestyles.
2) Anthropological factors:-
The reasonable cultures and subcultures and living patterns
influence advertising sales promotion, selling strategies and packing. The consumers
in east India have different taste.
3) Psychological factors:-
Consumer behavior attitudes personality and mental make ups
are unique. The study of behavior is vital to evolve marketing mix.
2. Economic factors:-
1) Competition:-
A good and healthy competition brings in good and overall
improvement in economic activities. It also brings good quality, good quantity and
price.
2) Consumers:-
The consumer today is quite knowledgeable and choosy. His
progress and well being should be the aim of any economic activity.
3) Price:-
Pricing is a delicate issue where it should be market friendly, not
too high or to little. The marketers has to keep in mind to get descent returns on
investment and effects of producers and marketers.
4) Ethical forces:-
Business minus ethical values brings degeneration. In the long run it
brings problems. No standardization, exploitation and falsification are main ethical
values in such organization.
5) Political forces:-
The government polices towards trade and commerce, internal
taxation and preferential treatments have a influence on the marketing strategies. The
marketing environment has to meet the political frame work in which a government is
made to work.
6) Physical forces:-
The infrastructure availability for movement and storage of goods
play an important role in the physical distribution of goods and reaching the
consumers. Efficient and cheaper logistics helps the market in a big way.
7) Technological force:-
The fast changing science and technology gives a cutting edge to the
marketing of products. The changes warrant changes in marketing , inputs and

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strategies. Faster and efficient communication and transport systems have speeded up
marketer. The capital is made to work faster and harder .So in the case with the
marketer, He has to use these new marketing tools and facilities in designing and
implementing his marketing strategies which are adaptive to the change in
environment and ensure success.
Q2) what are the factors influencing rural consumer behavior?
ANS:- The various factors that affect buying behaviour of in rural India are:
1) Environment of the consumer:- the environment or the surroundings in which the
consumer leaves has a very strong influence on the buyer behavior. E.g.:-
electrification, water supply effects demand for durables.
2) Geographic influence:- the geographic location in which the rural consumer is
located also speaks about the thought process of the consumer. For instance, villages
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 in the south.
3) Influence of occupation:- The land owners and service can buy more of category2 &
category3 durables than agricultural laborers.
4) Place of purchase:- Company’s need to access the influence of retailer on both
consumers at village shops.
5) Creative use of product:- The study of product and provides indicators to the
company on the need for education and also for new product ideas.
E.g.:- godrej hair dye being used as a pain to the color horns of ox. Washing machine
being used for making lassie.
6) Brand preference and loyalty:- the people in rural market will not give preference for
brand products but they give importance for loyalty of the product. 80% of the sale is branded
items in 16 product category.
Q3) what are the factors influencing Rural marketing operations?
ANS: - All business operations revolve around understanding customer needs, desires likes
and preference and offering products and services that will give desired satisfaction to the
consumers.
FACTORS INFLUENCING OR CONTRIBUTING CONSUMER BEHAVIOUR:-
a) Environmental
b) Cultural

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c) Social
d) Personal
e) Psychological
a) Environmental :-
I. Economic factors:-
The agricultural and rural development has enabled our
country to achieve self sufficiency in food production and we are now
exporting a variety of agricultural commodities to foreign countries. Favorable
monsoons during the last 10 years have let to increase in crop yields and rural
income. In addition, diversification of a agriculture, development of village
industries, migration of rural people into cities, remittance of money, family
members settled abroad have increased income level and buying power of
villagers.
II. Political factors:-
The government have taken initiative for economic
development of rural areas and have invested heavily in agriculture, irrigation,
electricity, khadi and village industries and infra structure facilities such as
roads, communication, hospitals, school, and banking. The initiatives certainly
let to rural prosperity and opportunities for the marketers.
III. Technological development:-
The rapid expansion of telecommunication facilities and mobile
phone has provided opportunities for rural people to keep in touch with men
and markets. Development of TV networks and reasonable channels has
enabled the marketers to pass on message about product and services to rural
people. In rural areas especially in large villagers and villagers near to towns
and cities, children and youth have accused to information such as job
opportunities, national news, weather conditions, bank loans etc..IT and
internet are sure to spread up exchange of information in rural india though at
a slower rate compare to urban market
IV. Legal :-
The government has come out with legislative measures to protect
the interest of consumers some of the important ones are:-
a. Money lenders:-
The money lenders advance long term loans against security of
land over period of time manipulate the records and seize the land. The government
protects the assets of farmers from money lenders.
b. Consumer protection act:-
Consumer protection act provides protecting the rights and
interest of consumers and we have a quasi judicial machinery operating at 3 levels i.e.
district forum, state and national forum.
V. Cultural factors:-

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a) Culture and sub culture :-
Culture represents an overall heritage a distinctive form
of environmental adaption by whole society of people culture is a system of
shared beliefs and customs that influence the behavior of consumers.
Traditional life, traditional occupation, traditional beliefs are the features of
rural life.
Culture provides people with a sense of identity and an
acceptable behavior with in a society. Technological advances education and
travel have considerable influence on culture and change the rural life style.
Culture offers direction and guidance to the members of a society in all facets
of life. It provides methods of satisfying physiological, personal and social
needs.
b) Sub culture:-
It exists within the dominant culture, with its own set of
values, beliefs and attitudes and behavior pattern. The pattern of behavior
would vary between north and south even in rural areas.
c) Social class:-
Consumer behavior is determine by social class to which
they belong and is determine by a combination of factors like education,
occupation, income and assets. It is seen that over a period of 10years there
has been considerable reduction in the per culture of destitute and increase in
other social classes in rural areas. This is a positive indication of the growing
rural market in our country.
VI. Social factors:-
a) Family:-
Family is a group of persons related by blood, marriage or
adoption who reside together. It is basic social group and consists of
individual known as members. The 3rd
generation family is very common in
rural areas. The head of the family provides economic security to family
members. The members of family play different roles such as influencer
decider and purchaser is the buying process. Personal values, attitudes and
buying habits have been shaped by family influences. Family life cycle also
influences.
b) Reference group:-
It includes family and friends with whom an individual
interacts on a face to face basis. Word of mouth communication is a process
by which the messages are passed within group from one member to another
member. The consumer develops positive opinion towards a product or
service based on admiration (cricket players), aspiration (film stars) or
empathy. The consumer thinks that if he uses it, it must be good if use it, I
will be like him.

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VII. Personal factors:-
a) Age and life cycle:-
Life cycle of a person began with child birth, move to infancy,
teenage, adult, middle age, old, and then ends with death. Under each stage
buying behavior is different.
b) Occupation:-
About 500 millions of population depends upon agriculture for a
living. Income from agriculture is a seasonal and therefore demand
particularly consumer durables is high during post harvested period and
festivals. Many farmers have diversified into fish culture and small scale
industries in order to reduce their dependence on forming and to ensure
regular income. This leads to increase the demand for consumer durables.
c) Economic circumstance:--
Rural income is seasonal compare to an urban consumer who
receives regular income regarding saving habits, traditionally rural people
prefer to invest in jewelry and fixed deposits in banks and posts offices. A
farmer would like to invest these funds for development of agriculture and
buying lands. Another interesting observation is that for the same income
level, a rural consumer has relatively high disposable income.
d) Life style:-
Life style studies how people spend their money and time in day
to day activities. The life style dimensions are activities and demographic
features such as age, gender, occupation, education, and income. Rural
consumes prefer to spend, spare time, in activities. Such as visiting meals i.e.
commodity and religious fairs, company’s can use such meeting places for
product promotion.
e) Personality and self concept:-
Personality is a unique combination of different individual
characteristics. We find that many individuals are similar in terms of one or
more characteristics, but they are not alike in all characteristics. Personality is
a combination of factors such as
sociability, self confidence and dominance. Personality influences in many
ways.
VIII. Psychological factors:-
a) Motivation:-
When a buyer purchases a product or service, he has a reason.
Motive is a strong felling, desire or emotion that makes the buyer to take
decision to buy every human activity is a result of motivation. Each person is
motivated by his needs and satisfaction of one need shows that rural
consumers are satisfied by meeting the 2needs i.e. physical and security need,
where as urban consumers would like to satisfy social and needs .

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Motives can be also classified as psychological and psychogenic motives. In
rural areas there exits large population consisting of agricultural laborer, small
and marginal farmers, petty traders who have very limited income and their
needs are very basic i.e. food clothing and shelter.
b) Perception:-
All consumers are not alike; they see the world in their own
special ways. For instance, all the members of the family have viewed a
particular advertisement in different ways. This is because needs, wants,
values attitudes and personal experience vary from person to person.
Similarly, consumer’s perception means what he thinks about the product,
producer or the brand. Consumer’s action, buying habits, consumption habits
are based on perception and therefore the motor should have good
understanding of perception of consumers.
c) Learning:-
It is a process of acquiring knowledge about products, product
benefits, method of usage and maintenance and also disposal of the products
considering low literacy, low awareness, the marketers have to educate the
consumers through rural- specific promotion media and methods.
d) Belies and attitudes:-
In general attitude is a state of mind or feeling. Attitude
indicates our feeling about a product, service, brand and shop whether we are
positively or negatively disposed towards the object or class of objects.
Consumer attitudes or composed of beliefs, feelings and behavior intentions
towards a product, brand or store.
Belief may be positive, negative or neutral. The belief that
consumer hold need not be correct. Consumers also hold certain feelings
towards product and these feelings are based on the beliefs.
Examples:-
1) Many rural consumers belief that cool drinks are harmful and they prefer
lime juice, butter milk etc.. Change of attitudes and beliefs is very low in the case of
rural consumers. Once he is convinced, he will continue to use the product and
become a loyal consumer.
2) Majority of lower and middle income group continue to use lifeboy and soap and
about 70% of the sales of the life boy is in rural and semi urban areas.
UNIT – 3, 4 AND 5 – COMING SOON

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RURAL MARKET SEGMENTATION
Market segmentation means dividing heterogeneous market into homogeneous sub units into
homogenous sub units here heterogeneous means consider the market as a whole and refers
mass marketing. Homogeneous sub units means which have similar tastes and preferences
but not the same tastes and preferences.
Rural market segmentation is mainly based on demographic factors. The division is based
on the premises the different people have different preferences. The following are the basic
market preferences:-
Homogeneous preferences where consumers have roughly the same preferences.
Diffused preferences where consumers are scattered throughout the market by their
preferences.
Clustered preferences were consumers are found in distinct preference groups.
Degree of segmentation:-
The segmentation is considered as a process with two polar points from zero to complete,
four distinct segment approaches are identifiable as follows
o.s Zero
Type Mass marketing Segment
marketing
Niche
marketing
Micro marketing
Approach Considers all
people
as a bunch
Identity’s people
as a differing
group
Serves very few
groups of
people
Focus on
individuals
are very small
groups
Mass marketing:-
In the early period of the 20th
century many companies practiced mass production and
mass distribution as economics evolved as economy evolved and societies became civilised,
consumer choice and requirements came into focus until now the rural market was considered
as homogeneous mass as worse the Indian market till some 20 years ago. Some companies
depend on mass marketing while many do not.
Segment marketing:-
The principle of segment marketing rests on the realisation that buyer’s differ in their
needs, wants, demands and behaviours. The need for segment marketing arises when
Consumer’s have become more diverse, sophistically and choosy.
Competition has become tuff.

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Niche marketing:-
A niche is very small group with a different set of traits, who seek a special combination of
benefits. Niche marketing identifies special sub groups within larger segments and offers
different products and services.
Micro marketing:-
Micro marketing involves tailoring products and programs to suet the taste of specific
locations and individuals. It includes local marketing and individual marketing.
Local marketing:- It involves in the programs to suit the taste of specific locations
and wants of local group’s on a geographical bases.
Individual marketing:- Individual market is customized marketing or one to one
marketing. Tailoring unitshotels, tourist operators provide individualised services for
example building contractors builds houses of flats to specific requirements of
customers.
Types of rural market segmentation:-
Demographic factors:-
Demographic factors are taken into detailed consideration for market segmentation of
consumer goods and fast moving consumer goods (FMCG). In case of rural marketing i.e. to
sell outside goods in rural areas, demography came into the picture. However the categories
are much reduced. Some of the segmentations are as below.
Occupational segmentation(or)sociological segmentation:-
This segmentation is based on economy vice categorisation. This reflects the purchasing
power of a farmer and therefore the purchase power of his family they are
Artisans, farm labourers
Small farmers
Tenant farmers
Medium level farmers
Large farmers
Very large farmers, zamindars
Artisans and others
This covers carpenters, blacksmiths, handy-crafts, people are unemployed.
Tenant farmers
Working on rented land to share the crops with owners of the land.

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Small farmers
Who own small farms are jointly owned farms for getting food.
Large farmers(or)rich farmers
Who have large lands and all local leaders they spend types in urban areas and doing other
occupation.
Very large farmers, land lords(or)zamindars
Zamindars, rich money lenders and business men who owned big size lands and maintain
large size farm labour. Normally they spend time in nearby urban areas with politicians.
From the above the small farmers and tenant farmers will struggle for basic needs but the
medium level farmers struggle for comforts. But the large farmers will not struggle for basic
needs and comforts.
So the marketers target only large farmers and very large farmers for segmenting the
market.
Thomson rural market index(TRMI)segmentation
Hindustan Thomson associates ltd developed a guide to market segmentation in 1972 and
revised it in 1986. They collected data in 335 districts based on 26 variables finally they
arrived on 10 selected variables having strong co-relation to rural market potential.
Agricultural labourers
Gross cropped area
Gross irrigated area
Area under non-food crops
pump sets.
Fertilisers consumption
Tractors
Rural credit
Rural deposits
& village electrified.
Based on these factors, the districts are classified as A,B,C,D&E. Which are in order
of high potential market to low potential market.

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LINQUEST
This method is software developed by initiative media on data along the following
parameters
Demographic
Agriculture
Income.
Literacy &
Civic amends.
As per the product to be launched, the marketer would be interested in certain parameters
like literacy levels, income levels, bank deposits, accessibility (rail, road, and schools etc). in
the software the marketer can give weighted average to different factors for Eg:- To launch
new audio cassette recorders, parameters could be villages above 1000 population and
monthly income 2000 and distance from nearest towns within 30kms.

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BRANDING:-
Branding is a practise of giving specified name the specified name creates individuality in
the product and it can be easily recognised from rival product the term brand is broadly
applied to all identifying such as trade names, trademarks trade symbols etc… e.g.:- pepsi,
lifeboy are brand names it is recognisable by sight but he’s not normally pronounceable.
The rural consumer likes to stick to brands that give value for money
Importance of branding
1. Branded product can be easily recognised by the customer in the retail shop it offers
protection to the consumer as it identifies the firm behind the product.
2. Branding enables the firm assured control over market. It creates an exclusive market
for the product.
3. If a firm has one or more lines of branded goods it can had a new item to its list
easily & the new item can enjoy all the advantages of branding immediately.
Characteristic of branding
Attributes &benefits:-
Brands of a product plays an important role to attract the rural customers because they
mostly believe in the brands, just by seeing branded products they will purchase assuming
that they will be satisfied by product.
Values :-
By seeing the brand the customers will consider the performance of the product and the
safety of the product some customers felt that prestige while purchasing the branded
products.
Culture:-
By seeing the brand the customer assumes the product is efficient and they also assumes
high quality.
Personality:-
The person who is using that product

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Types of brands
1. Individual brand name
Each product has a special and unique brand name the manufacturer has to
promote each individual brand in the market separately this creates a practical
difficulty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chik
shampoo etc….
2. Family brand name
Family name is limited to one line of a product i.e. products which complete same
cycles family brand name can help combined advertising and sales promotion
however if one member of the family brand is rejected by the consumers or
customers the prestige of all under the family brand may be adversely affected. The
manufacturers have to take extraordinary care to guard against the danger family
brand name enables creation of strong shelf. It helps to secure quick popularity it is
preferable to have separate brands for each product for eg:-amul for milk products,
pounds for cosmetics etc…
3. Umbrella brand name
We may all products such as chemicals, engineering goods, automobiles etc.
Manufactured by the Tata concerns will have the Tata as one umbrella brand such a
device will also obtain low promotion cost and minimise however experience in any
of the line of products, a solitary failure may be very dangerous to the rest of the
products sold by a particular business house under umbrella brand.
4. Combination device
Data house is using combination device each product has individual name to
indicate the business house producing the product eg:- Tata Indica, side by side with
the product image we have the image of the organisation also many companies use
this device profitably.
5. Private or middleman’s brand
Branding can be done by manufacturers or distributors such as wholesalers, large
retailers. In India this practise is popular in the wooden, sport goods and searches
other industries it helps small manufacturers who have to rely on the middlemen for
marketing. It is also used by big manufacturers the manufacturer merely produce
goods as per specifications and requirements of distributors and he need not worry
about marketing. Manufacturers make both national and private or middleman
brands. Consumers of the private or dealers brand.

21
Some of the brand names that have created lasting impact on rural consumers are as
follows:‐
Every day batteries:‐ Battery with cat as a symbol
Lifeboy
Asian paints mascot
Dabur chawan prakash
Parle
Parachute
Amul
Zandubalm
Tata salt
Nirma
Textile:‐ Chermas, Kumar shirts.
Q. Explain the brand awareness in rural marketing?
Ans: Rural product development:‐
                                                                  The rural market is a fast growing one and has a huge
population with a great level of disposable income to encase this; products have to be
specifically developed to meet the creeds of rural market sometimes existing products
might have to be modified to suit these markets too accordingly.
                                                         Rural product development has a strong edifice on a great
deal of research like feasibility, studies, rural aspiration and soon. This paves way for a great
deal of infra structure and expertise in this area.
Rural branding:‐  Rural branding bears  quit different from urban branding. The first step
towards rural branding is to search and gain insight into the working of rural markets. Based
on this communication campaigns products have to be developed with a lot of rural
sensitivity.
Rural market research:‐  rural market behave most differently from urban markets. While
many marketers have tried to market their products in rural areas. Just a hand full of sum
only has succeeded. A strong insight into rural consumer  behaviour and  sensitivity to their
values and beliefs is essential to upgrade the rural market research not just gathering data
but analyzing them and linking the findings to promoting their products. Rural
communication campaigns communication for rural markets calls for a different kind of
outlook. There must be a strong ascent on helping the target relate to message. The entire
communication and media strategy has to device a system based on research findings.
These have to be developed in the regional languages and set in the local culture for easier
acceptance and reach to the customers. Besides mass and outdoor media rural

22
extravaganza (cultures) like temple, festival, melas, and other events where the villagers
come together can be used for promotions.
Rural events: ‐ In the rural context, one of the best ways to capture the attention of the
audience is through event management. Since rural areas have limited venues for
entertainment, conducting an event in rural areas can bring a good response..
Rural direct marketing campaigns: ‐ Direct marketing is one of the most powerful
ways to meet the targets and build product awareness as well as promotion. The success of
any direct marketing campaigns depends on the field workers and their sensitivity and
emotional connectivity to rural markets.
Data base creation and management:‐ Marketing branding and promotional
activities in rural context can be highly effective and thereafter have to create a database of
prospects. This data is essential for marketers to reach their target accurately and helps
marketing plan and communication strategies.

23
RURAL MARKET SEGMENTATIONRURAL MARKET SEGMENTATIONRURAL MARKET SEGMENTATIONRURAL MARKET SEGMENTATION
Market segmentation means dividing heterogeneous market into homogeneous sub units into
homogenous sub units here heterogeneous means consider the market as a whole and refers
mass marketing. Homogeneous sub units means which have similar tastes and preferences
but not the same tastes and preferences.
Rural market segmentation is mainly based on demographic factors. The division is based
on the premises the different people have different preferences. The following are the basic
market preferences:-
Homogeneous preferences where consumers have roughly the same preferences.
Diffused preferences where consumers are scattered throughout the market by their
preferences.
Clustered preferences were consumers are found in distinct preference groups.
Degree of segmentation:-
The segmentation is considered as a process with two polar points from zero to complete,
four distinct segment approaches are identifiable as follows
o.s Zero
Type Mass marketing Segment
marketing
Niche
marketing
Micro marketing
Approach Considers all
people
as a bunch
Identity’s people
as a differing
group
Serves very few
groups of
people
Focus on
individuals
are very small
groups
Mass marketing:-
In the early period of the 20th
century many companies practiced mass production and
mass distribution as economics evolved as economy evolved and societies became civilised,
consumer choice and requirements came into focus until now the rural market was considered
as homogeneous mass as worse the Indian market till some 20 years ago. Some companies
depend on mass marketing while many do not.
Segment marketing:-
The principle of segment marketing rests on the realisation that buyer’s differ in their
needs, wants, demands and behaviours. The need for segment marketing arises when
Consumer’s have become more diverse, sophistically and choosy.
Competition has become tuff.

24
Niche marketing:-
A niche is very small group with a different set of traits, who seek a special combination of
benefits. Niche marketing identifies special sub groups within larger segments and offers
different products and services.
Micro marketing:-
Micro marketing involves tailoring products and programs to suet the taste of specific
locations and individuals. It includes local marketing and individual marketing.
Local marketing:- It involves in the programs to suit the taste of specific locations
and wants of local group’s on a geographical bases.
Individual marketing:- Individual market is customized marketing or one to one
marketing. Tailoring unitshotels, tourist operators provide individualised services for
example building contractors builds houses of flats to specific requirements of
customers.
Types of rural market segmentation:-
Demographic factors:-
Demographic factors are taken into detailed consideration for market segmentation of
consumer goods and fast moving consumer goods (FMCG). In case of rural marketing i.e. to
sell outside goods in rural areas, demography came into the picture. However the categories
are much reduced. Some of the segmentations are as below.
Occupational segmentation(or)sociological segmentation:-
This segmentation is based on economy vice categorisation. This reflects the purchasing
power of a farmer and therefore the purchase power of his family they are
Artisans, farm labourers
Small farmers
Tenant farmers
Large farmers
Very large farmers, zamindars
Artisans and others
This covers carpenters, blacksmiths, handy-crafts, people are unemployed.
Tenant farmers
Working on rented land to share the crops with owners of the land.

25
Small farmers
Large farmers(or)rich farmers
Who have large lands and all local leaders they spend types in urban areas and doing other
occupation.
Very large farmers, land lords(or)zamindars
Zamindars, rich money lenders and business men who owned big size lands and maintain
large size farm labour. Normally they spend time in nearby urban areas with politicians.
From the above the small farmers and tenant farmers will struggle for basic needs but the
medium level farmers struggle for comforts. But the large farmers will not struggle for basic
needs and comforts.
So the marketers target only large farmers and very large farmers for segmenting the
market.
Thomson rural market index(TRMI)segmentation
Hindustan Thomson associates ltd developed a guide to market segmentation in 1972 and
revised it in 1986. They collected data in 335 districts based on 26 variables finally they
arrived on 10 selected variables having strong co-relation to rural market potential.
Agricultural labourers
Gross cropped area
Gross irrigated area
Area under non-food crops
pump sets.
Fertilisers consumption
Tractors
Rural credit
Rural deposits
& village electrified.
Based on these factors, the districts are classified as A,B,C,D&E. Which are in order
of high potential market to low potential market.

26
LINQUEST
This method is software developed by initiative media on data along the following
parameters
Demographic
Agriculture
Income.
Literacy &
Civic amends.
As per the product to be launched, the marketer would be interested in certain parameters
like literacy levels, income levels, bank deposits, accessibility (rail, road, and schools etc). in
the software the marketer can give weighted average to different factors for Eg:- To launch
new audio cassette recorders, parameters could be villages above 1000 population and
monthly income 2000 and distance from nearest towns within 30kms.
BRANDING:-
Branding is a practise of giving specified name the specified name creates individuality in
the product and it can be easily recognised from rival product the term brand is broadly
applied to all identifying such as trade names, trademarks trade symbols etc… e.g.:- pepsi,
lifeboy are brand names it is recognisable by sight but he’s not normally pronounceable.
The rural consumer likes to stick to brands that give value for money
Importance of branding
1. Branded product can be easily recognised by the customer in the retail shop it offers
protection to the consumer as it identifies the firm behind the product.
2. Branding enables the firm assured control over market. It creates an exclusive market
for the product.
3. If a firm has one or more lines of branded goods it can had a new item to its list
easily & the new item can enjoy all the advantages of branding immediately.
Characteristic of branding
Attributes &benefits:-
Brands of a product plays an important role to attract the rural customers because they
mostly believe in the brands, just by seeing branded products they will purchase assuming
that they will be satisfied by product.
Values :-

27
By seeing the brand the customers will consider the performance of the product and the
safety of the product some customers felt that prestige while purchasing the branded
products.
Culture:-
By seeing the brand the customer assumes the product is efficient and they also assumes
high quality.
Personality:-
The person who is using that product
Types of brands
1. Individual brand name
Each product has a special and unique brand name the manufacturer has to
promote each individual brand in the market separately this creates a practical
difficulty in promotion otherwise it is best marketing strategy eg:- surf, cinthol, chik
shampoo etc….
2. Family brand name
Family name is limited to one line of a product i.e. products which complete same
cycles family brand name can help combined advertising and sales promotion
however if one member of the family brand is rejected by the consumers or
customers the prestige of all under the family brand may be adversely affected. The
manufacturers have to take extraordinary care to guard against the danger family
brand name enables creation of strong shelf. It helps to secure quick popularity it is
preferable to have separate brands for each product for eg:-amul for milk products,
pounds for cosmetics etc…
3. Umbrella brand name
We may all products such as chemicals, engineering goods, automobiles etc.
Manufactured by the Tata concerns will have the Tata as one umbrella brand such a
device will also obtain low promotion cost and minimise however experience in any
of the line of products, a solitary failure may be very dangerous to the rest of the
products sold by a particular business house under umbrella brand.
4. Combination device
Data house is using combination device each product has individual name to
indicate the business house producing the product eg:- Tata Indica, side by side with
the product image we have the image of the organisation also many companies use
this device profitably.
5. Private or middleman’s brand
Branding can be done by manufacturers or distributors such as wholesalers, large
retailers. In India this practise is popular in the wooden, sport goods and searches
other industries it helps small manufacturers who have to rely on the middlemen for

28
marketing. It is also used by big manufacturers the manufacturer merely produce
goods as per specifications and requirements of distributors and he need not worry
about marketing. Manufacturers make both national and private or middleman
brands. Consumers of the private or dealers brand.
`1 Some of the brand names that have created lasting impact on rural
consumers are as follows:-
Every day batteries:- Battery with cat as a symbol
Lifeboy
Asian paints mascot
Dabur chawan prakash
Parle
Parachute
Amul
Zandubalm
Tata salt
Nirma
Textile:- Chermas, Kumar shirts.
Q. Explain the brand awareness in rural marketing?
Ans: Rural product development:-
The rural market is a fast growing one and
has a huge population with a great level of disposable income to encase this;
products have to be specifically developed to meet the creeds of rural market
sometimes existing products might have to be modified to suit these markets too
accordingly.
Rural product development has a strong edifice
on a great deal of research like feasibility, studies, rural aspiration and soon. This
paves way for a great deal of infra structure and expertise in this area.
Rural branding:- Rural branding bears quit different from urban branding. The
first step towards rural branding is to search and gain insight into the working of rural
markets. Based on this communication campaigns products have to be developed
with a lot of rural sensitivity.
Rural market research:- rural market behave most differently from urban markets.
While many marketers have tried to market their products in rural areas. Just a hand
full of sum only has succeeded. A strong insight into rural consumer behaviour and
sensitivity to their values and beliefs is essential to upgrade the rural market
research not just gathering data but analyzing them and linking the findings to
promoting their products. Rural communication campaigns communication for rural
markets calls for a different kind of outlook. There must be a strong ascent on

29
helping the target relate to message. The entire communication and media strategy
has to device a system based on research findings. These have to be developed in
the regional languages and set in the local culture for easier acceptance and reach
to the customers. Besides mass and outdoor media rural extravaganza (cultures)
like temple, festival, melas, and other events where the villagers come together can
be used for promotions.
Rural events: - In the rural context, one of the best ways to capture the attention
of the audience is through event management. Since rural areas have limited venues
for entertainment, conducting an event in rural areas can bring a good response..
Rural direct marketing campaigns: - Direct marketing is one of the most
powerful ways to meet the targets and build product awareness as well as
promotion. The success of any direct marketing campaigns depends on the field
workers and their sensitivity and emotional connectivity to rural markets.
Data base creation and management:- Marketing branding and promotional
activities in rural context can be highly effective and thereafter have to create a
database of prospects. This data is essential for marketers to reach their target
accurately and helps marketing plan and communication strategies.
Q) What is meant by Product? And explain it with different strategies in rural
market?
Ans: Product is the most tangible and important dingle
component of the marketing program. Without product, there is nothing to distribute promote
and to price. Product is a vehicle by which a company provides consumer satisfaction. A
product is a bundle of benefits assembled in an identifiable form. In simple terms, products
are anything that satisfies human wants. The product mix includes product quantity, features,
benefits, design, style, colors, brand packaging, labeling, services and warranties.
Product market strategies:-
Markets have the following alternations to increase market share and profits
Existing product New product
Existing
markets
Market penetration Product development (or) product
differentiation
New markets Market development Diversification
Market penetration:- It involves expansion of sales of existing products in existing
markets by selling more to present customers or gaining new customers in existing market.
The firm can market its present products to existing markets. This is done through more
aggressive marketing mix.

30
Market development:- In Market development a present product is introduced to a
new market or a segment . Market development is the creation of new market by discovering
new application for existing goods. This is another alternative to expand market opportunity,
prolong product life cycles, profitability and survival.
Ex:- many companies are extending their activities to rural market to increase sales volume of
products like mineral water, chocolate, mobile phones etc.
Product development:- Product development occurs when a firm introduces new
products to a market in which it is well established. Product development is the introduction
of new products in present market.
Ex:- New syntactic fibers are known for textile products. The firm may decide to create new
products for existing market.
Diversification:- Diversification occurs when a firm seeks to enter a new market
with completely new product. The innovations are introduced for the first time in the new
markets. The strategy is risky but the innovator can have speculator results.
Product strategies in rural market:- product strategies used by company’s in rural
markets are given below
Sturdy products:- most of the rural consumers believe that
heavier the item, higher the power and durability, they prefer tough and long
lasting product.
EX:- bullet motor cycle continuous to be popular in villages; royal Enfield
sells about 65% of two wheelers in semi urban and rural areas; ambassador
cars continuous to be popular in rural areas.
Designing products:- The company’s can come out with new
products or promote existing products to suit field conditions in rural areas.
EX:-
• L.G electronics came out with a unique product for rural market. It
launched sampoorna Indias first T.V with a Devanagari script on
screen display.
• Voltas has introduced a refrigerator for rural areas direct cold
technology keeps the refrigerator cold for several hours in case of long
power cut.
• Nokia’s basic model is dust resistant and has a mini torch light for
using in rural areas.
Small unit packing:- It has been used for money consumer
products . Small units packing provide an opportunity for the consumers to try
the product and help the company to reach consumers like daily wage
earners.
EX:-

31
• Ponds has gain market share over the past few years, focusing on rural
market ant it has introduced 20grams talcum powder.
• Cavin kare studied rural buyer behavior and introduced chik shampoo
in small sachet of 4ml at a low price of 50ps.
• Rasnna is now available in sachet pack priced at 1rupee each and one
sachet will make 2 glasses of soft drink
• Godrej Sara lee has single coiled sachet of goodnight coil for rural
products
Utility products:- The rural people are concerned with the
utility of the items rather than appearance or show
EX:-
• Philips has introduced free power radio RL117 priced at 995/- for the
first time in India. The radio requires no external battery’s or electricity
for operation.
• HMT watches are popular for utility value.
Q) What is meant by pricing and explain factors influencing
pricing?
Sol:- Economists defines price as the exchange value of a
product or service always expressed in terms of money. In simple terms price is the
amount charged for the product or service.
To the buyer price is a package of expectations and
satisfaction. To the seller price is a source of revenue and main determinant of profit.
Factors influencing pricing decisions:-
1.Objectives:- many companies have established marketing goals or objectives
such as growth in sales, profits, market share and pricing plays a major role in
achieving the objectives.
2.cost of production:-The most decisive factor in pricing is the cost of
production. In the past, fixing of price was a sample affair: just add up all the costs
incurred and divide the final figure by the number of units produced.
The main defect with this approach is that it disregards the external
factors, particularly demand and the value placed on goods by the ultimate
consumer. Today on account of the various lines of production as well as
distributing, the overhead costs finding the cost of production are not simple.
3)Demand:- in the consumer oriented marketing , the consumers influence the
price. Every product has some utility for the buyer. It gives the buyer service,

32
satisfaction, pleasure; the consumer would continue to buy the product. Higher the
demand for a product, lesser the need for giving additional discounts, credit, etc.. To
the distributors and dealers. This leads to higher price realization.
4)Competition:- another factor that influence pricing is competition. No
manufacture is free to fix his price without considering competition, unless he has a
monopoly.
To avoid competitive pricing, a firm may decide that its
product may be sufficiently different from that of the others. This is achieved through
methods of advertising, branding etc.. Sometimes a higher price may itself
differentiate the product. This is known as prestige pricing.
5)Distribution channels:- Distribution channels also sometimes affect the
price. There are many middlemen working in the channel of distribution between the
manufacturer and the consumer. Each one of them has to be compensated for the
services rendered.
6)Supply of the product:-if the supply is less than demand, then the price of
the product will be more.
7)Availability of raw materials:- Availability of raw materials in domestic
markets generally enable the firm to bring down cost of production. The firm can fix a
low selling price.
8)If the brand is very popular among the consumers, then the manufacturer can
charge a higher price for the product.
9)If the purchasing power of the consumer is high, then the company can charge a
higher price for the product.
10) Promotion cost would normally increase the selling price as the company would
like to recover the cost from the consumers.
Q) What is meant by pricing and explain kinds of pricing?
Sol:- Economists defines price as the exchange value of a
product or service always expressed in terms of money. In simple terms price is the
amount charged for the product or service.
To the buyer price is a package of expectations and
satisfaction. To the seller price is a source of revenue and main determinant of profit.
Kinds of pricing:-

33
A firm may choose various kinds of pricing for their products:-
1) odd pricing:- odd price may be a price ending in odd number or a price just
under a round number. Such a pricing is adopted generally by the seller of specialty
or convenience goods.
E.g.. Bata shoes are priced at399.95. Odd price may bring more sales. Under odd
pricing, buyers may feel that it is a mark down price.
2) Psychological pricing:- it is stated that there are certain critical points
at prices such as 1,2,4,5,10 are psychologically appearing to consumers.
E.g.. Products such as shampoo, chocolates and biscuits are sold at certain price to
attract customers.
3) Prestige pricing:- prestige pricing is one that is fixed at a higher price, when
the producers near perfect substitute. Prestige pricing is adopted because many
customers feel that high price means high quality. Moreover the customer heels a
high status at a high price.
4) Consumers expectations:- such prices are fixed by consumers.
Consumers are familiar with the rates and market condition and expect a particular
price to be charged for certain products.
5) Geographical pricing:- the distance between the seller and the buyer is
considered on Geographical pricing. When there is lot of distance between
production center and consumption centre, the producer or marketer can adopt
different prices in each area without creating any ill/will among customers. There are
two ways of charging transit cost.
a) F.O.B pricing( free on board):- F.O.B may be of two types…
i) F.O.B origin and F.O.B destination:- in the first case, the buyers will have
to incur the cost of transit a part from the price quoted and in the latter the price
quoted is inclusive of transit charges.
6)Zone pricing:- price is equal in the same zone. Market for a product is divided
into various zones. South zone, north zone etc.. In other words price are uniform with
in a zone.
7) price lining:- price lining is formed more commonly among retailers than
among wholesaler or producers. This system consists of selecting a limited number
of prices at which the store will sell it goods. E.g. A buyer of shirt can go into a
shop where shirts are retailed between 250/- t 500/-, it also helps the shopkeeper to
plan his purchases..

34
8)dual pricing:- when a manufacturer sells the same product at two different
prices, it is dual pricing. Under the dual pricing a producer is required compulsory to
sell a part of production to the govt or its authorized agency at substantially low
price. The rest of the product may be sold in the open market at a price fixed by the
producers.
Eg. Sugar.
9)Negotiated pricing:- it is also known as variable pricing. This method is
invaluably adopted by industrial suppliers. In certain cases, the product may be
prepared on the basis of specification or designed by the buyer. In such cases the
pricing has to be negotiated and then fixed.

35
DISTRIBUTION IN RURAL MARKET
Introduction:-
The rural consumers normally purchase their household requirements from
village shops, haats and mandi towns. There are 60lakh outlets, both in urban and rural markets
in India. Out of this, 36lakh retail outlets are spread over 6lakh villages and making the products
available in the store shelves is a challenge for the marketer.
Obstacles to reach the rural consumers:-
1. The distribution chain requires a large number of intermediaries and this increase the
cost of distribution.
2. Non-availability of dealers.
3. Poor viability of retail outlets due to low business volume.
4. Inadequate banking facilities.
5. Only about 80% of the markets are connected by roads.
6. Interior village roads get flooded during monsoon.
7. Transport and communication facilities are generally poor in villages.
8. Credit requirement of channel members.
Channels of distribution:-
Marketing channel is the route taken by the title to the product as it
moves from the producer to the ultimate consumer. Every marketing channel starts with the
producer and ends with the consumer. It͛s a two-way communication. Consumers purchase
goods through such channels and producers reach the consumers through marketing channels.
The channel members consist of wholesalers and retailers who are middlemen in distribution
and they perform all marketing functions.

36
0 level 1 level 2 level 3 level 4 level
Manufacturer
consumer
Manufacturer
Retailer
Consumer
Manufacturer
Distributor
Retailer
Consumer
Manufacturer
C&F agent
Distributor
Retailer
Consumer
Manufacturer
C&F agent
RuralDistributor
wholesaler
Retailer
Consumer
1. Manufacturer- Consumer(Direct sale):- In this case, the stocks are directly
supplied to the ultimate consumer avoiding middlemen and their commission. This benefits the
consumer as well as the seller.
Examples:- in many states, the government has encouraged farmers to sell
vegetables directly to urban consumers by setting up ͞farmers market͟. These markets are
known as Rythu Bazzars (Andhra Pradesh) and vivasayigal santhai (Tamilnadu). These markets
are run by government and only farmers are allowed to sell the agricultural produce to the
consumers in the market. The market works both in the morning and evening hours. The
market committee in consultation with farmers fixes the rates for different commodities. The
farmers come from about 25 villages surrounding the city and are allotted stalls by the market
committee. The market committee also provides cold storage facilities for perishable
commodities.
2. Manufacturer- Retailer-Consumer:-
Here, the stocks are sold to the consumers through a network
of retailers.
Examples:- Mahindra and Mahindra tractors have appointed dealers in important rural
markets. A dealer either covers one district or two ʹthree tehsils. The company arrange for
supply of tractors to these retailers from their manufacturing unit. The dealer looks after sale
and service of tractors.

37
3.Manufacture-distributor-retailer-consumer:-
The manufacturer appoints distributors in key rural markets and
these distributors cater the needs of retailers in villages. This is a popular channel option used
by manufactures.
Examples:- Manufacturers of tea, coffee and branded oil, appoint distributors in district/
taluka headquarters and distributors service the retailers in villages.
4.Manufacturer-company-depot/C&F agent-Distributor-Retailer-Consumer:-
In this case, the manufacturer moves the stocks to company
depot/depot operated by a C&F agent and from these depots, stocks are supplied directly to
distributors, who in turn service the retailers.
Example:- Agro-chemical companies like Syngenta, are using two/three intermediaries to
reach the farmers in remote villages.
5.Manufacturer-company-depot/C&F agent-Rural Distributor-Wholesaler-
Retailer-Consumer:- The manufacturer opens his own depots or appoints
C&F agents in state capital or in key cities in each state. The C&F agent, supply stocks to rural
distributors. From the rural distributors, the stock move through wholesalers and retailers to
reach the ultimate consumers.
Examples:- Distribution of consumer products by companies like HUL, Dabur, Nirma, Parle,
Marico in rural market.
Physical distribution:-
Physical distribution activities include order processing, handling of
goods, packaging, ware housing, transportation, inventory control, banking and customer
service. Considering the constraints in physical distribution of stocks in rural areas, many
companies have come out with innovative solutions.
1) Company owned delivery vans:- The van may be owned by the company
or distributor. The delivery van takes the product to the retail shops in village. The

38
distributors salesperson travels in the van and he delivers the stocks to the retailer and
collects the money too.
Examples:- Bharat petroleum has introduced rural marketing vehicle(RMV) way
back in 1999 in Punjab. The vehicle moves from village to village and fills LPG cylinders
on the spot to rural customers.
2. Hired vans:- In this case, the wholesaler uses a hired vehicle to cover the retailers in
villages. Normally, the cost of operation of the hired vehicle is shared between the
wholesaler and the company.
Examples:- (a) HUL distributors use hired vehicle to reach the rural retailers.
(b) Syngenta distributors use hired vehicles for delivery of pesticides as well as for
collections.
3.bullock carts or camels:- these are used for covering remote villages with no motor
able road. In certain parts of Kerala, A.P and Westbengal, boats also used to cover villages
that are not connected by roads.
4. Syndicate van distribution:- In this case, the firms/distributors selling non-competitive
consumer goods come together to service the rural retailers. The delivery van carries the product of
both the companies.
Example:- A firm manufacturing edible oils and another local firm dealing in biscuits,
namkeen and Atta could jointly service rural retailers, through van operation.
Conclusion:- The rural markets and the consumers are scattered over a wide
geographical area. Considering low income of consumers, low density of population, poor
condition of roads, it becomes a difficult and uneconomical to individually service all the
villages. The marketers have to follow a selective approach, based on market potential in
developing a network of distributors and retailers in rural markets.

Rural marketing

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