1. THE UNIVERSITY OF BURDWAN
CENTRE FOR MANAGEMENT
STUDIES
DEPARTMENT OF BUSINESS
ADMINISTRATION
A PRESENTATION ON
RURAL MARKET

2. Presented By
RAJORSI PANJA
panjarajorsi@gmail.com
9832916990/9531699016
Presented to-
Prof.Debmalya Dutta

3.  The term ‘rural marketing’ used to be
an umbrella term for the people who
dealt with rural people in one way or
other. It got a separate meaning and
importance after the economic
revaluation in India after 1990.
 Rural marketing is defined as managing all the activities
involved in assessing, stimulating and converting the
purchasing power of the rural consumers into effective
demand for specific products and services and moving them to
the people in rural areas to create satisfaction and a better
standard of living and thus achieving organizational
objectives.
INTRODUCTION

4. Marketing channels are routes through which
rural products move from producers to consumers
• Cleary the main challenge that one faces while
dealing with rural marketing is the basic
understanding of the rural consumer who is very
different from his urban counter part. Also
distribution remains to be the single largest
problem marketers face today when it comes to
going rural. "Reaching your product to remote
locations spread over 600,000 villages and poor
infrastructure - roads, telecommunication etc and
lower levels of literacy are a few hinges that
come in the way of marketers to reach the rural
market
RURAL MARKETING CHANNELS

5.  Classification
The rural consumers are classified into the following
groups based on their economic status:
The Affluent Group
• They are cash rich farmers.
• Very few in number.
• They have affordability but do not form a demand base
large enough for marketing firms to depend on.
• Wheat farmers in Punjab and rice merchants of Andhra
Pradesh fall in this category.
RURAL CONSUMER

6. The Middle Class
• One of the largest segments for manufactured goods.
• It 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 strength
is more.
• They receive grants from the government
and reap the benefits of many such schemes and may move
towards the middle class.
• The farmers of Bihar and Orissa fall under this category.

7.  Characteristics
• The rural consumer has a very high involvement in any
product purchased.
• He purchases products more often (mostly weekly), usually in
small quantities.
• He is very quality conscious but value
for money is of prime importance.
• He looks more for functionality of the
product rather than frills associated which
he cannot use but for which he will have
to pay extra.
• He is brand loyal. Once loyalty formed is difficult to dislodge.

8. • He understands symbols and colours better, and looks for
endorsement by local leaders or icons.
• The source of information is critical for him, as he is
influenced by information received and opinion formed
through various resources in his
purchasing decisions.
• Purchasing decisions are usually taken
by the eldest member of the family.
• Brisk buying is done after the harvesting
period. Major purchasing is done during
the festivals.
• In many cases, the buyer is different from
the user.

9. • Rural Push Policy of UPA Government
• Four Consecutive years of positive growth in
rural GDP
• 40% hike in MSP of Crops over last two years
• Farm Loan Waiver & NREGS
• Growing Industry Demand for land (Overnight
Why Rural Marketing is hot?
Wealth)
• Big rise in remittances from Cities
• Slowing urban demand forcing corporates to
rural markets

10. Rural Marketing is a new discipline because:-
• India is a predominantly agrarian society.
• Western Marketing has no experience to
manage it.
• Urban markets are saturating in India.
• There are immense opportunities at the
bottom of the pyramid.
• R. M. can change rural business.
• Retail boom will also expedite the growth of
rural marketing.
Why Rural Marketing is a New Discipline

11. • Large population
• Rising prosperity
• Growth in consumption
• Life-style changes
• Life-cycle advantages
• Market growth rates higher than Urban
• Rural marketing is not expensive
• Remoteness is no longer a problem.
Whether Rural Markets are Attractive

12. The Rural Marketing Matrix
(Market)
Handicrafts, Handloom
Textiles, Leather
products (Semi-organised)
Farm & Non-Farm
and services
(Unorganised Sector)
Rural
Brand Consumables
and durables
(Organised)
Urban
Scope of
Rural Marketing

13. LIFE OF RURAL PEOPLE

14. YEAR AGRICULTURE,
HUNTING,
FORESTRY
AN D FISHING
INDUSTRY MANUFA
CTURIN
G
Rural employment(in millions)
CONSTRUC
TION
SERVICES
1999-00 218.3 32.6 21.2 9.4 35.5
2004-05 249.4 47.0 27.8 16.8 46.7
2009-10 229.0 58.6 24.2 31.7 49.5

15. Large market
Growing purchasing
power
Increasing aspirations
Enablers such as
financing
Infrastructure
Development
Diversity in tradition
and culture
Lack of distribution
channels
Poor understanding
of customers
Opportunities
Challenges
Why Rural market

16. Opportunities
Large
Customer Base
• 70% of Population
Purchasing
Power
• Increase in Minimum Support Price (MSP)
•National Rural Employment Guarantee Scheme (NREGS)
• Sixth Pay Commission
• Farm loan waiver
Enablers
• Strong credit structure with Regional Rural Banks (RRBs)
• Kisan Credit Card (KCC)
• Cooperative societies have been the traditional source of finance in rural areas
Infrastructure
• Infrastructural development in India's rural belt has gained momentum in recent years
• The Pradhan Mantri Gram Sadak Yojana (PMGSY)
• Telecom Penetration

17. • Appointing a local resident of the village as a
salesman has also been a successful selling strategy
• This strategy has been named as ‘Sons of Soil’
• The RSE tries to generate sales enquiries from local
government offices, banks, schools, hospitals, etc.
• Rural customers feel more comfortable interacting
with a local person
Resident Sales Executives

18. • Conventionally it looks that since rural consumers are
dispersed, reaching them is costly.
• But according to a research, it costs roughly Rs.1 Crore to
promote a consumer durable inside a state including the
expenses of advertising in vernacular newspapers, television
spots, in-cinema advertising, radio, and point of purchase
promotion.
• Campaigns like this, which can reach millions, costs twice as
much in urban areas.
Rural marketing is not expensive

19.  4 A’s Approach
1.Availability
Strive to reach at least 13 113 villages with a population
market penetration.
2.Affordability
Introduce small unit packs
3.Acceptability
• Offers products and services that suit the rural market
• Easy to understand
4.Awareness
• One on one contact programs are extremely efficient.
• Educate and try to induce trial.
STRATEGIES

20.  Distribution strategy
Using company delivery vans, melas,
haats, and mandis/ agri markets.
 Promotional strategy
• Rich traditional media forms like
puppetry, folk dances, audio visuals,
etc. should be used to convey the
right message to the rural folk.
• Forms with which the rural
consumers are highly comfortable with should be used.

21. Rural development is a strategy designed to improve the
economic and social life of rural poor.
It is a process, which aims at improving the well being and
self realization of people living outside the urbanized areas
through collective process.
Rural Development is all about bringing change among
rural community from the traditional way of living to
progressive way of living. It is also expressed as a
movement for progress.

22. “Rural Development is a process of change, by
which the efforts of the people themselves are
united, those of government authorities to
improve their economic, social and cultural
conditions of communities in to the life of the
nation and to enable them to contribute fully to
national programme.”
The United Nations defines
Rural Development as:

23. INFA-STRUCTURE
TECHNO
LOGY
ECONOMY
EDUCATION HEALTH
DEV. IN RURAL AREA CAN BRING

24. Satellite dish antennas reach rural India

25. In 2000, ITC took an initiative to develop
direct contact with farmers who lived in far-flung
villages in Madhya Pradesh. ITC's E-choupal
was the result of this initiative.

26. Typical shop in rural India stocked with sachets, etc

27. RURAL DEVELOPMENT

28.  HUL with its Project Shakti has already
has a reach of 1.7 lakh villages, and
aspires to reach 5 lakh villages by
2020.
 In 2001-02, LIC sold 55% of its
policies in rural India.
 Mahindra & Mahindra sells most of
its SUVs in the rural market.

29. SOME NOTEWORTHY SUCCESS
STORIES
 "Yaara da Tashan..." ads with Aamir Khan
created universal appeal for Coca Cola.
Coca-Cola India tapped the rural market
in a big way when it introduced bottles
priced at Rs 5 and backed it with the
Aamir Khan ads.
 In 2000, ITC took an initiative to develop
direct contact with farmers who lived in
far-flung villages in Madhya Pradesh.
ITC's E-chaupal was the result of this
initiative.

30. ITC. Touching your life. Everyday