SYNOPSIS
On
RURAL MARKETING
For the partial fulfillment of the requirement of
MASTER OF BUSINESS ADMINISTRATION
IN
MARKETING AND HR
Affiliated to Mahamaya Technical University, Noida (U.P.)
(2011-2013)
Under The Guidance of: Submitted by:
DR. AVIJIT DEY ANUJ KUMAR
(Faculty Guide) Roll No.1168470034

RURAL MARKETING
CONTENTS
S.NO. SUBJECTS PAGE NO
1 INTRODUCTION
2 OBJECTIVE OF THE STUDY
3 PROBLEM/SCOPE OF THE STUDY
4 RESEARCH METHODOLOGY
5 DATA ANALYSIS
6 IMPORTANCE OF STUDY
7 SUGGESTION
8 CONCLUSION
9 BIBILOGRAPHY

INTRODUCTION
The predominantly rural character of India’s national economy is reflected in the very
high proportion of its population living in rural areas. The predominantly rural character
of India’s national economy is reflected in the very high proportion of its population living
in rural areas. With more than 700 million people living in rural areas, in some 5,80,000
villages, about two—third of its workforce was engaged in agriculture and allied
activities with a contribution of 29 percent of India’s Gross Domestic Product (GDP),
India’s economy is predominantly rural in character. India’s economy can be thought of
as comprising of two main sectors, namely, the Rural Sector and the Urban Sector. The
Rural sector is, in turn, composed of two main sub sectors i.e. the agricultural sub
sector and the non-agricultural sub sector. Till recently, the focus of marketers in India
was the urban consumer and by large number specific efforts were made to reach the
rural markets. But now it is felt that with the tempo of development accelerating in rural
India, coupled with increase in purchasing power, because of scientific agriculture, the
changing life style and consumption pattern of villagers with increase in education,
social mobility, improved means of transportations and communication 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
changed. Because of all the above factors, rural India in now attracting more and more
marketers.
Rural marketing has become the latest mantra of most corporate. Companies like
Hindustan 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 reaching the rural customer, understanding their needs and
wants, supply of goods and services to meet their requirements, carrying out after sales
service that leads to customer satisfaction and repeat purchase/sales. Earlier, the
general impression was that the rural markets have potential only for agricultural inputs
like seed, fertilizers, pesticides, cattle feed and agricultural machinery. There is a
growing market for consumer goods as well.

OBJECTIVE
The concept and scope of rural markets
The nature and attractiveness of rural markets
Roadblocks of Indian Rural Markets
Solutions to problems of rural markets
India is a land of diversity and about 70% of the Indian population lives in villages.
These villages contribute in the economic development of the nation through the
production of food grains, vegetables, fruits, etc. Export of these agricultural
commodities result in the generation of capital and earnings of foreign exchange.
Rural marketing involves the process of developing, pricing, promoting, distributing rural
specific product and a service leading to exchange between rural and urban market
which satisfies consumer demand and also achieves organizational objectives.
There are several roadblocks that make it difficult to progress in the rural market.
Marketers encounter a number of problems like dealing with physical distribution,
logistics, proper and effective deployment of sales force and effective marketing
communication when they enter rural markets.
Indian rural market has a vast size and demand base. Rural marketing involves the
process of developing, pricing, promoting, distributing rural specific product and a
service leading to exchange between rural and urban market which satisfies consumer
demand and also achieves organizational objectives. As part of planned economic
development, the government is making continuous efforts towards rural development.

PROBLEMS/ SCOPE OF THE STUDY
The rural market may be attracting marketers but it is not without its problems: Low per
capita disposable incomes that is half the urban disposable income; large number of
daily wage earners, acute dependence on the vagaries of the monsoon; seasonal
consumption linked to harvests 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 marketers are
meeting the consequent challenges of availability, affordability, acceptability and
awareness in rural market.
Features of Rural market:
• Large and scattered market
• socio economic background
• Changing demand pattern
• Major income come from agriculture
• Saving habit
• Low standard of living
• Poor infrastructure facilities
• Media reach
• Communication
• Electrification
Scope/ Attractiveness of Rural Market:
• Large Population
• Rising Rural Prosperity
• Growth in Consumption
• Changing Lifestyle
• Life Cycle Advantage
• Market Growth Rate Higher than Urban
• Rural Marketing is not Expensive

RESEARCH METHODOLOGY
Type of Research : Descriptive and conclusive
Data type : Secondary
Data collection source : Magazines, journals, Books
And Internet.
Introduction:-
This chapter aims to understand the research methodology establishing a framework of
evaluation and revaluation of primary and secondary research. The techniques and
concepts used during primary research in order to arrive at findings; which are also
dealt with and lead to a logical deduction towards the analysis and results.
RESEARCH DESIGN
I propose to first conduct a intensive secondary research to understand the full impact
and implication of the industry, to review and critique the industry norms and reports, on
which certain issues shall be selected, which I feel remain unanswered or liable to
change, this shall be further taken up in the next stage of exploratory research. This
stage shall help me to restrict and select only the important question and issue, which
inhabit growth and segmentation in the industry.
The various tasks that I have undertaken in the research design process are:
 Defining the information need
 Descriptive and casual research.

DATA ANALYSIS
STEPS in the data analysis:
 Statement of the problem
 Identification of information needed to solve the problem
 Selection or development of instruments for gathering the information
 Identification of target population and determination of sampling Plan.
 Design of procedure for information collection
 Collection of information
 Analysis of information
 Generalizations and/or predictions

IMPORTANCE OF STUDY
The study is based totally on secondary data and such data relates to something of the
past and not the exact present scenario. Hence totally depending on such given data
could at timesbe misleading, that is no matter how good the report is one has to do
certain amount of homework before jumping to conclusions on the basis of such study.
Marketing activity is something that is never stable and is constantly changing with
the changing circumstances, ever changing rules and regulations that control these
activities. Hence something which is very up-to-date as of now might become obsolete
in a very short span of time. One has to be very cautious before taking any decision
based on such data and has to think beyond what is given. No amount of data can be
accurate enough to give the desired results.

SUGGESTION
1. Advertisements on rural media like radio, press media has been increased .
2. Physical Distribution channel must be made strong.
3. Awareness about the product must be increased among the peoples.
4. Profit –margin percentage of the product for the retailers should be increased.
5. The rural customers are usually daily wage earners and they don’t have monthly
incomes like the ones in the urban areas have. So the packaging is in smaller
units and lesser-priced packs that they can afford given their kind of income
streams.
Then thing like the colour that attracts him is also important.

What Makes Rural Markets Attractive?
Rural market has following attributes and the following facts substantiate this: -
742 million people
Estimated annual size of the rural market -
FMCG Rs. 65,000 Crore
Durables Rs.5,000 Crore
Agri-Inputs (including tractors) Rs. 45,000 Crore
2 / 4 Wheelers Rs. 8,000 Crore
In 2001-02, LIC sold 55% of its policies in rural India.
Of two million BSNL mobile connections, 50% are in small towns / villages.
Of the 6.0 lakh villages, 5.22 lakh have a Village Public Telephone (VPT).
41 million Kisan Credit Cards have been issued (against 22 million credit-plus-debit
cards in urban), with cumulative credit of Rs. 977 billion resulting in tremendous
liquidity.
Of the 20 million Rediffmail sign-ups, 60% are from small towns. 50% of transactions
from these towns are on Rediff online shopping site.
42 million rural households (HHs) are availing banking services in comparison to 27
million urban HHs.
Investment in formal savings instruments is 6.6 million HHs in rural and 6.7 million HHs
in urban.
Opportunities:-
1. Infrastructure is improving rapidly -
In 50 years only, 40% villages have been connected by road, in next 10 years another
30% would be connected.
More than 90% villages are electrified, though only 44% rural homes have electric
connections.
Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is
connected by STD.

Social indicators have improved a lot between 1981 and 2001 -
Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved
(41% to 23%).
Percentage of BPL families declined from 46% to 27%.
Rural literacy level improved from 36% to 59%.
Low penetration rates in rural areas, so there are many marketing opportunities -
Durables Urban Rural Total (% of Rural HH)
CTV 30.4 4.8 12.1
Refrigerator 33.5 3.5 12.0
FMCGs Urban Rural Total (% of Rural HH)
Shampoo 66.3 35.2 44.2
Toothpaste 82.2 44.9 55.6
Marketers can make effective use of the large available infrastructure -
Post Offices 1,38,000
Haats (periodic markets) 42,000
Melas (exhibitions) 25,000
Mandis (agri markets) 7,000
Public Distribution Shops 3,80,000
Bank Branches 32,000
Proliferation of large format Rural Retail Stores, which have been successful also -
• DSCL Haryali Stores
• M & M Shubh Labh Stores
• TATA / Rallis Kisan Kendras
• Escorts Rural Stores
• Warnabazaar, Maharashtra (Annual Sale Rs. 40 crore).
Rural Consumer Insights
• Rural India buys -
Products more often (mostly weekly).
Buys small packs, low unit price more important than economy.
In rural India, brands rarely fight with each other; they just have to be present at the
right place.
Many brands are building strong rural base without much advertising support.

Chik shampoo, second largest shampoo brand.
Ghadi detergent, third largest brand.
• Fewer brand choices in rural areas; number of FMCG brand in rural is
half that of urban.
• Buy value for money, not cheap products .
Why Different Strategies?
Rural markets, as part of any economy, have untapped potential. There are several
difficulties confronting the effort to fully explore rural markets. The concept of
rural markets in India is still in evolving shape, and the sector poses a variety of
challenges. Distribution costs and non-availability of retail outlets are major
problems faced by the marketers. The success of a brand in the Indian rural market
is as unpredictable as rain. Many brands, which should have been successful, have
failed miserably. This is because most firms try to extend marketing plans that they
use in urban areas to the rural markets. The unique consumption patterns, tastes,
and needs of the rural consumers should be analyzed at the product planning stage
so that they match the needs of the rural people.
Therefore, marketers need to understand the social dynamics and attitude
variations within each village though nationally it follows a consistent pattern. The
main problems in rural marketing are: -
Understanding the Rural Consumer
Poor Infrastructure
Physical Distribution
Channel Management
Promotion and Marketing Communication
Dynamics of rural markets differ from other market types, and similarly, rural
marketing strategies are also significantly different from the marketing strategies
aimed at an urban or industrial consumer.

Strategies to be Followed:-
Marketing Strategy
Marketers need to understand the psyche of the rural consumers and then act
accordingly. Rural marketing involves more intensive personal selling efforts
compared to urban marketing. Firms should refrain from designing goods for the
urban markets and subsequently pushing them in the rural areas. To effectively tap
the rural market, a brand must associate it with the same things the rural folks do.
This can be done by utilizing the various rural folk media to reach them in their
own language and in large numbers so that the brand can be associated with the
myriad rituals, celebrations, festivals, "melas", and other activities where they
assemble.
Distribution Strategy
One of the ways could be using company delivery van which can serve two
purposes - it can take the products to the customers in every nook and corner of the
market, and it also enables the firm to establish direct contact with them, and
thereby facilitate sales promotion.
However, only the bigwigs can adopt this channel. The companies with relatively
fewer resources can go in for syndicated distribution where a tie-up between non-
competitive marketers can be established to facilitate distribution. Annual "melas"
organized are quite popular and provide a very good platform for distribution
because people visit them to make several purchases.
According to the Indian Market Research Bureau, around 8000 such melas are held
in rural India every year. Rural markets have the practice of fixing specific days in
a week as Market Days (often called "Haats') when exchange of goods and services
are carried out. This is another potential low cost distribution channel available to
the marketers. Also, every region consisting of several villages is generally served
by one satellite town (termed as "Mandis" or Agri-markets) where people prefer to
go to buy their durable commodities. If marketing managers use these feeder
towns, they will easily be able to cover a large section of the rural population.

Promotional Strategy:-
Firms must be very careful in choosing the vehicle to be used for communication.
Only 16% of the rural population has access to a vernacular newspaper. So, the
audio visuals must be planned to convey a right message to the rural folk. The rich,
traditional media forms like folk dances, puppet shows, etc., with which the rural
consumers are familiar and comfortable, can be used for high impact product
campaigns.
CONCLUSION
Thus, looking at the challenges and the opportunities, which rural markets offer to the
marketers, it can be said that the future is very promising for those who can understand

the dynamics of rural markets and exploit them to their best advantage. A radical
change in attitudes of marketers towards the vibrant and burgeoning rural markets is
called for, so they can successfully impress on the 230 million rural consumers spread
over approximately six hundred thousand villages in rural India .
The growing opportunity in the rural market is no doubt the prime factor. The rural
demand has been growing rapidly and its composition has been changing for the better
in the recent years. The increased income/ purchasing power of the rural consumer and
the improved income distribution has enhanced rural demand for several products.
Better access to many modern products/brands has added to this growth.
The heat of competition in the urban market actually serves as the stronger driver
behind the growing interest of cooperates in the rural market. The fact that the rural
market is still largely an untapped as well as the early entrants can tap it without
having to face intense competition as in the case of the urban market, makes the rural
market all the more attractive to them.
Corporate have been finding the going increasingly tough in the urban market ,
especially for the products in respect of which penetration levels are already high .
BIBLOGRAPHY

Study books:
• David H Maister, "Marketing Professional Services”,”Forward-Thinking
Strategies for Boosting Your Business, Your Image, and Your Profits," 2nd
Edition. Sep 2002. Edition. 13, Is. 3; p. 57.delhi.
• Ali Abdulla, “The Marketing of Nations”, “A Strategic Approach to Building
National Wealth”, Aug 1997, Edition 122, pg. 104, Delhi.
• T P Gopalaswamy, “Rural marketing environment, problems and
strategies” third edition published by Vikash publishing house pvt. Ltd. Noida.
• Nargundkar, “Market research” second edition Tata Mc Graw Hill.
• Bucklin and Lattin, “A Study of the demographic and psychographic
factors”: Journal of Marketing Vol.65, (January 2007).