WELCOME To ALL

Presented by : Satish N Nande ID No : ABM-08134 Master of Agribusiness

Management Department of Economic

Course Seminar on : Rural Marketing: Opportunities, Challenges

& Strategies

Contents

Rural marketing Evolution of rural marketing What makes rural marketing attractive Opportunities of Indian rural marketing Myths about Rural Marketing Challenges and Strategies for Rural

Marketing Case Study ITC e- Choupal Conclusion

Rural Marketing

On account of green revolution, the rural area are consuming a large quantity of industrial and urban manufactured products. Thus a special marketing strategy emerged known as Rural Marketing.

Rural marketing involve delivering manufactured or processed inputs or services to rural producers or consumers.

What Makes Rural Markets Attractive ?

Untapped rural potential

- 6,27,000 villages across the country

- account for 70% of population

- 60% of national demand for various product categories

41 million kisan Credit Card have been issued

Of the 20 million Rediffmail sign up, 60% are from small towns. 50% of transaction from these town .

42 million rural household are avaling banking services in comparison to 27 million HHs in urban HHs.

Investment in formal saving instruments is 6.6 million HHs and 6.7 million HHs in urban.

Opportunities....

1) 60 per cent of the Indian population lives in

villages2) In the period between 2003-04 and 2008-09, the

Indian Government increased Agriculture Budget allocation by a significant 300 per cent.

3) The Rashtriya Krishi Vikas Yojana was launched in 2007-08 with an outlay of Rs.25 thousand crore

4) increase the flow of credit to agriculture gone up from Rs.87 thousand crore in 2003-04 to about Rs.2.5 lakh crore in 2007-08

Improvement in infrastructure

- In 50 years , 40% villages have been connected by road, in next 10 year another 30% would be connected

-More than 90%villages are electrified ,through only rural homes have electric connection

-Rural telephone density has gone up by 300% in the last 10 years

Improvement in social indicators between 1981 to 2001

-No. of “pucca” house doubled from 22% to 41%

-No. of “Kuccha” house halved from 41% to 27%

-Percentage of BPL families declined from 46% to 27%

-Rural literacy level improved from 36% to 59% in past two decades

Low Penetration rate

Low penetration rates in rural areas , so there are many marketing opportunities

Durable

Urban Rural

CTV 30.4

Refrigerater 33.5

FMCGs Urban Rural

Shampoo 66.3 35.4

Toothpaste 82.2 55.6

Myhs about rural market

1) Rural market is a homogeneous

2) Disposable income is low

3) Individuals decide about purchases

Myh 1: rural market is a homogeneous mass

REALITY

Heterogeneous population Various tiers depending on the income State wise variation in rural

demographics Literacy % in ( Kerala 90%, Bihar 44%) Population below poverty line (Orissa

48%, Punjab 6%)

Myth 2: disposable income is low

REALITY Number of middle class ( annuals income Rs

45000-2,15,000) Rural 27.4 million Urban 29.5 million

Per Capita annual income Rural Rs 9481 Urban Rs 19,407 Total Rs 12,128

Myth 3: Individuals Decide About Purchases

Reality:

Decision making process is collective

Purchase process - can all be different

Challenges….

· Understanding the Rural Consumer

· Poor Infrastructure · Physical Distribution

· Channel Management

· Promotion and Marketing Communication

1) Availability (Place)

2) Affordability (Price)

3) Acceptability (Product)

4) Awareness (Awareness)

4 A’ s approach of Indian rural market

1) Availabiliy

Challenges Regularly reach product to

the far-flung villages. Indias 627,000 villages are

spread over 3.2 millions sq Km ; 700 million indians may live rural areas

Strategies Strive to reach at least

13,113 villages with a population market penetration

Can reach the market bye the following ways:

At Chaupals , Retail Outlet

Mandi ,Travel

Conts…..

Hindustan lever, to serve remote village ,use auto rickshaws ,bullock-carts and even boats in the backwaters of Kerala.

Coca-Cola, has evolved a hub and spoken distribution Mosel to reach the village .to ensure full loads ,the company depot supplies ,twice a week, large distributors which who act as hub . These distributors appoint and supply ,once a week, smaller distributors in adjoining areas.

AFFORDABILITY

Challenges :

To provide at cheaper price

Strategies :

Introduce small unit packs.

acceptability

Challenge: To gain acceptability for the product or service

Strategies: Offer product or services that suit the rural

market Easy to understand Coca-Cola company because of the lack of

electricity and refrigerator in the rural area ,it provide low –cost ice boxes ,a tin box for new outlets and thermocol box for seasonal outlets.

Awareness

Challenges : less exposure to the world , low literacy rate

Strategies : Opinion leaders play a key role in

popularizing product and influence in rural market so choose the appropriate opinion.

Can use the following promotional methods:

Personal interface

One on One contact programs are extremely efficient manner to reach the rural consumer.

Provide an opportunity to

Demonstrate Induce Trial Educate

Event : Melas

An opportunity to present brand stories using better display tools

Large screens Animations Melas can be used

for Retail sale points Sampling exercise Demonstration

Haats : presence in the market

42000 rural haats

Average 4500 +visitors per haats

Sales per day US $ 5000

300 + sales outlet per haats

Strategies to be Followed

1) Marketing Strategy

2) Distribution Strategy

3) Promotional Strategy

Marketing Strategy

1) Marketers need to understand the psyche of the rural consumers .

2) intensive personal selling efforts 3) Firms should refrain from designing

goods for the urban markets and subsequently pushing them in the rural areas

4) by utilizing the various rural folk media to reach them in their own language

Distribution Strategy

1) using company delivery van which can serve two purposes

2) Annual "melas3) fixing specific days in a week as Market

Days (often called "Haats') 4) "Mandis" or Agri-markets

Promotional Strategy

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.

Example……..

· ITC is setting up e-Choupals, which offers the farmers all the information, products and services they need to enhance farm productivity, improve farm-gate price realization and cut transaction costs. Farmers can access latest local and global information on weather, scientific farming practices as well as market prices at the village itself through this web portal - all in Hindi. It also facilitates supply of high quality farm inputs as well as purchase of commodities at their doorstep.

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.

References

1. Rural Marketing, Ravindranath V. Badi and Naranyansa V. Badi, Himalaya Publishing, 2004

2. The Hindu - Business Line 3. www.deccanherald.com 4. www.indiantelevision.com

THANK YOU