TOPIC : RURAL MARKETING AND
PRICING POLICY
S U B M I T T T O
R A G H U S I R
M A N A S A G A N G O T H R I
U N I V E R S I T Y , M Y S O R E
SUBMITT BY
NAGESHA K
B SECTION
MANASA GANGOTHRI
UNIVERSITY ,MYSORE
MARKETING MANAGEMENT

CONTENTS
 Introduction of Rural marketing
 Meaning and defination
 Nature of Rural marketing
 STRATEGOES
 Emerging Areas in Rural Marketing
 Some noteworthy success stories
 Pricing policy
 Pricing strategies
 Conclusion .

Rural Marketing

Introduction
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 revalation in
India after 1990

Meaning and Defination
Rural Marketing is a process of developing ,pricing,
promoting ,distributing rural specific goods and services
leading to exchange between urban and rural markets,
which satisfies consumer demand and also achieves
organisational objectives
According to Thomsen – “ The study of rural marketing
comprises of all the operations and the agencies
conducting them involved in the movement of farm
produced food raw materials and their derivatives such as
textiles from the farms to the final consumers and the
effects of such operations on producers middlemen and
consumers.

What are Rural Areas ?
 In general ,a Rural Area is a geographic area that is
located outside towns and cities .
 As per Census : Any habitation with a population
density of less than 400 per sq.km, is known as
Rural .
Nature of Rural Market
 Traditional Outlook .
 Rising literacy level.
 Diverse socio- economic background .
 Infrastructural facilities .

It is a two –way Marketing process wherein
 Urban to Rural – Major part of rural marketing. Includes
transactions of urban marketers who sell their goods and
services in rural areas pesticides, fertilizers, FMCG
products, tractors,bicycles ,consumer,etc.
 Rural to Urban – Basically falls under agricultural
marketing .A rural producer seeks to sell his produce in
urban market like seeds ,fruits and vegetables, forest
produce, spices, milk and related products, etc.
 Rural to Rural – Includes the activities that take place
between two villages in close proximity to each other like
agricultural tools , handicrafts , dress materials, bullock
carts,etc.

Rural consumers
 Classification –
The Rural consumers are classified into the following groups based on
their economic status :
The Middle Class
 One of the largest segment for
manufactured goods.
 It is fast expanding.
 Farmer 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 the benefits of
many such schemes and may move towards the middle class .
 The farmers of Bihar and Orissa fall under this category.

STRATEGOES

Affordability
 Challenge is to ensure
affordability of the product or
service.
 Rural people have low disposable
income.
 Product needs to be affordable to
consumer who are daily wagers.
 E.g- Coca- cola introduced 200
ml bottle at Rs-5/-

Availability
 Greatest problem is to reach to customer or retailer
 Challenge to reach far flung villages.
 Products reaches the customers late.
 Reaching the market should be considered.
Awareness
 The main way of reaching the customer is through the
commercial on media like television, radio and outdoor.
 Lack of media source in rural areas.
 Coca-cola uses a combination of TV, Cinema and radio to
reach 53.6 percent of rural households.
 It doubled its spend on advertising on Doordarshan, which
alone reached 41% of rural households.

Awareness

Acceptability
 The customer should feel that the
product is designed as per their
needs
 The customer should feel the
product familiar and there should
not be any hesitation to go for it.
 E.g- LG Electronics .In 1998 , it
developed a customized TV for the
rural market and named it
Sampooma, which was a great
success due to sale of 100000 sets
in the very first year.

Emerging Areas in Rural Marketing
 Agri-Business Management
NGO Management
Natural resource Management
Rural Infrastructure Management
Micro- Finance
Corporate Social Responsibility

Some noteworthy success stories
 “yaara da tasham” 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 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.

 HUL with its project
shakti has already has a
reach of 1.7 lakh village
and aspires to reach 5
lakh village by 2020.
 In 2001-02 LIC sold
55% of its policies in
rural India

Pricing policy
 Price meaning :-
It is sum of all the values that
consumer exchange for the benefits of having or
using the product or service .
rent, fees, fares, assessments , retainers, salaries,
wages , commissions and taxes .
Pricing policy meaning :-
The policy of a company or business that guides
the price setting of its goods and services that are
offered for sale.

SELECTING THE PRICE OBJECTIVE
 Survival
 Maximum current profit
 Maximum current Revenue
 Maximum sales Growth
 Maximum Market Skimming
 Product Quality Leadership

Pricing strategies
Company face many problems in setting their prices .
 Standard pricing methods such as uniform pricing
standard mark up of costs everywhere or charging what
the market will bear ignores cost differentials and local
market conditions.
 premium pricing – uses a high price, but gives a good
product /service exchange e .g . Honda , The Ritz Hotel.
Penetration pricing – offers low price to gain market
share then increase price
e.g Vodafone to Attract new corporate clients
 Economy pricing – placed at “No Frills” low price
e.g Soups, Spaghetti,perk – economy brands.

 Price skimming – where prices are high –usually during
introduction .
e.g new albums or films on release .
Ultimately prices will reduce to the ‘parity’
 Psychological pricing – to get a customer to respond on
an emotional,rather than rational basis .
 product line pricing – rationale of a product range
,detergents.
 Pricing variations – off-peak pricing early booking
discounts etc .
e.g Maruthi offers cash back incentive for wagon r.

Optional product pricing – e.g optional extras
– BMW famously under equipped .
Captive product pricing – products that
complement others
Product bundle pricing- sellers combines
serveral products at the same price.
Promotional pricing – e.g toothpaste ,books etc
.