RURAL MARKETING Subhajit Sanyal

PROFILE OF RURAL MARKET RURAL CONSUMER MARKETING RESEARCH RURAL MARKET RESEARCH RURAL SEGMENTATION –TARGETING & POSITIONING RURAL MARKETING STRATEGY RURAL PRODUCT RURAL PRICE RURAL DISTRIBUTION RURAL SALES FORCE MANAGEMENT RURAL COMMUNICATION TOPICS

What is Rural Government agencies like I RDA (Insurance Regulatory And Development Agency and NCAER ( National Council for applied Economic Research) define Rural as villages with a population <5000 with 75% male population engaged In agriculture etc” Concept of Rural from the perspective of marketing has Indeed been dynamic.- gradually changed over the times Was not India a so called Village/Rural for the world a couple of decades back Census Towns are actually rural areas but satisfy The following criteria Minimum Population>=5000 75% of the mail population engaged in Non –agri activity RB1 Location with population up to 10000 Considered Rural Semi Urban 10000 to 100000 NABARD All locations upto a population of 10000 Will be considered Rural Sahara All locations having shops/establishments’ Upto 10000 (not population related) are Treated as Rural LG Elect. The rural and semi urban area is defined As all cities other than major metros NABARD National Bank for Agriculture & Rural Dev

What is Rural Marketing Developing of the market in the area as defined as Rural Hence it could be aptly said that it encompasses the Activities such as developing the process to meet this Objective – Right product at the right price to the right people at the right time. Exchange between rural and Urban is a Factor . Could be Urban to Rural: Rural to Urban, Rural to Rural

Move to Rural Market …encouraging Data Rural India buys Soft Drinks approx 45% of all soft drinks Almost 50% motor cycles Approx 55% of cigarettes Half the total market for TV, Fans, pressure cooker, bicycles Washing soap, tea, blades, salt, toothpowder Coca Cola is growing over 35% in Rural areas compared to Over 22 % in Urban According to Hasna Research , a market research farm that Has published a Guide to Indian Markets 2006 Consumer durables in Indian Villages risen sharply TV Sales up by 200% Motorcycle by 77% There are 3000 households in rural area that earn > 50 lakhs

Profile of the Rural Consumer

Simple Model of Rural Consumer Behaviour Need Recognition Pre Purchase Search Evaluation of Alternatives Purchase Decision Post purchase behaviour

Key Challenges 4A Awareness Affordability Availability Acceptability 4 Ps 4 As Promotion Awareness Price Affordable Product Acceptable Available Place

RURAL MARKET RESEARCH

Marketing Research is a formalized means of obtaining Information to be used in making marketing decisions Market research Issue Information Required to address Design Method of Collecting Information Manage The data collection process Analyze The results Communicate Finding and implication

Tool Kits Used for Rural Market Research

Tool Kits Used for Rural Market Research Faces Color Wheel Same Color – Different shades Different Color Happy ………Sad Number of Coins Ladder Playing Cards

POINTS TO REMEMBER FOR RURAL MARKETING RESEARCH

RURAL MARKET SEGMENTATION TARGETING & POSITIONING

SEGMENTATION Very Varied –hence proper segmentation very essential Geographic : Region North, East, West and South Village size Climate Demographic Age Family Size Gender Income Occupation Education Caste Psychographics (consists of psychological: sociology: anthropological) Lifestyle Rigid ,changing attitude, urban influence Personality Authoritarian, Ambitious Behavioral Occasions Regular, special occasion Benefits User status regular user, first time user, non user Usage rate Light, medium, heavy Loyalty None, medium, strong Attitude to ) positive, negative, hostile Product ) Different variables could be used.. multilevel segmentation

transistor/radio wristwatch,pressure cooker,cassette recorder Households owning any/all of the foll 20.20% 61.40% Households other than those classified above The Destitutes/Poor (not those mentioned in above 3 categories) bicycle,electric fans, electric iron with other durab 44.60% 26.00% Households owning any/all of the foll The Aspirants (not those mentioned in above 2 categories) audio equip, B/W TV,geyser with other durables VCR/VCP,mixer grinder sewing m/c 22.40% 8.30% Households owning any/all of the foll The Climbers color TV with other durable (No car/jeep) A.C/Motorcycle/scooter/washing m/c 5.80% 2.70% Household owning any/all of the foll. The Well Off personal cars/jeep with other products 5.60% 1.60% Households owning The Affluent/Very Rich 2006=2007 1995-96 Rural Consumer Classification Class Source - NCAER

RURAL MARKETING STRATEGY

ENTERINING THE RURAL MARKET New Entrant Company starts Rural Market first & then ventures in Urban Market (eg Cavin Kare Chik & Meera Shampoo) Mid- Entrant Company starts Rural Market after success in Urban Market (eg HLL, LG) Late - Entrant Company starts Rural Market after success in Urban Market for long (eg Cadbury) R G A Retain Grow Add Purpose the market

RURAL MARKETING STRATEGY P L A N N I N G E X E C U T I O N F E E D B A C K Profile the Rural Market Profile the Consumer Market Behaviour & MR Segmentation Targeting Positioning --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- Rural Product Rural Pricing Rural Distribution Rural Sales Force Management Rural Communication Monitor the Rural Strategy Feedback & Control 1 2 3

DEVELOPMENTAL MARKETING Developmental marketing is a process through which awareness is created >could be demonstration >could be presentation >Free samples >could be through up eg tie up with Bank tie up with Petrol/Diesel pumps (Hyundai did with IOC and PNB and SBI subsidiaries >30% sale of Hyundai from Rural/Semi Urban areas) Awareness Trial Purchase Post-Purchase Satisfaction Colgate – program Operation Jagruti Switch from Charcoal to Colgate tooth powder HLL - Free samples of Lifebuoy Cavin Kare – Free sample of Chik Champoo Marico Industries – Parachute coconut oil “ Sudhata ki pehchan” –smell to differentiate between real and spurious

RURAL PRODUCT RURAL PRICE RURAL DISTRIBUTION RURAL SALES FORCE MANAGEMENT RURAL COMMUNICATION

Rural Product Product to be marketed with the requirements of the Rural Consumer should not be an extension of urban offerings ( Philips launched Free Power Radio – does not require Battery/electricity you wind it with a lever and radio runs For approximately 30 min. Classification Of Rural Products FMCG (HLL, Dabur, Marico, Colgate=Palmolive Coke, Pepsi) Consumer Durables TV ,Fridge, Fan, Presssure Cooker, Cycle, Two wheelers, Sewing machines, watch, mixer grinder, radio, music system, Fans, Washing machines (Philips, LG, Videocon, Onida ) Services Telecom, Banking, Health care ,Insurance (Airtel, BSNL, SBI, PNB,Dena bank,) Agri-inputs Seeds, pesticides, tractors (Rallis India, Bayer,) Product Life Cycle (PLC) Launch Take Off Maturity Decline

RURAL DISTRIBUTION Physical Distribution Channel of Distribution Transportation Warehousing Communication PHYSICAL DISTRIBUTION Transportation Railways, Roads ,Waterways, Animals Communication ITC using internet, Mobile users by fisherman Warehousing (Three Tier Rural Warehousing Set Up) Central/State Warehousing Cooperatives Rural Godowns

PLANNING FOR SALES FORCE MANAGEMENT SET THE PERSONAL SELLING OBJECTIVES FORMULATE THE SALES POLICIES STRUCTURE THE SALES FORCE SIZE OF THE SALES FORCE ASSIGNING SALES TARGETS CREATING SALES FORCE- SELECT, RECRUIT, TRAIN SALES FORCE COMPENSATION, MOTIVATION, SUPERVISION SALES COMMUNICATION & REPORTING SALES COORDINATION/SALES CONTROL

Cont’d Source: The Rural Marketing Book- Text & Practice, Kashyap. P and Raut. S ( 2007) Population characteristics unknown Commercial establishments located in areas servicing less than 1000 population Sahara Village & town characteristics not defined All locations with a population upto 10, 000 considered “ rural” NABARD Only clarifies what are the cities All places other than the 7 metros LG Electronics

Defining Rural Marketing Function that manages all activities involved in assessing, stimulating and converting the purchasing power of rural consumers into effective demand for specific products and services to create satisfaction & a better standard of living for achieving organisational goals. Marketing products produced in rural areas to urban areas Marketing products produced in rural areas in rural markets Decisions to produce saleable farm commodities involving all the aspects of the market system or structure, both functional and institutional, based on technical & economic considerations and includes the pre & post harvest operations. Corporate Rural Marketing Definition NGOs National Commission on Agriculture

Domain of Rural Marketing To Rural Urban From Rural Urban Source: M. Jha, Rural Marketing- Some Conceptual Issues, EPW, 1988

Scope of Rural Marketing Urban to Rural Rural to Urban Rural to Rural Outcomes Norms Modalities Products/ services Participants Dimensions of the transaction Domain of Rural Marketing

Rural Employment Patterns( Male) Source: NSSO data, Mckinsey Global Institute Study, 2004-05 8 7 Manufacturing 7 4 Construction 7 5 Trade & Hotels 8 2 Transport & Communication 67 75 Agriculture Sector Year -2004 ( % share in employment) Year – 1987 ( % share in employment)

Rural India – Population Trends Source: Census 2001 15.2 16.7 19.8 Decadal Variation 72.2 74.3 76.7 As a proportion of total population 741.6 628.8 524.0 Rural Population (in million) 1026.9 848.3 683.3 548.2 Total Population (in million) 2001 1991 1981 1971

Rural Income Trends Source: National Council for Applied Economic Research, 2000 3.0 0.5 High > 1,40,000 3.9 1.2 Upper Middle 1,05,001- 1,40,000 10.4 7.1 Middle 70,001 – 1,05,000 34.8 23.9 Low Middle 35,001- 70,000 47.9 67.3 Low <= 35,000 1998-99 ( % Households) 1989-90( % Households) Income Class Annual Income ( at 1998-99 prices)

ICT in Rural Markets EID Parry Universities Agri extension Ozhwar Sandhiyes E- Choupal Agmarknet Agri Marketing Sewa Bhoomi( Karnataka) Rural Services Simputer N- Logue NIC Infrastructure Provision NGO/ PPP Private Government Category

Introduction to Rural Marketing “The first five years of the new millennium will belong neither to the urban markets which have reached saturation and where margins are under pressure not to the export markets, which suffer from inadequate infrastructure back home, and uncompetitive prices overseas. It will belong to rural marketing.”

RURAL MARKETING In the India context, the word ‘RURAL’ is so much associated with agriculture and farmers that rural marketing tends to be seen as a marketing of inputs or outputs related to agriculture.

Rural v Urban OCCUPATION: Rural:Cultivators n few non –agricultural pursuits. Urban:manufacturing,trade,commerce,professions

&quot;Yaara da Tashan...” ads with Aamir Khan created universal appeal for Coca Cola

Satellite dish antennas reach rural India

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.

Typical shop in rural India stocked with sachets, etc

Segmentation, Targeting & Positioning in Rural Markets

The STP Process Source: The Rural Marketing Book- Khasyap. P & Raut. S Marketing Decision Marketing Actions to be Undertaken Segmenting Identifying and developing profiles of market segments Target Evaluating segments and deciding the market coverage strategy Positioning Identifying , selecting and communicating competitive advantages

Segmentation of Rural Market

Levels of Market Segmentation Mass Marketing or Undifferentiated Marketing e.g. Ruf & Tuf Jeans, Segment Marketing - Cars Niche Marketing – specialize to a narrowly defined customer group – Temple jewellery for South Indian women wanting to take part in cultural programmes Local Marketing – Market around sector 44 Individual Marketing One to One Marketing Mass customization – ability to prepare on a mass basis individually designed products

Behavioral Segmentation - based on buyer’s knowledge of, attitude towards, use of, or response to a product Occasions – Marriage, Birth – Archies and Hallmark cards Benefits – In soaps - Dettol – antiseptic, Lux – Beauty User Status – Non users, first time users, potential users, regular user Usage rate – Light users, medium users, heavy users Buyer Readiness State – Cold Prospect, Hot Prospect Loyalty status – Hard Core Loyals, Split Loyals, Shifting Loyals, Switchers Attitude – enthusiastic, positive, indifferent, negative, hostile

Conditions fro Effective Market Segmentation 1.Measurable 2.Accessible Profitable Data Availability Customer Oriented Philosophy Enables Tailoring of marketing Programme Enables Development of strong positioning of Brand

Heterogeneity in Rural India Variable Example Socio – Cultural Differences Caste Based Habitations in Villages Population Size & Density Kerala Vs Andhra Pradesh Difference in Infrastructure BIMARU states Vs Karnataka Media Exposure levels Kerala Vs Orissa Literacy Levels Himachal Pradesh Vs Bihar Income levels & patterns Farmers & Daily Wage Earners Family Structure Joint Families & Nuclear Families

Reference New Perspective in Rural & Agricultural Marketing Y Ramkishen Rural Marketing Book – Pradeep Kashap & Siddhartha Raut Cases In Rural Marketing – An Integrated Approach CGS Krishnmacharyulu & Llith Ramkrishnan

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