RURAL MARKETING STRATEGIES

•     RURAL MARKETING STRATEGIES : BRIEF NOTES

•     BY DR SHASHI AGAGRWAL

•     MARKETING MANAGEMENT

•     INTRODUCTION AND MEANING OF RURAL MARKETING

1.       RURAL INDIA IS TODAY CONSIDERED TO BE AN UNTAPPED MARKET FOR MOST FMCG AND ALSO FOR CONSUMER DURABLE GOODS, MARKETERS INCLUDING MULTINATIONALS HAVE RECOGNIZED THIS POTENTIAL AND HAVE STARTED ENTERING INTO RURAL MARKETS IN A SIGNIFICANT MANNER. NEAR SATURATION IN URBAN AREA HAS ALSO PROMPTED MARKETERS TO LOOK AT RURAL MARKETS.

2.       RURAL MARKETING IS A TWO WAY PROCESS MARKETING PROCESS. THERE IS INFLOW OF PRODUCTS INTO RURAL MARKETS FOR PRODUCTION OR CONSUMPTION AND THERE IS ALSO OUTFLOW OF PRODUCTS TO URBAN AREA.

3.       THE RURAL POPULATION AMOUNT FOR AROUND 627 MILLION WHICH IS 74.3 PERCENT OF THE POPULATION LIVING IN THE RURAL INDIA

4.       THE RURAL MARKET IN INDIAN ECONOMY GENERATE APPROXIMATELY MORE THAN 50% OF THE COUNTRY’S INCOME

•     TWO BROAD CATEGORIES :

1. THE MARKET FOR CONSUMER GOODS:
1. DURABLE
2. NON DURABLE
2. THE MARKET FOR AGRICULTURAL INPUTS THAT INCLUDE FERTILIZERS,PESTICIDES AND SEEDS ETC

RURAL MARKETING

•     NOT SIGNIFICANTLY DIFFERENT FROM URBAN MARKETING

•     MARKETING MANAGER HAS TO  PERFORM THE SAME TASK BUT TARGET MARKET IS PEOPLE LIVING IN RURAL AREA

•     FIRM HAS TO SATISFY RURAL SEGMENTS WHICH ARE NOTABLY DIFFERENT FROM URBAN SEGMENTS IN SOME ASPECT

•     BUT INCREASING LITERACY RATE, IMPROVED SOURCES OF INCOME SOURCES OF INCOME,AWARENESS DUE TO IMPROVED AND INCREASED MEANS OF COMMUNICATION AND TRANSPORTATION AND HIGH RATE OF MOBILITY MAY MAKE THEM TO BE IDENTICAL

•     RURAL MARKETING IN INDIAN ECONOMY COVERS TWO BROAD SECTIONS :

1.       MARKETING OF AGRICULTURAL PRODUCTS IN THE URBAN AREA

2.       OF MANUFACTURED PRODUCTS IN THE RURAL REGIONS

•     DEFINITION OF RURAL MARKETING

•     RURAL MARKETING IS A PROCESS OF DEVELOPING,PRICING,PROMOTING AND DISTRIBUTING SPECIFIC GOODS AND SERVICES LEADING TO DESIRED EXCHANGES WITH RURAL CUSTOMERS TO SATISFY THEIR NEEDS AND WANTS AND ALSO TO ACHIEVE ORGANIZATIONAL OBJECTIVES.

•     RURAL MARKETING IS THE MARKETING FOR THE CUSTOMERS RESIDING IN RURAL AREAS AND IT INVOLVES DESIGNING MARKETING PROGRAMME TO ARRIVE AT DESIRED EXCHANGE WITH THE RURAL CUSTOMERS THAT SATISFIES THEIR NEEDS AND WANTS.

•     FEATURES OF RURAL MARKETS

1.       LARGE ,DIVERSE AND SCATTERED MARKET :-LARGE AND SCATTERED INTO NUMBER OF REGIONS. AS URBAN MARKET CONFINED TO A HANDFUL OF METEROS,COSMOPOLITAN CITIES AND TOWNS.

2.       MAJOR INCOME OF RURAL CONSUMER IS FROM AGRICULTURE

3.       LOW STANDARD OF LIVING : RURAL POPULATION IS EMPLOYED IN SMALL SCALE AGRICULTURAL AND RELATED OCCUPATION. MAJORITY OF THE POPULATION LIVES BELOW POVERTY LINE.

4.       TRADITIONAL OUTLOOK :- MOSTLY RESIST TO CHANGE. BUT DUE TO LITERACY ESPECIALLY IN THE YOUTH IS CHANGING

5.       INFRASTRUCTURE FACILITIES :INADEQUATE INFRASTRUCTURE IS THE SINGLE MOST IMPORTANT FACTOR THAT DIFFERENTIATE URBAN AND RURAL MARKET

6.       MARKET GROWTH :- IS GROWING STEADILY OVER THE YEARS. DEMAND FOR TRADITIONAL PRODUCTS LIKE AGRICULTURAL INPUTS,FMCG,BICYCLES  GROWN OVER THE YEARS. RURAL DEVELOPMENT PROGRAMME WHICH HAVE RESULTED IN GREEN AND WHITE REVOLUTION AND INCREASED THE SOURCE OF INCOME

7.       DIVERSE SOCIO ECONOMIC BACKGROUND :- VILLAGERS BELONG TO DIFFERENT RELIGIONS, CULTURE AND SOCIAL GROUPS AND . SOCIO CULTURAL BACKGROUND INFLUENCE CONSUMER WILLING NESS TO ACCEPT INNOVATION AND NEW PRODUCTS IN DIFFERENT AREA . THE VARIATION IN BEHAVIOUR DUE TO CONSUMER ENVIRONMENT GEOGRAPHICAL,OCCUPATION,DEMOGRAPHICAL AND BEHAVIOUR INFLUENCE THE LIFESTYLE  AND DUE TO WHICH THERE ARE DIFFERENT SETS  OF NEEDS AND REQUIRE SEGMENTATION OF THE RURAL MARKET TO SATISFY THE NEEDS EFFECTIVELY AND PROFITABLY.

8.       LITERLITERACY IN RURAL AREA: LOW IN RURAL AREA SO PRINT MEDIA IS NOT VERY USEFUL AND DEPENDENCE IS MORE ON ELECTRONIC MEDIA. BUT NOW RURAL PEOPLE HAVE STARTED GOING TO URBAN AREA FOR EDUCATION. GOVT HAS ALSO INTRODUCED VARIOUS SCHEMES FOR RURAL EDUCATION

9.       PURCHASING POWER :-DEPENDENT ON SEVERAL DIRECT AND INDIRECT FACTORS RELATED TO RURAL ECONOMY . NOW DAYS AS GOVERNMENT SPENDS HUGE AMOUNT OF MONEY ON IRRIGATION, FLOODS CONTROL,INFRASTRUCTURAL  DEVELOPMENT ANTI POVERTY SCHEMES ETC.

•     PROCESS OF RURAL MARKETING

1.       URBAN TO RURAL : FMCG GOODS,AGRICULTURAL FERTILIZER,AUTOMOBILES ETC

2.       RURAL TO URBAN :-FRUITS,VEGETABLES,FLOWERS AND MILK

•     POTENTIAL OF RURAL MARKETING

1.       LARGE POPULATION

2.       INCREASED INCOME

3.       COMPETITION IN URBAN MARKET

4.       IMPROVED INFRASTRUCTURAL FACILITIES

5.       SATURATED URBAN MARKET

6.       SUPPORT OF FINANCIAL INSTITUTIONS

7.       NEW EMPLOYMENT OPPORTUNITIES

•     RURAL MARKETING STRATEGIES

•     PRODUCT :

•     PRODUCT IS  ANYTHING THAT SATISFIES  HUMAN WANTS ( CUSTOMERS AND INCLUDES PRODUCT QUALITY,FEATURES,BENEFITS,DESIGN AND STYLES ,COLOUR,BRAND,SERVICES AND WARRANTIES. IT IS THE MOST IMPORTANT ELEMENTS IN MARKETING MIX

•               STURDY PRODUCTS :HEAVIER THE ITEM,HIGHER IS THE POWER AND DURABILITY. LIKE BULLET MOTOR CYCLE

•               DESIGNING PRODUCTS : SUITING AS PER RURAL NEEDS. LIKE LG ELECTRONIC LAUNCHED A UNIQUE PRODUCT FOR RURAL MARKET . SAMPOORNA INDIA’S FIRST TV WITH DEVANAGARI SCRIPT ON SCREEN DISPLAY AND AFFORDABLE AND CAN ALSO WITHSTAND POWER FLUCTUTATIONS AND REFRIGERATOR CHOTUKOOL FOR RURAL AREAS BY GODREJ  AND CHOTA COKE IN 200 ML

•     SMALL UNIT PACKING HAS BEEN USED FOR MANY CONSUMER PRODUCSTS

1.       SHAMMPOOS IN SACHET

2.       TIGER BRANDS OF BISCUIT AVAIL ABE OF RUPEES ONE

3.       RASNA IS AVAILABLE AT SACHET OF RS ONE

RURAL PEOPLE ARE CONCERNED WITH UTILITY OF THE ITEMS RATHER THAN LOOK. PHILIPS HAS INTRODUCED FREE POWER RADIO PRICES AT 995 FOR THE FIRST TIME IN INDIA,

BRANDING IS DONE IN THIS WAY TO ATTRACT RURAL CUSTOMERS. LIKE BILLI WALI CELL ( EVERDAY BATTERIS WITH CAT AS SYMBOL)

•     PRICING

•     PRICE REFERS TO EXCHANGE VALUE OF THE PRODUCT AND INCLUDE

1.       MAXIMUM RETAIL PRICE

2.       DISCOUNT

3.       CREDIT

4.       TERMS

5.       TERMS OF DELIVERY

6.       MAINTENANCE CHARGES

RURAL RETAILERS REQUIRES CREDIT AND PRODUCT PRICING HAS TO BE ADJUSTED TO MEET THEIR REQUIREMENTS

•     PRICING STRATEGIES

•     LOW PRICE :RURAL CONSUMER IS PRICE SENSITIVE DUE TO LOW LEVEL OF INCOME. PRICING OF THE PRODUCT AT LOW WILL ATTRACT RURAL CUSTOMERS.BHARAT PETROLEUM HAS INTRODUCED FIVE KGS GAS CYLINDERS TO REDUCE INITIAL DEPOSIT AND REFILL COST FOR RURAL CONSUMERS. SMALL UNITS PACKS OF SHAMPOO,HAIR ,OIL,TOOTHPASTE AND,BISCUITS AND BATHING SOAPS

•     NO FRILLS PRODUCTS :-WORK ON STURDY AND UTILITY. LIKE MAHARAJ APPLIANCES LTD SELLS A STURDY MACHINE AT 2990 AND THEY OPERATE ON A PRICE VALUE PROPOSITION.

•     REFILL AND REUSABLE PACKAGING :- ADD VALUE TO PRODUCT. LIKE BOURNVITA AVAILABLE IN REFILL PACK

•     CREDIT FACILITIES :- MANY COMPANIES EXTEND CREDIT TO THE VILLAGE RETIALERS TO PERSUADE THEM TO STOCK THE COMPANY’S PRODUCTS AND PUSH IN THE MARKET

•     DISCOUNT :-OFFERED TO MOTIVATE THE RETAILERS TO SELL MORE OF THE COMPANY’S PRODUCTS

•     PROMOTIONAL SCHEMES :-PURCHASING IS DONE AFTER HARVESTING OF CROPS. SIMILARLY PONGAL,ONAM,LOHRI,DUSSSERHA,DIWALI,ID ARE THE FESTIVALS FOR BUYING  HOUSEHOLD ARTICLES. SPECIAL PROMOTION SCHEME LIKE SPECIAL DISCOUNT SCHEMES OR EXCHANGE OFFER

•     PLACE ( DISTRIBUTION STRATEGY)

•     PLACE REFERS TO DISTRIBUTION OF PRODUCTS AND INCLUDES DISTRIBUTION CHANNEL,AREA COVERAGE,CHANNEL REMUNERATION,WAREHOUSING,INVENTORIES,BANKING AND TRANSPORTATION

•     MAJOR PROBLEMS :-

1.       REQUIRES A LARGE NUMBER OF DISTRIBUTION INTERMEDIARIES AND INCREASES THE COST OF DISTRIBUTION

2.       NON AVAILABILITY OF DEALERS

3.       POOR VIABILITY OF RURAL OUTLET

4.       INADEQUATE TRANSPORT AND COMMUNICATION FACILITIES

•     PLACE ( DISTRIBUTION STRATEGY)

MANY COMPANIES ARE MAKING USE OF INNOVATIVE AS WELL AS TRADITIONAL CHANNELS TO REACH RURAL MASSES

•               SATELLITE DISTRIBUTION :- APPOINTMENT OF STOCKISTS IN IMPORTANT TOWNS. THEY SUPPLY THE GOODS IN SMALL LOTS TO THE RETAILERS AND MERCHANTS AND THEY ARE GIVEN CREDIT OF 15 TO 30 DAYS.

•               THE HUB AND SPOKE METHOD :-COCA COLA HAS DEVELOPED HUB AND SPOKES METHOD OF DISTRIBUTION. MAIN DISTRIBUTORS APPOINTED IN IMPORTANT MARKETS AND SUB DISTRIBUTORS ARE APPOINTED TO HANDLE SMALLER MARKETS WITH IN THE TERRITORY

•     SYNDICATE DISTRIBUTION :-SELLING NON COMPETITIVE GOODS CAN JOIN TOGETHER AND DISTRIBUTE PRODUCTS THROUGH A COMMON DISTRIBUTION CHANNEL. LIKE PROCTER AND GAMBLE HAS MADE USE OF THE DISTRIBUTION CHANNEL OF MARICO FOR SELLING THE PRODUCT

•     PROJECT SHAKTI :-HLL HAS COME OUT WITH THIS DISTRIBUTION MODEL WITH TO DEVELOP INCOME CREATING CAPABILITIES OF UNDERPRIVILEGED RURAL WOMEN BY PROVIDING A SUSTAINABLE ENTERPRISE OPPORTUNITY AND TO IMPROVE RURAL LIVING  STANDARDS THROUGH HEALTH AND HYGIENE AWARENESS. A WOMEN FROM THE SELF HELP GROUP IS SELECTED SHAKTI ENTREPRENEUR AND RECEIVES STOCKS AND SHE SELLS DIRECTLY TO CONSUMERS AND SMALL MERCHANTS

•     BY PARTICIPATING IN HAATS AND MEALS THE COMPANY NOT ONLY PROMOTE AND SELL THE PRODUCTS AND BUT ALSO UNDERSTAND THE NEEDS OF RURAL PEOPLE

•     MOBILE TRADERS :-LIKE PHERIWALLAS  ABLE TO REACH RURAL HOUSEHOLD AND THEY MOVER FROM HOUSE TO HOUSE . LIKE THEY SELL BANGLES,ARTIFICIAL JEWELLERY,PERFUMES,TOOTHPOWDER ETC

•     PHYSICAL DISTRIBUTION

•     DELIVER VANS :BHARAT PETROLEUM HAS INTRODUCED RURAL MARKETING VEHICLES IN1999 IN PUNJAB AND THE VEHICLES MOVE FROM VILLAGE TO VILLAGE AND FILLS LPG CYLINDERS FROM SPOT TO RURAL CUSTOMERS. SYGENTIA AND EVERYDAY BATTERIES ALSO USED DELIVERY VANS

•     SYNDICATE VANS :-SELLING NON COMPETITIVE CONSUMER GOODS COME TOGETHER AND OPERATE DELIVERY VANS TO SERVICE THE RURAL RETAILERS

•     BULLOCK CARTS OR CAMELS :-USED FOR COVERING REMOTE VILLAGSE WITH NO MOTOR ABLE ROAD. BOATS ARE ALSO USED. VILLAGES IN CERTAIN PARTS OF KERALA.AP AND WEST BENGAL

•     RURAL RETAILING

•     CHOUPAL SAGAR PROMTED BY ITC IS THE FIRST ORGANIZED RETAIL OUTLET IN THE RURAL MARKET, THE RURAL MALL SERVES AS A SHOPPING AND INFORMATION CENTRE. SELLS EVERY THING AND BANKING,ATM,RESTAURANT ,POST OFFICE AND FUEL PUMP,HEALTH CARE  CENTRES ARE THE FACILITIES OFFERED BY THE CHOUPAL SAGAR

•     HARYALI KISAN BAZZAR  AND GODREJ AGROVERT

•     PROMOTION

1.       FORMAL MEDIA

2.       INFORMAL MEDIA/RURAL SPECIFIC MEDIA

•     FORMAL MEDIA : LOW IN RURAL AREA. PRINT 14%,TV :36%,CINEMA 16% AND RADIO 18%

•     LOCAL LANGUAGE,NEWSPAPER AND MAGAZINES ARE BECOMING POPULAR AMONG EDUCATED FAMILIES

•     DIRECT MAIL ADVERTISING

•     WALL PAINTING

•     INFORMAL MEDIA

1.       FARM TO FARM /HOUSE TO HOUSE :-SALES PEOPLE VISITS THE VILLAGERS AND HIGHLIGHT THE PRODUCT BENEFITS

2.       GROUP MEETING OF RURAL CONSUMERS :-OPINION LEADERS COULD BE REQUESTED TO SHARE THEIR EXPERIENCES WITH THE PARTICIPANTS. BANKS, AGRICULTURAL INPUTS AND MACHINERY COMPANIES

3.       OPINION LEADERS : IS A PERSON CONSIDERED TO BE KNOWLEDGEABLE AND IS CONSULTED BY OTHERS AND HIS ADVICE IS FOLLOWED

4.       RURAL ENTERTAINMENT PROGRAMME :DANCES,DRAMAS ,MAGIC SHOWS,TAMASHA ECT

•     FOR EXAMPLE BROOKE BOND HAVE STARTED ALL INDIA CAMPAIGNS TO PROMOTE KADAK CHAAP TEA THROUGH MAGIC SHOWS

•     PRODUCT DEMONSTRATION :SEEING IS BELIEVING.SALES PROMOTION OF DETERGENTS,PRESSURE COOKERS,SHAMPOO AND USE OF TRACTOR ETC