Marketing Strategies For Rural Indian Markets

MARKETING STRATEGIES FOR
RURAL INDIAN MARKETS

Introduction
Rural Marketing
Assessing, stimulating and

converting the purchasing
power of rural consumer into
an effective demand for
specific products and services.
Gaps
Bridge by Govt. & Development. Agencies
1) Low priority to Agriculture.
2) Failure of Land Reforms.
3) Inadequate Food Supplies.
4) Slow growth of Infrastructure.
5) Inadequate Inputs
6) Slowdown of rural Industrialization.

Phases of Rural Marketing
PHASE I (before mid 1960's)
Considered as a synonymous with

"Agricultural Marketing".
Referred to marketing of 118 rural

products in Rural and Urban areas and
agricultural inputs in rural markets.
PHASE II (mid 1960's-mid 1990's)
Better irrigation facilities, soil testing, use of high yield

variety seeds, fertilizers, pesticides and employment of
machinery like power tillers, harvesters' crushers.
Two separate areas of activity had emerged- the new

"marketing of agricultural inputs " and the conventional
"agricultural marketing".
Formation of agencies like Khadi and Village Industries

Commission, Girijan CooperatIve Societies and Apco
Fabrics
PHASE III (After mid 1990's)
India's Industrial Sector had gained

strength and maturity.
The market has grown for household

consumables and durables.
Development programs run by Central and

State Governments.
TAXONOMY OF RURAL MARKET
• Watches,
• Bicycles,
• Radio,
Durables :
• T.V,
• Kitchen Appliances Furniture,
• Consumables,
• Food- Products,
•
Products :
Toiletries,
• Cosmetics, etc
• Individuals Constituents:
• Households.
CONSUMER MARKET
INDUSTRIAL MARKET
 Constituents :
 Agricultural and allied activities,
 Poultry farming,
 Fishing,
 Animal husbandry,
 Cottage Industries,
 Panchayat office etc.
 Products :
 Consumables,
 seeds,
 Fertilizers,
 Pesticides,
 Petroll diesel etc.
 Durables :
 Tillers,
 Tractors,
 Pump sets,
 Generators,
 Boat etc.
• Repairs,
• Transport,
• Banking credit,
•
Services :
Insurance,
• Education,
• Communications etc
• Individuals,
• Households,
•
Constituents:
Offices
• Production firms.
SERVICES MARKET
MARKET DIFFERENCES WITH URBAN
MARKET
Environment Differences
Small settlement units of villages widely dispersed.
Low Infrastructure level (such as road, electricity

etc.)
Low Density of population per square kilometer of

space
Poor physical connectivity with other villages and

towns, Low mobility.
Social Relations-Peculiar Aspects
Less number of impersonal interactions, more frequent

interactions between the same people.
Individual better known and with a strong identity of his/her

own
Status is ascribed: determined by births in a family, lineage.

Strong class structure.
Social norms influencing individuals are more visible.

DEPENDENCE ON NATURE
Abundance of Natural Resources and high dependence

on them for a large number of households needs.
High dependence for livelihoods, employment and

Income on Natural factors.
Differential access to resources based on Caste,

Political and Money Power etc.
STRATEGIES
PRODUCT STRATEGIES
Includes product mix changes
Modernization and product design considerations.
Competitive product strategies
Identity strategies
Customer value strategies
Packaging strategies
Branding strategies
PRICING STRATEGIES
Quality conscious : Discriminatory, perceived

value and psychological pricing.
Value conscious : Psychological, value,

penetration and skimming.
Price conscious : Low prices, Premium pricing

(small units) and barter pricing.
PROMOTION STRATEGIES
Mass media (Radio, Cinema, Press and TV)
Local media (Haats and Melas, Wall painting,Leaflets,

Video vans, Folk media, Animal parade)
Personalised media includes direct communication,

dealers, sales persons and researches
BY PROMOTING PRODUCTS WITH INDIAN MODELS AND

ACTORS
DISTRIBUTION STRATEGIES
Distribution Channel Includes:
a) company depot
b) Redistribution stockiest, clearing agents
c) Semi wholesalers and retailers
d) Itinerant traders, Vans, Sales people, NGOs and garment agencies

Communication Strategies
BY COMMUNICATING AND CHANGING QUAL- ITY

PERCEPTION
BY PROPER COMMUNICATION IN INDIAN

LANGUAGE
BY TARGET CHANGING PERCEPTION

Other Strategies
BY DEVELOPING RURAL-SPECIFIC PRODUCTS
BY ACQUIRING INDIAN BRANDS
BY GIVING INDIAN WORDS FOR BRANDS
BY ASSOCIATING THEMSELVES WITH INDIAN

CELEBRITIES
What kinds of themes are attractive
to rural consumers?
Need category : Quality of life messages -nutritious,
healthy.
Problem category : Convenience, economy I hassle free,

easy to maintain, lifetime companion, a friend in need and
the way to prosperity.
Desire category : Independence, status, luxury etc.
Ideal category : Communal harmony, social cohesiveness,

religious conformity, national integration and peace.
CASE STUDIES
NIRMA
This washing powder adopted a market penetration strategy
based on price which was 40%.
lower than the highest priced product in the market.
Its distribution efforts were highly concentrated in Western

and Northern zones.
It made the industry leader lose its market share

substantially in those zones.
Nirma is possibly the largest detergent brand in the world

with sales of 700,000 tonnes a year.
PROMISE TOOTHPASTE
The Company, Balsara, decided to "against
position" the new product and aimed at No.2
position.
The advertisements were framed so as to offer all

the benefits being claimed by No.1 in a positive
sense.
The product became a success with growth rate of

30% in a market expanding at the rate of 7%.
LIFEBUOY SOAP
Success of this soap can be attributed to the right

market focus.
The market segment is clearly identified as the lower

income segment and price sensitive.
Recently HUL introduced a new segment "Fighting

sweat", for relatively higher incomes.
This culminated in "Lifebuoy Plus" a pink coloured

deodorant soap at a price higher than Lifebuoy.
ASIAN PAINTS
They entered the exterior decorative segment with "ace", focusing on

non-metro markets. "Utsav“ and "Opal PuB followed.
Advertisements in TV and cinema are resorted to before festivals like

Pongal in Tamilnadu and other festivals elsewhere when demand for
outdoor decorative paints.
It is recognized that turnover and volume growth will come from rural
markets.
Mobile vans and demonstration cum sales techniques are used to flog
"Utsav" brand.
RUF AND TUF JEANS
A ready to stitch jeans for the first time users priced at Rs.195/- as against the
unorganized sector's range of Rs.150-3501-
Arvind mills, India's leading denim manufacturer created this new product specifically
for the rural market.
The kit included a denim trouser length with specific tailoring instruction and the
branded zipper, rivets and buttons that distinguish jeans in the consumer's mind.
The product was made available in villages with a population as small as five
thousand.
Local cloth shops were used as retail outlets.
Seminars were organized to train tailors in denim fits and inform them about the
changes required in sewing machines for stitching jeans.
The additional machine accessories were initially provided free of cost and later at a
subsidized rate.
OUTCOME
The strategy worked. In the first two months, demand crossed a million
pieces as against a production capacity of 2,50,000 kits. So, the company had
to stop advertising.
Consumer feed back showed that nearly 75% were first time jean wearers.
R& T shorts and ready-made jeans were' launched for the slightly more
evolved customer who demanded jean specifics like the right wash.
This is a perfect example of brilliant product promotion.

PSYCHOGRAPHIC
SEGMENTATION
In some parts of Gujarat, it is

reported that farmers are going in for
big 50 HP tractors when their need
was for smaller 25 to 30 HP ones. The
reason was compulsion to "Keep up
with the neighbours". Now M&M has
come out with 35 HP and 45 HP
tractors name "Sarpanch" to flatter
the ego of such buyers and retain
them.
PRODUCT LINE PRUNING
HUL is pruning its eighty strong

brand portfolio to the 30 power
brands, which account for 75% of its
FMCG turnover. This is an example
of optimization of resources to
achieve more with the same ad-
spend and marketing effort.
LINE MODERNISATION
HUL relaunched VIM dish wash

bar with a superior formulation.
Vim bar, the first such product
fuelled the growth of dish wash
bar segment by over 200% in five
years. It converted customers
from unbranded proxy products
like ash and mud.
BRAND AWARENESS BUILDING
In 1990, TVS launched TVS 50 XL as a

"value for money" vehicle. This was
supported by massive advertising
campaigns on TV to increase awareness of
the brand. TVS spent around Rs.1.5 crore
on the "Namma ooru Vandi" (Our own
vehicle) which showed people from
various walks of life swearing by TVS 50
XL.
USE OF INTERNET FOR RURAL MARKETING
ITC has launched three web-based initiatives (E-Choupals in company speak) as part of
its strategies to vertically integrate its sourcing operations. Aqua Choupal.com in
Andhra Pradesh, Soyachoupal.com in M.P and Planters net.com in Karnataka.
ITC - .has setup 235 Internet kiosks, which cater to 10,000 farmers and cover
2,50,000 hectares of land.
ITC Info Tech structured the entire virtual interaction model and Meta markets for
inputs like fertilizers, pesticides etc. that the farmers in different states can use.
Its plan was to set up 3000 kiosks to cover 100000 farmers. The idea is to use this
network as a distribution channel for other products
AMUL
It recognized the fragmented and rural nature of milk production in

India.
It organized a very efficient milk collection network and supported

small dairy farmers with a variety of extension services.
It installed very modem processing and packaging facilities.
Used mass advertising very effectively to build high levels of brand

awareness and preference for its products.
THE OUTLOOK
This new century brings a host of challenges and

opportunities in the rural market as the younger
generation frees itself from the bonds that tied down the
previous one.
India's democracy allows the people to change the

government if the majority of the voters feel strongly
about the lack of basic amenities
Though marketers are alive to the importance of rural

markets it would be very difficult to wean the rural
customer away from regional or local brands unless there
is perceived benefit in price or value.
Contd…
In FMCG Sector, the next battle for a market share in rural areas
would be between local or regional brands on one side and national
brands on the other. The former would fight like hell using all means
fair and foul to retain their share of market and survive.
In the white goods sector the battle would be between new producers
with latest technology and the older ones. The success of LG and
SAMSUNG in penetrating both urban and rural sectors in a short time is
a lesson in market approach.
Local brands have so far used gut feeling and plain common sense in
their marketing operations, as well as direct contact with the
retailers. When they scale up to regional level, they use low cost
media as Cable TV, Radio and Regional print media. This enables them
to reach more customers while retaining existing ones.
Contd………
Agricultural inputs such as fertilizers and pesticides may see a

price increase and volumes may fall as more and more farmers
turn to "Precision farming”.
Increased incomes in the rural sector should result in investment

in goods and services enabling a better quality of life, like better
housing schooling and more white goods. But a portion may be
wasted in conspicuous consumption and even wasteful
expenditure as on liquor. Campaigns should be launched in such
areas to avoid such evils.

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MARKETING STRATEGIES FOR

RURAL INDIAN MARKETS

Assessing, stimulating and

1) Low priority to Agriculture.

2) Failure of Land Reforms.

3) Inadequate Food Supplies.

4) Slow growth of Infrastructure.

6) Slowdown of rural Industrialization.

PHASE I (before mid 1960's)

Considered as a synonymous with

Referred to marketing of 118 rural

Better irrigation facilities, soil testing, use of high yield

Two separate areas of activity had emerged- the new

Formation of agencies like Khadi and Village Industries

India's Industrial Sector had gained

The market has grown for household

Development programs run by Central and

Small settlement units of villages widely dispersed.

Low Infrastructure level (such as road, electricity

Low Density of population per square kilometer of

Poor physical connectivity with other villages and

Less number of impersonal interactions, more frequent

Individual better known and with a strong identity of his/her

Status is ascribed: determined by births in a family, lineage.

Social norms influencing individuals are more visible.

Abundance of Natural Resources and high dependence

High dependence for livelihoods, employment and

Differential access to resources based on Caste,

Includes product mix changes

Modernization and product design considerations.

Competitive product strategies

Customer value strategies

Quality conscious : Discriminatory, perceived

Value conscious : Psychological, value,

Price conscious : Low prices, Premium pricing

Mass media (Radio, Cinema, Press and TV)

Local media (Haats and Melas, Wall painting,Leaflets,

Personalised media includes direct communication,

BY PROMOTING PRODUCTS WITH INDIAN MODELS AND

Distribution Channel Includes:

b) Redistribution stockiest, clearing agents

c) Semi wholesalers and retailers

d) Itinerant traders, Vans, Sales people, NGOs and garment agencies

BY COMMUNICATING AND CHANGING QUAL- ITY

BY PROPER COMMUNICATION IN INDIAN

BY TARGET CHANGING PERCEPTION

BY DEVELOPING RURAL-SPECIFIC PRODUCTS

BY ACQUIRING INDIAN BRANDS

BY GIVING INDIAN WORDS FOR BRANDS

BY ASSOCIATING THEMSELVES WITH INDIAN

Problem category : Convenience, economy I hassle free,

Desire category : Independence, status, luxury etc.

Ideal category : Communal harmony, social cohesiveness,

lower than the highest priced product in the market.

Its distribution efforts were highly concentrated in Western

It made the industry leader lose its market share

Nirma is possibly the largest detergent brand in the world

The advertisements were framed so as to offer all