1.
EXECUTIVE SUMMERY
In the world where only permanent thing is “the change”. The market of every profession and
product is changing at a nano- second space. Today market for every category of profession has
become highly competitive added with increasing awareness of the consumer.
'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in
villages. Rural marketing is an evolving concept, and as a part of any economy has untapped
potential; marketers have realized the opportunity recently. Improvement in infrastructure and
reach, promise a bright future for those intending to go rural.
Rural consumers are keen on branded goods nowadays, so the market size for products and
services seems to have burgeoned. The rural population has shown a trend of switching to a state
of gradual urbanization in terms of modernisation and the shift is because of saturation of urban
market. Rural marketing strategies are significantly different from the marketing strategies aimed
at an urban or industrial consumer. Study objectives revolve around these strategies, covered
with case studies.
• Client and location specific promotion
• Joint or cooperative promotion..
• Bundling of inputs
• Management of demand
• Developmental marketing
• Unique selling proposition (USP)
• Extension services
• Business ethics
• Analyzing mindset of consumers before purchasing
• Brand ambassadors – impact
Earlier, the general impression was that the rural markets have potential only for agricultural
inputs like seed, fertilizers, pesticides, cattle feed and agricultural machinery. There is a growing
market for consumer goods as well. On account of the green revolution in India, the rural areas
are consuming a large quantity of industrial and urban manufactured products. In this context, a
special marketing strategy, namely, rural marketing has taken shape.
A wide array of problems hinders marketers in approaching rural areas with confidence. The lack
of fair weather roads, widely dispersed villages, low density of population, lack of bank and
credit facilities, multiple tiers, higher costs and administrative problems, and lack of retailers are
the problems in rural distribution. Intelligent way of approaching rural areas is required. The
emerging distribution approaches include: Cooperative societies, petrol bunks, agricultural input
dealers, NGOs, etc
Henceforth, we feel that only those companies will survive and win over the rural consumers
who apply strategies in innovative ways by understanding the mindset of them.
An exposure to the organizational functioning provides one like me, who is pursuing a
professional course like MMS, an opportunity to enrich his theoretical knowledge with of
practical experience.
2. OBJECTIVE OF THE PROJECT
"Any task without sound objectives is like Tree without roots". Similarly in case of any
research study undertaken, initially the objectives of the same are determined and accordingly
the further steps are taken on.
A research study may have many objectives but all these objectives revolve around one major
objective which is the focus of the study.
In this study, the focus is on the emergence of rural markets as the most happening market on
which every marketer has an eye. And so this study will be based on studying the emergence of
rural market in various contexts. The following are the objectives of this research study:-
To study the emergence of rural markets in the context of India.
To study the present scenario of rural marketing in India.
To study the role of advertisement in rural India.
To study the constraints in marketing communication in rural India.
To study the future prospects of rural markets.
To study the challenges faced by rural marketers in India.
To study the reasons of popularity of rural markets in India.
2. ABSTRACT
Rural Markets have seen a big boom in terms of opportunities they provide to the
corporate sector in India. Rural India had a share of over 55 per cent in total consumption of
FMCGs (Fast Moving Consumer Goods), and had a growth of about 14 per cent per annum
during the period 1997-98 to 2008-09. This seems to be a fairly good growth by any standard.
The rural market’s contribution to the total national market had gone up from 28 per cent in 1995
to 47 per cent in 2005. The size of rural market in 1992 was of the order of Rs. 40,000 crores,
made-up of Rs. 22,000 crores for non-food items and Rs. 18,000 crores for food items.
According to data furnished by National Council for Applied Economic Research
(NCAER) clearly showed a great rural market boom. The Chief Economist of NCAER (based on
this data) clarified “that rural growth rates have already outpaced urban ones and will continue to
do so through the next decade. So, a presence in the rural market will not remain a choice, but a
necessity”. The companies will have no choice but to go rural if they must survive. Findings of
the study conducted by NCAER in1998-99 showed that, (i) Rural markets for group I durables
(less than Rs. 1000 in value: items like transistors, pressure cookers, wrist-watches, bicycles,
etc.) are bigger than urban markets already; predicted that (ii) rural markets for group II durables
(Rs. 1001- Rs. 6000 in value: items like B&W TVs, sewing machines, mixers, cassette
recorders) will be bigger than urban markets by 2001-02; (iii) for group III durables (Rs. 6001 or
more in value: like color TVs, refrigerators two-wheelers and washing machines) rural markets
will be smaller than urban ones, even in 2006-07; and showed that (iv) rural market growth rates
are faster than urban ones, even on the larger bases of group I & II. The NCAER data also
showed that India is now seeing a dramatic shift towards prosperity in rural households. It
predicted that the lowest income class will shrink from more than 60% in1994-95 to 20% in
2006-07. The higher income classes will be more than double. Rural economy has triggered. Ten
good rains in a row from 1980-81 to have 1998-99) boosted food grain production. Procurement
prices have also been rising. This implies growing rural prosperity and demand for goods. The
NCAER data clearly showed that Rural FMCG (Fast Moving Consumer Goods) market will
boom.
Some impressive facts about rural sector:
I. The number of rural supermarkets (haats) in India 42,000 exceeds the total number of retail
chain stores in the US (35,000).
II. In 2001-02, LIC sold 55 percent of its policies in rural India.
III. Of the 20 million who have signed up for Rediffmail, 60 per cent are from small towns. Of
the one lakh who have transacted on Rediff online shopping site, 50 per cent are from small
towns.
IV. 24 million Kisan Credit Cards (KCC) issued in rural areas exceeds the 17.7 million credit
plus debit cards issued in urban India. A whopping Rs. 52,000 crore has been sanctioned under
the KCC scheme.
INTRODUCTION
The footfalls in the villages are getting louder and louder as companies scramble to woo the
rural consumers. Villages are no longer an abstraction, but fashionable in marketing terms. From
talking endlessly about potential growth, companies are now actively cultivating the rural
markets. And why not?
Consider the market; out of five lakh villages in India only one lakh have been tapped so far.
What has made the rural consumers so attractive to companies now? After all, the 122-million
village households were not created overnight.
The answer is simple. The urban market is getting saturated while villagers are flush with
'disposable income' thanks to bountiful harvests in the last four years. It is this income that the
companies are raring to cash in on. The estimate speaks of the potential volume of business that
can be generated in rural Indian markets. The estimate is about three times that of the European
market.
Hindustan Lever's 'Operation Bharat' will reach 22 million new households in the villages by
the end of the year.
Every area that has a police station will soon boast a Godrej dealer & service center.
A dramatic change is in progress. Villagers who used to crack open peanut candies, eat the
nut and throw away the shell are now demanding chocolate candies that will melt in their
mouths, not in their hands. Charcoal-cleaned teeth are a rare sight; so is the case with twigs of
niim (neem) and babul (babool) tree. Today, the ultra bright shine of Colgate or some other
international brand of toothpaste holds more appeal than the traditional methods of cleaning
teeth. Even the native expressions of cleaning teeth, such as daatun karnaa and musaag laganaa,
are endangered to being replaced by new expressions such as paste karnaa, 'to brush teeth with
paste'. Even a simple query such as “Where are you from?” is not free from the overtones of
marketization and globalization in rural discourse. Consumerism and globalization is invading
parts of India where, as some would venture to say, time seems to have ceased for centuries. Yet
there has not been substantial progress in this area.
It can be seen that now 73% of India’s total population is rural. Though over the last
decade, there has been a marginal reduction in the rural population expressed as a percentage of
total population, there has been a steady growth in rural population in terms of absolute numbers.
And, it had reached 74 crore by 2001. In terms of households, the rural market consists of more
than 12 crore households, forming over 70 per cent of the total households in the country.
Urban population in India is concentrated in 3200 cities and towns whereas the rural population
is scattered across 630,000 villages. Even the FMCG giant, HLL, directly reaches only 70,000
villages of the country. This goes to prove that the rural market is scattered over a large area and
is very difficult to penetrate.
Nearly 60 % of the rural income comes from agriculture. Hence rural prosperity and
disposable income with rural consumers is linked largely with agriculture. 50 % of the
households in the rural economy are in the income category of less than Rs. 25000 per annum,
but about 14% of the households have an annual income that exceeds Rs. 50,000.
The rate of growth of the rural market segment is however not the only factor that has driven
marketing managers to go rural. The other compelling factor is the fact that the urban markets
are becoming increasingly complex, competitive and saturated.
The policies of the government largely favor rural development programs. This is clearly
highlighted by the fact that the outlay for rural development has risen from Rs 14000 crore in the
7th plan to Rs 30000 crore in the 8th plan period. In addition, better procurement prices fixed for
the various crops and better yields due to many research programs have also contributed to the
strengthening of the rural markets. This attraction towards the rural markets is primarily due to
the enormous variation in the demands of approximately 740 million rural people. Thus, with the
rural markets bulging in both size and volume, any marketing manager will be missing a great
potential opportunity if he does not go rural.
'Rural markets are future battlegrounds'
