Unit 1.

Introduction to Rural Marketing:

Concept of Rural Marketing;

Definition: The Rural Marketing refers to the activities undertaken by the marketers to
encourage the people, living in rural areas to convert their purchasing power into an effective
demand for the goods and services and making these available in the rural areas, with the
intention to improve their standard of living ...

Rural marketing is a process of developing, pricing, promoting, and distributing rural

specific goods and services leading to desired exchange with rural customers to satisfy their
needs and wants, and also to achieve organizational objectives.

The rural market of India started showing its potential in the 1960s. The 70s and 80s witnessed
its steady development. And, there are clear indications that the 21st century is going to see its
full blossoming. In our country, where research on consumer behaviour has been nominal, not
much systematized information is available about the rural consumers. Only a few enlightened
companies, known for their marketing orientation, viz., Hindustan Lever, Philips India, Asian
Paints, Singer and Larsen and Toubro have made concrete efforts in this direction. But, by and
large, we have still to understand the rural buyer, 3 his habits, attitudes and behaviour,
particularly from the marketing point of view. Many assumptions prevail about rural marketing.
For instance, one assumption is that the rural buyer is not very discriminating. Once he is
persuaded to buy a particular product, he develops a strong affinity for it, and if satisfied,
becomes brand loyal. As a result, Indian manufacturers are generally known to prefer selling
fewer items at higher prices than selling more items at lower prices. A contrary view is that the
rural buyer, being suspicious of the marketer’s hardsell techniques, is quite discriminating, and is
not easily persuaded. Yet another assumption is that the rural buyer is not particularly keen about
quality and packaging. Some other assumptions can be quoted. But, all these need deep probing
for arriving at valid and reliable conclusions. Consumer research, thus, is indispensable for
entering the rural segment of the market.

Rural Market Environment; It comprises of Social,cultural,political and Technological

environment

Social and Cultural Environment

 Variations between regions and sub-regions
 In villages inward migration is insignificant while outward migration to urban and
foreign is reasonably high
 The settlement pattern is in clusters largely around caste lines
 Houses are largely semi-pucca and kacha
 Land is the primary source of livelihood
 Activities limited to smaller geographic areas resulting in higher adherence to customs
and traditions

Village Community:
  Villages are self-sufficient and autonomous
 Each village has a council of elders (panchayat)
 Panchayats have the constitutional authority for exercising self-governance
 The panchayat structure has undergone change with elections and reservation for
underprivileged families
 Shift from subsistence farming to commercial and mixed farming has made the village
dependent on external factors

Political Environment:
 The panchayats were dominated by upper castes
 The panchayati raj system has introduced an integrated and inclusive approach to
governance in the rural sector
 Villages with 5000 population or a cluster of villages with a combined population of
5000 form a panchayat
 Gram Sabhas are to be organised once a quarter to bring in transperancy, accountability
and achievement
 The sarpanch represents the village at the tehsil/taluka/ block level

Tecnological Environment:
 Triggered by three major revolutions:
 Green Revolution (1967 to 1978) to bring about food self-sufficiency. Resulted in
adoption of high yield seeds, fertilisers, pesticides, and farm mechanisations
 White Revolution – Milk production through producer cooperatives and moving
processed milk to urban-demand centres. Milk production has gone up from 17 million
tonnes in 1950-51 to over 100 million tonnes in 2007-08
 The NGO movement has created grassroot level assimilation of technological extensions
in rural areas
 NGOs have also been instrumental in providing health, homes, hygiene, child care,
education and other social development programmes

Characteristics of Rural Markets;

There is a saying that the proof of the pudding lies in eating it, like this the proof of all
production lies in consumption or marketing. The speed of technological improvement increases
the buying capacity in people. They prefer more and better goods and services. The globalization
of the Indian economy has given an advantage to production and mass distribution of goods and
services. Taking these into consideration, there may arise a question whether marketers can
concentrate their activities in urban India consisting of metros and large industrial townships
only, or extend their activities to rural India. The heart of India lies in its rural parts. Rural
market is different from urban market with respect to its economic and functional characteristics.
The characteristics, purchasing and consumption pattern of rural people are completely different
from the urban people. Due to the impact of globalization there is a fast change in rural
environment. The composition of supply and demand has also changed significantly
The following are the characteristics of rural markets:

 Here agriculture is first and also the main source of income.

 This income is seasonal in nature and fluctuates as it depends on crop production.
 Though it is large, the rural market is geographically scattered.
 It shows religious, cultural and economic disparities.
 The market is not much developed, because the people here exercise adequate
purchasing power.
 These markets have their orientation in agriculture, with poor standard of living, low
per capital income and backwardness.
 It shows sharper and different regional preferences with distinct predictions, habit
patterns and behavioral aspects.
 Rural marketing process is an outcome of the general rural development process
initiation and management of social and economic change in the rural sector is the core of
the rural marketing process.

Profile of Rural Demand;

According to the third annual edition of Accenture Research, “Masters of Rural Markets: From
Touchpoints to Trustpoints - Winning over India's Aspiring Rural Consumers,” rural consumers
are particularly aspiring or striving to purchase branded, high quality products. Consequently,
businesses in India are optimistic about growth of the country's rural consumer markets, which is
expected to be faster than urban consumer markets. The report highlights the better networking
among rural consumers and their tendency to proactively seek information via multitude sources
to be better informed while making purchase decisions. Importantly, the wider reach of media
and telecommunication services has provided information to India’s rural consumers and is
influencing their purchase decisions. In line with general trend, rural consumers are evolving
towards a broader notion of value provided by products and services which involves aspects of
price combined with utility, aesthetics and features, and not just low prices.
The hinterlands in India consist of about 650,000 villages. These villages are inhabited by about
850 million consumers making up for about 70 per cent of population and contributing around
half of the country's Gross Domestic Product (GDP). Consumption patterns in these rural areas
are gradually changing to increasingly resemble the consumption patterns of urban areas. Some
of India's largest consumer companies serve one-third of their consumers from rural India.
Owing to a favourable changing consumption trend as well as the potential size of the market,
rural India provides a large and attractive investment opportunity for private companies.

India’s per capita GDP in rural regions has grown at a Compound Annual Growth Rate (CAGR)
of 6.2 per cent since 2000. The Fast Moving Consumer Goods (FMCG) sector in rural and semi-
urban India is expected to cross US$ 20 billion mark by 2018 and reach US$ 100 billion by 2025

Growth and Development of Rural Market;

Following are some of the major investments and developments in the Indian rural sector.
  The Ministry of Rural Development is expecting to achieve its annual targeted length of
48,812 kilometers of rural roads by March 31, 2017 under the Pradhan Mantri Gram
Sadak Yojana (PMGSY), which has reached a completion stage of 67.53 per cent (32,963
kms) as on January 27, 2017.
 The National Bank for Agriculture and Rural Development (NABARD) plans to provide
around 200,000 point-of-sale (PoS) machines in 100,000 villages and distribute RuPay
cards to over 34 million farmers across India, to enable farmers to undertake cashless
transactions.
 Magma Fincorp, a Kolkata-based non-banking finance company (NBFC) plans to expand
its operations in South India, with specific focus on rural and semi-urban markets to help
the company grow rapidly.
 The Ministry of Textiles has signed memorandum of understanding (MoU) with 20 e-
commerce companies, aimed at providing a platform to artisans and weavers in different
handloom and handicraft clusters across the country to help them sell their products
directly to the consumer.
 The Ministry of New and Renewable Energy (MNRE) has an annual target of setting up
one lakh family size biogas plants to the states and union territories for FY 2016-17.
 Indian Institute of Technology-Madras (IIT-M) has entered into a three-year partnership
with Nokia Networks to create technology solutions which will enhance broadband
connectivity in rural India.
 The United Economic Forum (UEF), an organisation that works to improve socio-
economic status of the minority community in India, has signed a Memorandum of
Understanding (MoU) with Indian Overseas Bank (IOB) for financing entrepreneurs from
backward communities to set up businesses in Tamil Nadu. As part of the agreement,
entrepreneurs who have been chosen by the UEF, will get term loan / working capital
requirements from the bank. The UEF will appoint mentors to guide entrepreneurs for
successful implementation of the project, with both IOB & UEF periodically monitoring
the progress of the project.
 Tata Motors, India's biggest automobile company by revenues, plans to aggressively
expand its network with a focus on rural markets. The company is aiming to more than
triple its network to 1,500 over the next three years from 460 now, making it the biggest
such expansion by a passenger vehicle maker in the country so far.
 Bharti Airtel is applying for a payments bank licence and has involved Kotak Mahindra
Bank as a potential investor in the venture, in a bid to tap significant revenue
opportunities from the Reserve Bank of India's financial inclusion initiative. Payments
banks are meant to fan out into the rural, remote areas of the country, offering limited but
critical services such as money transfers, loans and deposit collection. While banks have
the knowhow, telecom companies have the network, making it an ideal match.

Constraints in Rural Marketing:

1. Wide and Scattered Market:

Wide and scattered market is difficult to reach in both the aspects – promotion and
distribution. Rural India is spread in the entire county in around 6 lakhs villages of
different sizes while urban population is concentrated in around 3200 cities. Most of
villages are extremely small with population less than 500 people. Only one percent
(6300) villages have a population of more than 5000. It is challenging tasks to choose
target markets and to serve them effectively.

2. Problem of Designing Products:

Products sold successfully in urban markets, may not necessarily be successful in the
rural markets due to difference in utility value of the products. Mind-set of rural segments
seems quite astonishing and different. Existence of considerable heterogeneity among
rural folks poses challenges for marketers to incorporate their uneven expectations in the
products.

3. Transportation Bottleneck:

Transportation is the nerve centre for any type of business. Most of villages are not
properly connected with main roads. Every year during monsoon thousands of villages
are disconnected for a longer time. Lack of proper transportation hinders marketing
activities. Agro-based products cannot be sent to marketing centers, and industrial
products cannot be supplied to rural population safely in time. In certain areas, even
construction of road or railway is difficult to construct and maintain.

4. Seasonal and Irregular Demand:

Rural demand is characterized as seasonal and irregular. So, companies cannot

concentrate on rural segments as it is difficult to plan. In the same way, demand depends
on income of rural customers, and income is quite uncertain because they depend on
agriculture, and agriculture depends on monsoon.

5. Uncertain and Unpredictable Market:

Market response is difficult to scale. They don’t have stable and predicted behaviour. In
such a situation, the effective marketing strategies do not make a sense. Rapid changes
are difficult to incorporate and, hence, there are more chances to suffer. Overwhelming
response of rural population to some products experiences sudden fall. Market planning
remains ever challenging in rural segments.

6. Low Living Standards:

Rural customers have low income, low purchasing power, low literacy rate, and,
therefore, low standard of living. But, picture is now changing and marketers can have
better opportunities than ever. Low standard of living restricts their buying ability and
pace of adopting products.

7. Lethargic Life Style:

Lack of desire for a new life style is most critical issue for a marketer. They cannot be
easily convinced to try, use and adopt certain products with better qualities and
innovative features Product modification does not create desirable and positive effects on
rural folks. Customs, established beliefs, superstitions, etc., restrict their behaviour.
Unfortunately, their opinion leaders lack scientific approach. Innovative and superior
products are difficult to be introduced successfully in rural areas.

8. Language Problem:

Language is a main constrains in communication strategies. Multiplicity of languages

spoken in rural areas makes marketing activities difficult. Languages differ from state to
state, and area to area in the same state. While designing advertising, personal selling,
and publicity strategies, marketers cannot fulfill linguistic expectation of all rural people.
Promotion programme always lacks versatility.

9. Urban Marketers v/s Rural Customers:

The executives in companies cannot understand the consumer psychology of rural

markets. Lack of awareness and understanding about consumer behaviour in rural
markets create problems in formulating marketing strategies. Rural and urban customers
significantly differ in terms of habits, tastes, uses, preferences, and other such aspects.
So, any attempt to satisfy rural customers with urban mind (marketing executives born
and brought-up in urban climate) results into vain endeavor.

10. Backwardness:

Rural customers are economically backward. More than 30 per cent of the rural masses
live below the poverty line. Poverty confines them to spend even for basic necessities.
Backwardness also affects their mentality to change. Their poor purchasing power and
rigidity are main constraints for marketers to serve them.

11. High Inventory Costs:

Since rural demand is limited and uncertain, an effective inventory management is

difficult. Besides, the retailers serving in rural areas don’t have adequate knowledge and
aptitude to decide optimum inventory. Unnecessary stocks cut their profit margin, and
they lose customers in case of inadequate stocks.

12. Inadequate Marketing Support:

Normally, producers and wholesalers do not extend full support to rural retailers in terms
of liberal credit, financial assistance, and other facilities that they offer to traders of urban
areas. In same way, rural customers and retailers are not given adequate space in
designing overall marketing programme.

13. Other Problems:

Over and above these problems, there are many minor and major difficulties that rural
marketers have to face. It is not possible to discuss them in detail.
Unit 2. Rural Consumer Behaviour:

Rural Consumer Behaviour - The purchase decision is evolved overtime and is purely based on
rational thinking. There is great stress on value for money. Rural buyers are quality conscious as
their urban counterparts but the emphasis is on the functionality was that rural consumption is
characterized by collective decision making and it is highly influenced and opinion driven. While
an urban consumer may return for his preferred brand, if it is not available when he goes to buy
it, a rural consumer may not. Rural buyers go in for outright purchase rather than any other
option. In general, it has been a recognized fact that rural consumers are relatively more brand
loyal than their urban counterparts. And here too, the collective principle works. That is why
there are Nirma villages, Wheel villages, Escorts villages and M&M villages. Against this, there
are reports that rural people are also exhibiting tendencies of disloyalty.

Factors Affecting Rural Consumer Behaviour;

Five important Factors affecting Rural Consumer Behaviour

A. Marketing Mix Factors

B. Personal Factors
C. Psychological Factors
D. Social Factors
E. Cultural Factors

Marketing Mix Factors:

Each component of the market mix—product, pricing, promotion and place of

distribution—has a direct or indirect impact on the buying process of the consumers.

1. Product:

The special characteristics of the product, the physical appearance and the packaging
can influence the buying decision of a consumer.

2. Pricing:

The price charged on the product or services consumed by the consumer affect the
buying behaviour of the consumers. Marketers must consider the price sensitivity of
the target customers while fixing prices.

3. Promotion:

The variables of promotion mix such as advertising, publicity, public relations, per-
sonal selling and sales promotion affect the buying behaviour of the consumers.
Marketers select the promotion mix after considering the nature of the target
audience.
 4. Place:

The channels of distribution and the place of distribution affect the buying behaviour
of the consumers. The marketers makes an attempt to select the right channel and
distribute the products at the right place.

Personal Factors:

The personal factors such as age, occupation, lifestyle, social and economic status and
the gender of a consumer may affect the buying decisions of the consumers
individually or collectively.

1. Age factor:

The age factor greatly influences the buying behaviour. For example, teenagers prefer
trendy clothes, whereas office executives prefer sober and formal clothing.

2. Gender:

The consumer behaviour varies across gender. For example, girls prefer certain
feminine colours such as pink, purple and peach, whereas boys go for blue, black and
brown.

3. Education:

Highly educated persons may spend on books, personal care products, and so on. But
a person with low or no education may spend less on books and more on personal
grooming products.

4. Income level:

Normally, the higher the income level, the higher is the level of spending and vice
versa. But this may not be the case in developing countries, especially in the rural
areas.

5. Status in the society:

Persons enjoying higher status in the society spend a good amount of money on
luxury items such as luxury cars, luxury watches, premium brands of clothing, jewel-
lery and perfumes.

Psychological Factors:

A person’s buying behaviour is influenced by the psychological factors such as the

following:
 1. Learning:

It refers to changes in individual behaviour that are caused by information and experi-
ence. For example, when a customer buys a new brand of apparels, and is satisfied by
its use, then they are more likely to buy the same brand the next time. Through
learning, people acquire beliefs and attitudes, which in turn influence the buying
behaviour.

2. Attitude:

It is human tendency to respond in a given manner to a particular situation or object

or idea. Consumers may develop a positive, or a negative, or a neutral attitude
towards certain products or brands, which in turn affects their buying behaviour.

3. Motives:

A motive is the inner drive that motivates a person to act or behave in a certain
manner. A marketer must identify the buying motives of the target customers and
influence them to act positively towards the marketed products.

Some of the buying motives include the following factors:

a. Pride and possession

b. Love and affection
c. Comfort and convenience
d. Sex and romance

4. Beliefs:

A belief is a descriptive thought that a person holds about certain things. It may be
based on knowledge, opinion, faith, trust and confidence. People may hold certain
beliefs of certain brands/products. Beliefs develop brand images, which in turn can
affect the buying behaviour.

Cultural Factors:

There is a subtle influence of cultural factors on a consumer’s decision process.

Consumers live in a complex social and cultural environment. The types of products
and services they buy can be influenced by the overall cultural context in which they
grow up to become individuals. Cultural factors includes race and religion, tradition,
caste and moral values. Culture also includes subcultures, sub-castes, religious sects
and languages.

1. Culture:
 It influences consumer behaviour to a great extent. Cultural values and elements are
passed from one generation to another through family, educational institutions,
religious bodies and social environment. The cultural diversity influences food habits,
clothing, customs and traditions. For example, consuming alcohol and meat in certain
religious communities is not restricted, but in certain communities, consumption of
alcohol and meat is prohibited.

2. Subculture:

Each culture consists of smaller subcultures that provide specific identity to its mem-
bers. Subcultures include sub-castes, religious sects (Roman Catholics, Syrian
Catholics, Protestant Christians, etc.), geographic regions (South Indians, North
Indians) and language (Marathi, Malayali, Gujarati).

The behaviour of people belonging to various subcultures is different. Therefore,

marketers may adopt multicultural marketing approaches, that is, designing and
marketing goods and services that cater to the tastes and preferences of the consumers
belonging to different subcultures.

Social Factors:

The social factors such as reference groups family, and social status affects the
buying behaviour. Social factors in turn reflect a constant and dynamic influx through
which individuals learn different meanings of consumption.

1. Reference groups:

A reference group is a small group of people such as colleagues at workplace, club

members, friends circle, neighbours, family members, and so on.

The reference groups influence the members in following manner:

a. They influence members’ values and attitudes.

b. They expose members to new behaviours and lifestyles.
c. They create pressure to choose certain products or brands.

2. Family:

The family is the main reference group that may influence the consumer behaviour.
Nowadays, children are well informed about goods and services through media or
friends circle, and other sources. Therefore, they influence considerably in the
decisions of buying both fast moving consumer goods and durable items.

3. Roles and status:

 A person performs certain roles in a particular group such as family, club,
organization, and so on. For example, a person may perform the role of a vice
president in a firm and another person may perform the role of a marketing manager.

The vice president may enjoy higher status in the organization as compared to the
marketing manager. People may purchase the products that conform to their roles and
status, especially in the case of branded clothes, luxury watches, luxury cars, and so
on.

Shopping Habits of Rural People;

 Buy in Small Quantity

 Does not have concept of storing goods
 Does not block capital for goods
 Need EMI or Credit system to purchase larger products
 Give importance to first time purchase
 Hardly any brand sickness
 Packaging of product plays an important role.

Changing Pattern of Rural Demand;

The position in the rural market was totally different twenty years ago. At preset there is
a demand for products like TV, fans, oil engines, readymade garments, medicine, etc.
New products like toiletries, baby care products and consumer durables are now getting
good demand. Demand pattern of rural markets are changing due to the following
reasons:

 Production of food grains has increased. This enhanced the rural purchasing
power.
 Due to 2000 Exim policy, export of Indian agricultural products increased.
 Credit facilities extended by public sector banks by kisan credit cards helps
farmers to buy agricultural and consumer goods on installments.
 Co-operative and public sector banks are extending loans to the rural people and
creating job opportunities for them.
 Cable TV has played important role in bringing change in lifestyle and
consumption habits of rural people.
 Liberalisation facilitated contract farming thus the farmer has ready market for
their produce.

4 A’s of Rural Marketing

Availability: The first challenge is to ensure availability of products and services. India’s
627,000 villages spread over 3.2 million sq. km, given the poor state road; it is not easy
to reach 700 million rural Indians.
 Affordability: The second challenge is to ensure affordability of the products and
services. With low disposable income products need to be affordable to the rural
consumers. Some companies consider it by introducing small unit packs, e.g. Godrej
introduced Fair glow in 50 gm packs.
Acceptability: The third challenge is to gain acceptability for the products and services.
Therefore there is a need to offer products that suites the rural consumer needs and
customs. E.g. LG developed a customised TV for the rural market and promoted
‘Sampoorna”.
Awareness: Events like fairs, festivals, haats etc. are to be used for brand
communication. Ideas like putting sticker on the hand pumps, walls of the wells, tin
palates on trees surrounding the ponds etc. are some of the innovative media used by soap
companies like Lux, Lifeboy, Rin and Wheel. The idea is to advertise at the time of
consumption.

Opinion Leaders;
 Individuals may be opinion leaders, opinion seekers or opinion recipients
 Women and children are demand generators
 Old people, successful farmers, head of the village can be treated as opinion leaders
 New order – or student who go to nearby town to study
 Generally all influential people who are having this generosity to suggest and other
having full faith on the same.

Understanding Rural Youth.

It is a fact that unlike a few years ago, the rural youth today are playing a far more
significant role in influencing the purchases of radios, television (black and white as well
as colour). Penetration levels of consumer durables in the rural sector have risen
dramatically in the last decade or so. It is observed that rural women are out of the closet
completely…but unlike ten years ago (when she had probably an insignificant or no role
to play) today, she is exercising her choice in select categories- the choice of brands may
still be with the males of the household. But yes, in this context the youth have certainly
begun to play a role in selecting a brand in certain product categories.
Here it is often observed that there is a tendency to follow the trends of nearest metro.
Just like so many youth in Mumbai aspire to be in U.S.A., the rural youth aspire to be in
Mumbai, Chennai or Calcutta and so on. This is like a yardstick- the city plays the
yardstick in terms of the development in the village.
Studies suggest that the rural youth are playing an increasingly important role in purchase
decisions. They are ones who actually travel out in the village frequently. So they are the
real drivers of the rural market. They may not be the final customers (those who pay
money) but often they are the people who influence the purchase of high value products
and they decide which brands to choose.
The motivators for purchase of a rural consumer are different from those in the urban
consumer. Therefore we are talking about rural youth. But when we talk about youth, we
refer to the age group of 15 to 25. In 81 rural India; it is the age group between 8 and 15
that influence most purchases-more than any other group. This is largely because they
tend to retain messages and often play back these messages to others too. Just to give an
example: Recently fair and Lovely soap in a village in Bihar. Its TV commercial (chaand
ka tukda) had debuted on prime time TV. The village kids played back the whole
commercial word by word with the product benefits, the product promise and so on. The
company team was quite surprised as they were targeting the rural women and they
observed kids who played back the commercial. So it’s the 8 to 15 age group that has
assumed importance. Even HLL and Colgate have begun targeting this age group in their
commercials.
Also, another typical rural phenomenon is that kids are sent by their mothers to purchase
something without specifying a brand. So kids tend to ask for products they have seen or
heard on radio or TV. So to a large extent, kids are driving this change as much as youth.
Unit 3. Rural Marketing Strategies:

Segmentation, Targeting, and Positioning in Rural Markets;

• With the increase in population and with the increased target groups undifferentiated
products for an undifferentiated market is a thing of the past.
• Initially, marketers in India concentrated on segmenting the urban market only as it
contributed to 75% of the revenue. With the saturation of the urban market in recent years
and the growing demand in rural markets simultaneously, the need to segment the market
is being felt increasingly.
• As economies evolve, consumer choice and requirements become more focused. This
calls for Segmenting, Targeting and Positioning (STP).
Decision Actions

Segmentin • Identifying various bases for segmenting markets

g • Developing profiles of market segments
Targeting • Evaluating the market segments for their attractiveness
• Deciding the market coverage strategy
Positioning • Identifying a set of possible competitive advantages of the brand
• Selecting the right competitive advantage
• Communicating the chosen competitive advantage to the target
customers.

Segmetation:

• Segmentation is the process of dividing a heterogeneous market, into several sub-markets

or segments, each of which tends to be homogeneous in all significant aspects.
• According to Philip Kotler, “Market Segmentation is dividing a market into distinct
groups of buyers who have distinct needs, characteristics, or behavior and who might
require separate products or marketing mixes.
• Market Segment: A group of consumers who respond in a similar way to a given set of
marketing efforts.
• Market Segments helps distinguish one customer profile from another within a given
market.
• Segmentation facilitates in understanding the needs of target buyers.
• 75% of people in rural India are engaged in agriculture, but they cannot all be clubbed
under one omnibus category of farmers.
• There are;
• large farmers,
• medium farmers,
• small farmers,
• marginal farmers and
• agricultural labourers.
 • Their income levels, lifestyles and behaviour are different from each other.

Segmentation :

 Geography
o Region
o Village size
o Density
o Climate
o Culture
 Demographic
o Age & Life Cycle
o Family Structure
o Gender
o Income
o Education etc
 Psychographic
o Social Class
o Life Style etc
 Behavioural
o Occasion
o Benefits Sought
o Place of Purchase

Targeting :

Targeting involves evaluating various segments and selecting how many and which one
to target. The three aspects of targeting are evaluating, selection and coverage
• Evaluation:
- Evaluation and selection of segment:
The two main factors to be considered here are: the overall attractiveness of each
segment and company’s objectives.
- Overall attractiveness:
Size of the marketing may be huge but the purchasing power is limited.

Positioning:

Positioning is the act of designing the company’s offering and image so that it occupies a
distinctive place in the mind of the target segment.
• Identifying the positioning concept
• Product differentiation
• Service differentiation
• People
• Image
• Selection of positioning concept
 • Developing the concept

Product Strategy for Rural Markets;

• Product Concepts and Classification:

– A marketer should keep the following aspects ion mind while taking the products
to rural markets. Products intended for rural markets should be:
1. Simple
2. Easy to use
3. Visually identifiable
4. Affordable

4Ps 4As (Challenges)

(Tools)

Product Acceptability
Price Affordability
Place Availability
Promotion Awareness

• Five Levels Of Products:

1. Core Benefit
2. Basic Product
3. Expected Product
4. Augmented Product
5. Potential Product
• Rural Product Categories:
1. FMCG
2. Consumer Durables
3. Agri Products
4. Services

Pricing and Channel Strategy for Rural Markets;

 Price is a major element of the marketing mix.it is an important strategic issue because it
is related to product positioning.
 Pricing is a determinant of the market demand for the product. But before any pricing
decisions are undertaken ,it is important that the factors influencing price are understood.
These factors can be categorized as internal and external
Influencing Factors:
These factors can be categorized as internal and external factors.
 Internal factors : The internal factors affecting price include cost and the company’s
pricing objectives.

 Cost factors
 Promotion as a cost factor
 Credit based transactions increase costs
 Pricing Objectives
 Profit maximization in the long run
 Minimum returns on sales turn over
 Deeper penetration of the market
External factor: This factor includes –

 Customers
 Suppliers
 Competitors
 Legal environment

Pricing strategies:

1) Optional product pricing

2) Captive product pricing
3) Product bundle pricing
4) Penetration pricing
5) Economy pricing
6) Value pricing
7) Coinage pricing
8) Psychological pricing

1) Optional product pricing is the pricing of optional or accessory products along with
the main product like a company selling tractors for a low sticker price but charging
high prices for serving and spare parts
2) Captive product pricing is setting a price for products that must be used along with
the main product , such as blade for a razor and film for a camera.
3) Product bundle pricing is combining several products and offering the bundle at a
reduced price. Companies very commonly use this pricing strategy during periods of
inflation it helps to generate sales and attract customers in a highly competitive
market , it is mostly used in festival.
4) A penetration pricing policy involves setting prices of products relatively low
compared to those of similar products. This pricing policy is appropriate when
demand is elastic. Ex: Anchor white and Ajanta tooth pastes used this pricing to
enter the crowded dental cream market
5) Economy pricing is no-frills low price, the cost of marketing and manufacturing are
kept to a minimum. Regional and local manufacturers usually follow this economy
pricing strategy as they have limited investments to make on building brands and
developing channels. Ex: Nirma & Ghari
 6) Value pricing: When economic recession or increased competition forces a company
to provide value products and services to retain sales. Ex: Godrej No.1 soap placed
their offering containing rose, sandalwood neem and other ingredients at a very
economical price
7) Coinage pricing: Prices are set of a coin value. Coinage price is directly
proportionate to the package size. These packs are small in size and are normally
meant for one time consumption(shampoo sachet)or days consumption(tea bag)or a
week’s consumption(bathing or washing soap).
8) Psychological pricing: The price quality relationship refers to the idea that
consumers tend to equate product quality with the price charged. In the color TV
segment LG at a higher price is considered a better buy than Texla and Jolly brands
particularly in R1 households.
9) Discounts and allowances:
 Cash discounts or bargaining benefits
 Free gift
 Schemes for retailers
 Discriminatory pricing
10) Discriminatory pricing: Price discrimination exists when sales of identical goods or
services are transacted at different prices from the same supplier, different prices are
charged on the basis of different consumer groups, location, product form etc.
discriminatory pricing may take the following norms-
 Consumer segment pricing
 Product form pricing
 Location pricing

Promotion Strategy for Rural Areas;

The promotion measure should be cost effective. Word of mouth is an important message carrier
in the rural areas and ‘opinion leader’ play a significant role in influencing the prospective rural
consumers about accepting or rejecting a product or a brand. Other attributes are explained as
under:

1.Mass Media: Mass media is a powerful medium of communication. The mass media
generally used are:

a. Television
b. Cinema
c. Radio
d. Print Media: handbills, booklets, posters, banners, etc.

2.Personal Selling and Opinion Leaders: In personal selling it is required that the
potential users are identified and awareness is created among them. A highly motivated
 sales person can achieve this. Word of Mouth holds a lot of validity in the rural areas.
This is the reason why opinion leaders are thriving among rural consumers.

3.Special Campaigns: These should be undertaken during harvest & marketing seasons
in rural areas. E.g. Tractors owners meet (tonee) conducted by MRF.

4. Developing Sales Force for Rural Markets:

Job Profile of a Rural Sales Person;

 Increase Sales
 Managing Credit
 Effective Use of Resources
 Developing the Market for Future
 Company’s Image
 Self Development.
Characteristics of a Rural Sale Person;
1. They care about customer's interests.
2. They're confident
3. They're always on
4. They're subtle
5. They're resilient.
6. They're extroverted
7. They're good listeners.
8. They're multitaskers.
9. They provide insight.
10. They're persistent
11. They're honest.
12. They're focused.
13. They're optimistic and upbeat.
14. They have a broad worldview and cultural understanding

Career Prospects in Rural Marketing;

Role of Rural Youth in Brand Promotion: