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UNIT: 1 RURAL MARKETING

Definition:Rural marketing can be defined as a function which manages all
those activities in asserting, stimulating and converting the purchasing power
of rural people into an effective demand for specific products and services
and there by achieving the goals of the organisation.

Rural areas:Rural areas are large and isolated areas of an open country with
low population density a country side refers to rural areas that are open.

Q1. Explain the nature and scope of rural marketing?

Ans: Meaning of Rural marketing:Rural marketing is promotion of a companys
products in the rural markets by using strategies which differ from that of
urban market. The rural market more price sensitive but it has preference
quantity.

Nature of Rural market:1. Large, diverse and scattered market:Rural

marketing in India is large, and scattered into a number of regions. There
may be less number of shops available to market products. 2. Major income
of rural consumers is from agriculture:Rural prosperity is tied with agriculture
prosperity. In the event of crop failure, the incomes of masses is directly
affected. 3. Traditional outlook:Villages develop slowly and have a traditional
outlook. Change is a continuous process but rural people accept change
gradually. This is gradually changing due to literacy especially in the youth
who have begun to change the outlook in the villages. 4. Standard of living
and rising disposable income of the rural customers:It is known that majority
of the rural population lives below poverty line and has low literacy rate, low
savings etc. Today the rural customers spends money to get value and is
aware of the happening around him. 5. Rising literary levels:It is documented
that approximately 45% of rural Indians are literate. Hence awareness has
increase and the formats are well informed about the world around them.
They are also educating themselves on the new technology for a better life
style. 6. Diverse socio economic background:http://www.miteshk.webs.com

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Due to differences in geographical areas and uneven land fertility, rural
people have different socio economic background, which ultimately affects
the rural markets. 7. Infrastructure facilities:The infrastructure facilities like
warehouses, communications systems and financial facilities (or) inadequate
in rural areas physical distribution is a challenge to marketers who has found
innovative ways to market their products.

Scope of marketing:1. Large population:According to 2011 census, rural

population is 72% of total population and it is scattered over a wide range of
geographic area. 2. Rising rural prosperity:Average income level has
unproved due to modern farming practices, contract farming industrialisation,
migration to urban areas etc. 3. Growth in consumption:There is a growth in
purchasing power of rural consumers. The average per capita house hold
expenditure is 382 Rs 4. Change in life style:Life style of rural consumer
changed considerably. 5. Market growth rate higher than urban:The growth
rate of fast moving consumer goods [FMCG] market and durable market is
high in rural areas. The rural market share is more than 50% for products like
cooking oil, hair oil etc. 6. Life cycle advantage:The products which have
attain the maturity stage in urban market is still in growth stage in rural
market. 7. Rural marketing is not expensive:To promote consumer durable
inside a state costs 1 croreRs while in urban areas it will costs in millions.

Q2. What is rural market? Importance of rural marketing ? Ans:Meaning of

rural market:On account of green revolution, the rural areas are consuming a
large quality of industrial and urban manufactured products. In this context a
special marketing strategy namely rural marketing has emerged. But often
rural marketing is confused with agricultural marketing The letter denotes
marketing of produce of rural areas to the urban consumers or industrial
consumers, were as rural marketing involves delivering manufactured or
processed inputs or services to rural producers of consumers.

Importance of rural market:1. Large market:-

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Approximately 75% of Indians population resides around 6,38,365 villages of
India spread over 32,00,000 Sq. kilometre 41% of Indians middle class
resides in rural areas. The Indian rural consumer leaves in 6,00,000 villages
across the country and they account for over 70% of population of the
country. For several product categories, rural markets account for over 60%
of the national demand. 2. Higher purchasing capacity:According to
NCAER[National Council for Applied Economic Research]. As per NCAER
study there are many middle income and above households in the rural
areas. As there are in the urban areas there are almost twice as many lower
middle income households in rural areas as in the urban areas. Because of
this purchasing power of power of rural people is on rise. 3. Market
growth:Hariyali kissan bajar was set up by sri ram consolidated limited to
facilitates scale of agriculture inputs such as fertilizers, pesticides forming
equipment, seeds etc. Shakti- though the state governments and NGOS
involved in microfinance women entrepreneurs in villages are identified to act
as local distribution and sales point for HUL products. 4. ITC:Itcs internet
enabled rural interface to help scale of agricultural outputs is presently
operational in 6 states market is growing at a rate of 3-4% p.a.

Q3. Define size of rural market and discuss? Ans: According to the census of
India village with clear surveyed boundaries not having a
municipality, corporation or board, with density of population not more than
400 Sq.km and with at least 75% of the male working population engaged in
agriculture activities would quality as rural. According to this definition there
are 6,38,000 villages in the country of these 0.5% has a population about
10,000 and 2% have population between 5,000 and 10,000 around 50% has a
population less than 200. Interestingly, the FMCG and consumer durable
companies, any territory that has more than 20,000 &50,000 population
respectively in rural market so for them it is not rural India which is rural.
According to the census of India 2001, there are more than 4000 towns in the
country. It has classified them into 6 categories around 400 class-I to towns
with 1,00,000 and above population, 498 class-II towns with 50,000-99,999
population, 1368 class-III towns with 20,000-50,000 population, 1560 class
IV towns with 10,000-19,999 population It is mainly the class-II & class-III
towns that markets term as rural.

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Demographical details of Indian rural market
About 285 millions live in urban India where as 742 millions reside
in rural areas. The No. of middle income & high income households in rural
India is expected to grow from 46 millions to 59 millions. Size of rural market
is estimated to be 42 millions household and rural market has been going at
5 times the growth of the urban market. More government, rural
development programs. Increase in agricultural productivity leading to
growth of rural disposable income. Lowering of difference between taste of
urban and rural customers.

The Indian rural market with its vast size and demand offers great
opportunity to marketers. Our national is classified in around 450 districts &
approx. 6, 30,000 village which can be stored in different parameters such as
literacy level, accessibility income levels, distance from nearest town etc. The
rural market accounts for half of the total market for Tv sets, fans pressure
cookers, bicycles, washing soap, tea salt & tooth powder, what is more, the
rural market for FMCG product is growing much faster than the urban market.

Q4. Explain the distinction between rural market & urban market? Ans:
Definition:Rural marketing is similar as simply marketing. Rural marketing
differs only in terms of buyers here, target market consists of customers
living in rural areas.Thus rural marketing is application of marketing
fundamentals {concepts, principles, theories etc} to rural marketers. 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
organisational objectives.

Differences between rural marketing & urban marketing:Although rural

marketing offer immense potential marketers used to recognise the fact that
there are considerable differences in many aspects including the nature,
characteristics, buying patterns & behaviours of rural consumer when
compared with their urban counter parts. While the urban economy thrives
mainly on secondary and territory activities such as manufacturing &service,
the rural economy is driven mainly by primary activities such as agriculture,
fishing & forestry. The consumer demand and consumption patterns also

differ across rural and urban areas, in many products rural consumption now
accounts for a large share then urban. In in washing soaps the rural share is
over 60%. In popular both soaps it is more than 50% and in batteries it is
more than 56% similarly is the case with packed tea & hair oils
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5 Aspect Philosophy Demand Competition Urban

Marketing &social concepts & relationship market High
Among units in organized sector Concentrated High High Planned &even
High level Faster High Known Easy Easy grasped Good Yes
Whole seller, retailers, supermarkets, speciality stores, authorised store
rooms Good High Rural Marketing & social concepts development
marketing Low Among unorganised sector
Consumers: Location Literacy Income Expenditure Needs Innovations
Product awareness Concept Positioning Usage method Quality preference
Price sensitive Distribution channels

Widely spread Low Low Seasonal &variations Low level Slow Low
Less known Difficult Difficult to grasp Moderate Very much in rural
Village shops

Transport facility Product availability

Moderate Limited

Advertising

Print, audio, visual media, outdoors, exhibitions etc

T.v, radio, print media to some extent

Personal selling Sales promotion Publicity

Doortodoor Contest, gifts, price discount Good opportunity

Occasionally Gifts & price discount Less opportunity

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Q5. What are the problems of rural marketing? Ans: The problems of rural
marketing are continuing in spite of efforts to improve in a 9th
five year plan. The position is improving but slowly the rural marketer has
many challenges. But the vast & expanding markets call for good marketing
strangers to create win situations to all parties in the chain of rural
marketing. The problems of rural marketing are as follows:
Under developed people Under developed market Improper
communication facilities Many languages Vastness & uneven spread Low per
capita income Poor infrastructure facilities Seasonal demand Less distribution
channel

1. Under developed people:Rural society is found by tradition, old customs,

practices etc. The impact of modern science & technology has made very less
impact of the old beliefs are still continuing. 2. Under developed market:Rural
markets are not developing because of inadequate banking & credit facilities.
Rural market needs banks to enable remittance, to transact on credit basis
and to obtained credit support from the bank. At present every 48th village in
India only has bank. 3. Poor or improper communication facilities:Most
villages even today largely depends on telegrams and phones for their
communication needs print media and visual media[Television cinema] etc
reaches only about 20% of rural Indians. 4. Many languages:India is a country
of many languages. Language becomes a barrier in effective communication
in the marketing efforts. The languages vary from state to state, place to
place, district to district there are now 18 schedule national languages. 5.
Vastness & unevenly spread:India is a vast time & major approximately
3214km from North to South &2933km from East to West. Rural market
consists of approximately 75 cores rural consumers spread across
approximately 6,38,365 villages. Despite the urban migration, the rural areas
continue to be the place of living for a vast majority Indians.

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6. Low per capital income:Most farmers has small lands and many villages are
brought prone, this result in low per capita income. Low per capita
incomeResults in low consumption pattern as compared to the urban
population. The marketers faces challenges in rural marketing to decide
about quantities, frequency of distributions, package size etc due to the low
per capita income of the rural people. 7. Poor infrastructure
facilities:Infrastructural facilities like roads, ware houses, powers etc are
inadequate in rural areas. Infrastructural cost are very high and impact
adversely in the rural market activities. 8. Seasonal demand:Rural economic
is seasonal, rural people have two seasonal namely khariff&rabi. Villages
have money mostly in this seasons. As village income are seasonal demands
are also.

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UNIT: 2 RURAL MARKETING ENVIRONMENT
Q1. Discuss about the rural marketing environment? Ans:- An environment is
that which surrounds an organization. It was sum total of external factors and
made up of tangible and intangible factors /both controllable and
uncontrollable. Rural marketing is basically focused marketing activity of a
organization. The environment out lines threats and opportunities of the
market. The Rural marketing environment is complex and is changing
continuously. The marketing organization should foresee and adopt strategies
to change in requirements in the market. One which doesnt change perishes.
An adaptive organization can stand competition or have a modest growth. An
organization which makes its effective marketing plans and its own strategies
or a creative one will prosper and creates opportunities in the change in
environment. Rural marketing environment changes will be in the area of a)
b) c) d) e) f) Social changes Economic changes Ethical changes Political
changes Physical changes Technological changes

SOCIAL Sociological factors

Psychological Factors Price

ECONOMIC
Competition

Product & Packaging

Anthropological Factors Consumer Marketing Organisation

Price

Promotion

Technological Place

Ethical

Physical

Political

Figure 1THE MARKETING ENVIRONMENT

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1.SOCIAL CHANGES:1) Sociological factor:-

The social factor consists of three factors,

Consumer society or the community is important. The consumer life style is

influenced by the social setup. The social constitution and changes influence
customer habits, taste, and lifestyles. 2) Anthropological factors:The
reasonable cultures and subcultures and living patterns influence advertising
sales promotion, selling strategies and packing. The consumers in east India
have different taste.

3) Psychological factors:Consumer behavior attitudes personality and mental

make ups are unique. The study of behavior is vital to evolve marketing mix.
2. Economic factors:1) Competition:A good and healthy competition brings in
good and overall improvement in economic activities. It also brings good
quality, good quantity and price. Consumers:The consumer today is quite
knowledgeable and choosy. His progress and well being should be the aim of
any economic activity. Price:Pricing is a delicate issue where it should be
market friendly, not too high or to little. The marketers has to keep in mind to
get descent returns on investment and effects of producers and marketers.
Ethical forces:Business minus ethical values brings degeneration. In the long
run it brings problems. No standardization, exploitation and falsification are
main ethical values in such organization. Political forces:The government
polices towards trade and commerce, internal taxation and preferential
treatments have a influence on the marketing strategies. The marketing
environment has to meet the political frame work in which a government is
made to work. Physical forces:The infrastructure availability for movement
and storage of goods play an important role in the physical distribution of
goods and reaching the consumers. Efficient and cheaper logistics helps the
market in a big way. Technological force:The fast changing science and
technology gives a cutting edge to the marketing of products. The changes
warrant changes in marketing , inputs and
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2)

3)

4)

5)

6)

7)

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strategies. Faster and efficient communication and transport systems have
speeded up marketer. The capital is made to work faster and harder .So in
the case with the marketer, He has to use these new marketing tools and
facilities in designing and implementing his marketing strategies which are
adaptive to the change in environment and ensure success.

Q2) what are the factors influencing rural consumer behavior? ANS:- The
various factors that affect buying behaviour of in rural India are: 1)
Environment of the consumer:- the environment or the surroundings in which
the consumer leaves has a very strong influence on the buyer behavior.
E.g.:electrification, water supply effects demand for durables. 2) Geographic
influence:- the geographic location in which the rural consumer is located
also speaks about the thought process of the consumer. For instance, villages
in south India accept technology quicker than in other parts of india.Thus,
HMT sells more winding watches in the north while they sell more quartz
watches in the south.

3) Influence of occupation:- The land owners and service can buy more of
category2 & category3 durables than agricultural laborers. 4) Place of
purchase:Companys need to access the influence of retailer on both
consumers at village shops.

5) Creative use of product:- The study of product and provides indicators to

the company on the need for education and also for new product ideas. E.g.:godrej hair dye being used as a pain to the color horns of ox. Washing
machine being used for making lassie. 6) Brand preference and loyalty:- the
people in rural market will not give preference for brand products but they
give importance for loyalty of the product. 80% of the sale is branded items
in 16 product category. Q3) what are the factors influencing Rural marketing
operations? ANS: - All business operations revolve around understanding
customer needs, desires likes and preference and offering products and
services that will give desired satisfaction to the consumers. FACTORS
INFLUENCING OR CONTRIBUTING CONSUMER BEHAVIOUR:a) Environmental b)
Cultural
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c) Social d) Personal e) Psychological a) Environmental :I. Economic
factors:The agricultural and rural development has enabled our country to
achieve self sufficiency in food production and we are now exporting a variety
of agricultural commodities to foreign countries. Favorable monsoons during
the last 10 years have let to increase in crop yields and rural income. In
addition, diversification of a agriculture, development of village industries,
migration of rural people into cities, remittance of money, family members
settled abroad have increased income level and buying power of villagers. II.
Political factors:The government have taken initiative for economic
development of rural areas and have invested heavily in agriculture,
irrigation, electricity, khadi and village industries and infra structure facilities
such as roads, communication, hospitals, school, and banking. The initiatives
certainly let to rural prosperity and opportunities for the marketers. III.
Technological development:The rapid expansion of telecommunication
facilities and mobile phone has provided opportunities for rural people to
keep in touch with men and markets. Development of TV networks and
reasonable channels has enabled the marketers to pass on message about
product and services to rural people. In rural areas especially in large
villagers and villagers near to towns and cities, children and youth have
accused to information such as job opportunities, national news, weather
conditions, bank loans etc..IT and internet are sure to spread up exchange of
information in rural india though at a slower rate compare to urban market
Legal :The government has come out with legislative measures to protect the
interest of consumers some of the important ones are:-

IV.

a.

Money lenders:The money lenders advance long term loans against security
of land over period of time manipulate the records and seize the land. The
government protects the assets of farmers from money lenders.

b.

Consumer protection act:Consumer protection act provides protecting the

rights and interest of consumers and we have a quasi judicial machinery
operating at 3 levels i.e. district forum, state and national forum. V. Cultural
factors:-

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a) Culture and sub culture :Culture represents an overall heritage a distinctive
form of environmental adaption by whole society of people culture is a
system of shared beliefs and customs that influence the behavior of
consumers. Traditional life, traditional occupation, traditional beliefs are the
features of rural life. Culture provides people with a sense of identity and an
acceptable behavior with in a society. Technological advances education and
travel have considerable influence on culture and change the rural life style.
Culture offers direction and guidance to the members of a society in all facets
of life. It provides methods of satisfying physiological, personal and social
needs. b) Sub culture:It exists within the dominant culture, with its own set of
values, beliefs and attitudes and behavior pattern. The pattern of behavior
would vary between north and south even in rural areas.

c) Social class:Consumer behavior is determine by social class to which they

belong and is determine by a combination of factors like education,
occupation, income and assets. It is seen that over a period of 10years there
has been considerable reduction in the per culture of destitute and increase
in other social classes in rural areas. This is a positive indication of the
growing rural market in our country. VI. Social factors:a) Family:Family is a
group of persons related by blood, marriage or adoption who reside together.
It is basic social group and consists of individual known as members. The 3rd
generation family is very common in rural areas. The head of the family
provides economic security to family members. The members of family play
different roles such as influencer decider and purchaser is the buying
process. Personal values, attitudes and buying habits have been shaped by
family influences. Family life cycle also influences. b) Reference group:It
includes family and friends with whom an individual interacts on a face to
face basis. Word of mouth communication is a process by which the
messages are passed within group from one member to another member. The
consumer develops positive opinion towards a product or service based on
admiration (cricket players), aspiration (film stars) or empathy. The consumer
thinks that if he uses it, it must be good if use it, I will be like him.
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VII. a)

b)

c)

d)

e)

VIII. a)

Personal factors:Age and life cycle:Life cycle of a person began with child
birth, move to infancy, teenage, adult, middle age, old, and then ends with
death. Under each stage buying behavior is different. Occupation:About 500
millions of population depends upon agriculture for a living. Income from
agriculture is a seasonal and therefore demand particularly consumer
durables is high during post harvested period and festivals. Many farmers
have diversified into fish culture and small scale industries in order to reduce
their dependence on forming and to ensure regular income. This leads to
increase the demand for consumer durables. Economic circumstance:-Rural
income is seasonal compare to an urban consumer who receives regular
income regarding saving habits, traditionally rural people prefer to invest in
jewelry and fixed deposits in banks and posts offices. A farmer would like to
invest these funds for development of agriculture and buying lands. Another
interesting observation is that for the same income level, a rural consumer
has relatively high disposable income. Life style:Life style studies how people
spend their money and time in day to day activities. The life style dimensions
are activities and demographic features such as age, gender, occupation,
education, and income. Rural consumes prefer to spend, spare time, in
activities. Such as visiting meals i.e. commodity and religious fairs,
companys can use such meeting places for product promotion. Personality
and self concept:Personality is a unique combination of different individual

characteristics. We find that many individuals are similar in terms of one or

more characteristics, but they are not alike in all characteristics. Personality is
a combination of factors such as sociability, self confidence and dominance.
Personality influences in many ways. Psychological factors:Motivation:When a
buyer purchases a product or service, he has a reason. Motive is a strong
felling, desire or emotion that makes the buyer to take decision to buy every
human activity is a result of motivation. Each person is motivated by his
needs and satisfaction of one need shows that rural consumers are satisfied
by meeting the 2needs i.e. physical and security need, where as urban
consumers would like to satisfy social and needs .
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Motives can be also classified as psychological and psychogenic motives. In
rural areas there exits large population consisting of agricultural laborer,
small and marginal farmers, petty traders who have very limited income and
their needs are very basic i.e. food clothing and shelter. b) Perception:All
consumers are not alike; they see the world in their own special ways. For
instance, all the members of the family have viewed a particular
advertisement in different ways. This is because needs, wants, values
attitudes and personal experience vary from person to person. Similarly,
consumers perception means what he thinks about the product, producer or
the brand. Consumers action, buying habits, consumption habits are based
on perception and therefore the motor should have good understanding of
perception of consumers. c) Learning:It is a process of acquiring knowledge
about products, product benefits, method of usage and maintenance and also
disposal of the products considering low literacy, low awareness, the
marketers have to educate the consumers through rural- specific promotion
media and methods. d) Belies and attitudes:In general attitude is a state of
mind or feeling. Attitude indicates our feeling about a product, service, brand
and shop whether we are positively or negatively disposed towards the object
or class of objects. Consumer attitudes or composed of beliefs, feelings and
behavior intentions towards a product, brand or store. Belief may be positive,
negative or neutral. The belief that consumer hold need not be correct.
Consumers also hold certain feelings towards product and these feelings are
based on the beliefs. Examples:1) Many rural consumers belief that cool
drinks are harmful and they prefer lime juice, butter milk etc.. Change of
attitudes and beliefs is very low in the case of rural consumers. Once he is
convinced, he will continue to use the product and become a loyal consumer.
2) Majority of lower and middle income group continue to use lifeboy and
soap and about 70% of the sales of the life boy is in rural and semi urban
areas.

UNIT 3, 4 AND 5 COMING SOON

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RURAL MARKET SEGMENTATION
Market segmentation means dividing heterogeneous market into
homogeneous sub units into homogenous sub units here heterogeneous
means consider the market as a whole and refers mass marketing.
Homogeneous sub units means which have similar tastes and preferences but
not the same tastes and preferences. Rural market segmentation is mainly
based on demographic factors. The division is based on the premises the
different people have different preferences. The following are the basic
market preferences: Homogeneous preferences where consumers have
roughly the same preferences. Diffused preferences where consumers are
scattered throughout the market by their preferences. Clustered
preferences were consumers are found in distinct preference groups.

Degree of segmentation:The segmentation is considered as a process with

two polar points from zero to complete, four distinct segment approaches are
identifiable as follows o.s Type Zero Mass marketing Segment marketing all
Identitys people as a differing group Niche marketing Serves very few groups
of people Micro marketing Focus individuals are very groups on small

Approach Considers people as a bunch

Mass marketing:In the early period of the 20th century many companies
practiced mass production and mass distribution as economics evolved as
economy evolved and societies became civilised, consumer choice and
requirements came into focus until now the rural market was considered as
homogeneous mass as worse the Indian market till some 20 years ago. Some
companies depend on mass marketing while many do not.

Segment marketing:The principle of segment marketing rests on the

realisation that buyers differ in their needs, wants, demands and behaviours.
The need for segment marketing arises when Consumers have become
more diverse, sophistically and choosy. Competition has become tuff.

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Niche marketing:A niche is very small group with a different set of traits, who
seek a special combination of benefits. Niche marketing identifies special sub
groups within larger segments and offers different products and services.

Micro marketing:Micro marketing involves tailoring products and programs to

suet the taste of specific locations and individuals. It includes local marketing
and individual marketing. Local marketing:- It involves in the programs
to suit the taste of specific locations and wants of local groups on a
geographical bases. Individual marketing:- Individual market is customized
marketing or one to one marketing. Tailoring unitshotels, tourist operators
provide individualised services for example building contractors builds houses
of flats to specific requirements of customers.

Types of rural market segmentation:Demographic factors:Demographic

factors are taken into detailed consideration for market segmentation of
consumer goods and fast moving consumer goods (FMCG). In case of rural
marketing i.e. to sell outside goods in rural areas, demography came into the
picture. However the categories are much reduced. Some of the
segmentations are as below.

Occupational segmentation(or)sociological segmentation:This segmentation

is based on economy vice categorisation. This reflects the purchasing power
of a farmer and therefore the purchase power of his family they are
Artisans, farm labourers Small farmers Tenant farmers Medium level
farmers Large farmers Very large farmers, zamindars

Artisans and others

This covers carpenters, blacksmiths, handy-crafts, people are unemployed.

Tenant farmers
Working on rented land to share the crops with owners of the land.

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Small farmers
Who own small farms are jointly owned farms for getting food.

Medium level farmers

Who own small farms are jointly owned farms for getting food.

Large farmers(or)rich farmers

Who have large lands and all local leaders they spend types in urban areas
and doing other occupation.

Very large farmers, land lords(or)zamindars

Zamindars, rich money lenders and business men who owned big size lands
and maintain large size farm labour. Normally they spend time in nearby
urban areas with politicians. From the above the small farmers and tenant
farmers will struggle for basic needs but the medium level farmers struggle
for comforts. But the large farmers will not struggle for basic needs and
comforts. So the marketers target only large farmers and very large farmers
for segmenting the market.

Thomson rural market index(TRMI)segmentation

Hindustan Thomson associates ltd developed a guide to market segmentation
in 1972 and revised it in 1986. They collected data in 335 districts based on
26 variables finally they arrived on 10 selected variables having strong corelation to rural market potential.

Agricultural labourers Gross cropped area Gross irrigated area Area under
non-food crops pump sets.

Fertilisers consumption
Tractors Rural credit Rural deposits & village electrified. Based on these
factors, the districts are classified as A,B,C,D&E. Which are in order of high
potential market to low potential market.

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LINQUEST
This method is software developed by initiative media on data along the
following parameters Demographic Agriculture Income. Literacy
& Civic amends.

As per the product to be launched, the marketer would be interested in

certain parameters like literacy levels, income levels, bank deposits,
accessibility (rail, road, and schools etc). in the software the marketer can
give weighted average to different factors for Eg:- To launch new audio
cassette recorders, parameters could be villages above 1000 population and
monthly income 2000 and distance from nearest towns within 30kms.

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BRANDING:Branding is a practise of giving specified name the specified name
creates individuality in the product and it can be easily recognised from rival
product the term brand is broadly applied to all identifying such as trade
names, trademarks trade symbols etc e.g.:- pepsi, lifeboy are brand names
it is recognisable by sight but hes not normally pronounceable. The rural
consumer likes to stick to brands that give value for money

Importance of branding
1. Branded product can be easily recognised by the customer in the retail
shop it offers protection to the consumer as it identifies the firm behind the
product. 2. Branding enables the firm assured control over market. It creates
an exclusive market for the product. 3. If a firm has one or more lines of
branded goods it can had a new item to its list easily & the new item can
enjoy all the advantages of branding immediately.

Characteristic of branding Attributes &benefits:Brands of a product plays an

important role to attract the rural customers because they mostly believe in
the brands, just by seeing branded products they will purchase assuming that
they will be satisfied by product.

Values :By seeing the brand the customers will consider the performance of
the product and the safety of the product some customers felt that prestige
while purchasing the branded products.

Culture:By seeing the brand the customer assumes the product is efficient
and they also assumes high quality.

Personality:The person who is using that product

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Types of brands 1. Individual brand name
Each product has a special and unique brand name the manufacturer has to
promote each individual brand in the market separately this creates a
practical difficulty in promotion otherwise it is best marketing strategy eg:surf, cinthol, chik shampoo etc.

2. Family brand name

Family name is limited to one line of a product i.e. products which complete
same cycles family brand name can help combined advertising and sales
promotion however if one member of the family brand is rejected by the
consumers or customers the prestige of all under the family brand may be
adversely affected. The manufacturers have to take extraordinary care to
guard against the danger family brand name enables creation of strong shelf.
It helps to secure quick popularity it is preferable to have separate brands for
each product for eg:-amul for milk products, pounds for cosmetics etc

3. Umbrella brand name

We may all products such as chemicals, engineering goods, automobiles etc.
Manufactured by the Tata concerns will have the Tata as one umbrella brand
such a device will also obtain low promotion cost and minimise however
experience in any of the line of products, a solitary failure may be very
dangerous to the rest of the products sold by a particular business house
under umbrella brand.

4. Combination device
Data house is using combination device each product has individual name to
indicate the business house producing the product eg:- Tata Indica, side by
side with the product image we have the image of the organisation also many
companies use this device profitably.

5. Private or middlemans brand

Branding can be done by manufacturers or distributors such as wholesalers,

large retailers. In India this practise is popular in the wooden, sport goods and
searches other industries it helps small manufacturers who have to rely on
the middlemen for marketing. It is also used by big manufacturers the
manufacturer merely produce goods as per specifications and requirements
of distributors and he need not worry about marketing. Manufacturers make
both national and private or middleman brands. Consumers of the private or
dealers brand.

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21
Some of the brand names that have created lasting impact on rural
consumers are as follows:
Every day batteries: Battery with cat as a symbol Lifeboy
Asian paints mascot Dabur chawan prakash Parle Parachute Amul
Zandubalm Tata salt Nirma Textile: Chermas, Kumar shirts.

Q. Explain the brand awareness in rural marketing?

Ans: Rural product development:
The rural market is a fast
growing one and has a huge population with a great level of
disposable income to encase this; products have to be specifically
developed to meet the creeds of rural market sometimes existing
products might have to be modified to suit these markets too accordingly.
Rural product development has a
strong edifice on a great
deal of research like feasibility, studies, rural aspiration and soon. This paves
way for a great deal of infra structure and expertise in this area.

Rural branding: Rural branding bears quit different from urban branding.
The first step
towards rural branding is to search and gain insight into the working of rural
markets. Based on this communication campaigns products have to be
developed with a lot of rural sensitivity. Rural market research: rural
market behave most differently from urban markets. While many
marketers have tried to market their products in rural areas. Just a
hand full of sum only has succeeded. A strong insight into rural
consumer behaviour and sensitivity to their values and beliefs is
essential to upgrade the rural market research not just gathering data
but analyzing them and linking the findings to promoting their
products. Rural communication campaigns communication for rural
markets calls for a different kind of outlook. There must be a strong
ascent on helping the target relate to message. The entire
communication and media strategy has to device a system based on
research findings. These have to be developed in the regional
languages and set in the local culture for easier acceptance and reach
to the customers. Besides mass and outdoor media rural

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22
extravaganza (cultures) like temple, festival, melas, and other events
where the villagers come together can be used for promotions.

Rural events: In the rural context, one of the best ways to capture the atte
ntion of the
audience is through event management. Since rural areas have limited
venues for
entertainment, conducting an event in rural areas can bring a good response.
.

Rural direct marketing campaigns: Direct marketing is one of the

most powerful
ways to meet the targets and build product awareness as well as
promotion. The success of any direct marketing campaigns depends on
the field workers and their sensitivity and
emotional connectivity to rural markets.

Data base creation and management: Marketing branding and

promotional
activities in rural context can be highly effective and thereafter have to creat
e a database of prospects. This data is essential for marketers to reach
their target accurately and helps
marketing plan and communication strategies.

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RURAL MARKET SEGMENTATION
Market segmentation means dividing heterogeneous market into
homogeneous sub units into homogenous sub units here heterogeneous
means consider the market as a whole and refers mass marketing.
Homogeneous sub units means which have similar tastes and preferences but
not the same tastes and preferences. Rural market segmentation is mainly
based on demographic factors. The division is based on the premises the
different people have different preferences. The following are the basic
market preferences:Homogeneous preferences where consumers have
roughly the same preferences. Diffused preferences where consumers are
scattered throughout the market by their preferences. Clustered preferences
were consumers are found in distinct preference groups.

Degree of segmentation:The segmentation is considered as a process with

two polar points from zero to complete, four distinct segment approaches are
identifiable as follows o.s Type Zero Mass marketing Segment marketing all
Identitys people as a differing group Niche marketing Serves very few groups
of people Micro marketing Focus individuals are very groups on small

Approach Considers people as a bunch

Mass marketing:In the early period of the 20th century many companies
practiced mass production and mass distribution as economics evolved as
economy evolved and societies became civilised, consumer choice and
requirements came into focus until now the rural market was considered as
homogeneous mass as worse the Indian market till some 20 years ago. Some
companies depend on mass marketing while many do not.

Segment marketing:The principle of segment marketing rests on the

realisation that buyers differ in their needs, wants, demands and behaviours.
The need for segment marketing arises when Consumers have become more
diverse, sophistically and choosy. Competition has become tuff.

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Niche marketing:A niche is very small group with a different set of traits, who
seek a special combination of benefits. Niche marketing identifies special sub
groups within larger segments and offers different products and services.

Micro marketing:Micro marketing involves tailoring products and programs to

suet the taste of specific locations and individuals. It includes local marketing
and individual marketing. Local marketing:- It involves in the programs to suit
the taste of specific locations and wants of local groups on a geographical
bases. Individual marketing:- Individual market is customized marketing or
one to one marketing. Tailoring unitshotels, tourist operators provide
individualised services for example building contractors builds houses of flats
to specific requirements of customers.

Types of rural market segmentation:Demographic factors:Demographic

factors are taken into detailed consideration for market segmentation of
consumer goods and fast moving consumer goods (FMCG). In case of rural
marketing i.e. to sell outside goods in rural areas, demography came into the
picture. However the categories are much reduced. Some of the
segmentations are as below.

Occupational segmentation(or)sociological segmentation:This segmentation

is based on economy vice categorisation. This reflects the purchasing power
of a farmer and therefore the purchase power of his family they are Artisans,
farm labourers Small farmers Tenant farmers Medium level farmers Large
farmers Very large farmers, zamindars

Artisans and others

This covers carpenters, blacksmiths, handy-crafts, people are unemployed.

Tenant farmers
Working on rented land to share the crops with owners of the land.
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Small farmers
Who own small farms are jointly owned farms for getting food.

Medium level farmers

Who own small farms are jointly owned farms for getting food.

Large farmers(or)rich farmers

Who have large lands and all local leaders they spend types in urban areas
and doing other occupation.

Very large farmers, land lords(or)zamindars

Zamindars, rich money lenders and business men who owned big size lands
and maintain large size farm labour. Normally they spend time in nearby
urban areas with politicians. From the above the small farmers and tenant
farmers will struggle for basic needs but the medium level farmers struggle
for comforts. But the large farmers will not struggle for basic needs and
comforts. So the marketers target only large farmers and very large farmers
for segmenting the market.

Thomson rural market index(TRMI)segmentation

Hindustan Thomson associates ltd developed a guide to market segmentation
in 1972 and revised it in 1986. They collected data in 335 districts based on
26 variables finally they arrived on 10 selected variables having strong corelation to rural market potential.

Agricultural labourers Gross cropped area Gross irrigated area Area under
non-food crops pump sets.

Fertilisers consumption

Tractors Rural credit Rural deposits & village electrified. Based on these
factors, the districts are classified as A,B,C,D&E. Which are in order of high
potential market to low potential market.
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26
LINQUEST
This method is software developed by initiative media on data along the
following parameters Demographic Agriculture Income. Literacy & Civic
amends. As per the product to be launched, the marketer would be interested
in certain parameters like literacy levels, income levels, bank deposits,
accessibility (rail, road, and schools etc). in the software the marketer can
give weighted average to different factors for Eg:- To launch new audio
cassette recorders, parameters could be villages above 1000 population and
monthly income 2000 and distance from nearest towns within 30kms.

BRANDING:Branding is a practise of giving specified name the specified name

creates individuality in the product and it can be easily recognised from rival
product the term brand is broadly applied to all identifying such as trade
names, trademarks trade symbols etc e.g.:- pepsi, lifeboy are brand names
it is recognisable by sight but hes not normally pronounceable. The rural
consumer likes to stick to brands that give value for money

Importance of branding
1. Branded product can be easily recognised by the customer in the retail
shop it offers protection to the consumer as it identifies the firm behind the
product. 2. Branding enables the firm assured control over market. It creates
an exclusive market for the product. 3. If a firm has one or more lines of
branded goods it can had a new item to its list easily & the new item can
enjoy all the advantages of branding immediately.

Characteristic of branding Attributes &benefits:Brands of a product plays an

important role to attract the rural customers because they mostly believe in
the brands, just by seeing branded products they will purchase assuming that
they will be satisfied by product.

Values :-

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By seeing the brand the customers will consider the performance of the
product and the safety of the product some customers felt that prestige while
purchasing the branded products.

Culture:By seeing the brand the customer assumes the product is efficient
and they also assumes high quality.

Personality:The person who is using that product

Types of brands 1. Individual brand name

Each product has a special and unique brand name the manufacturer has to
promote each individual brand in the market separately this creates a
practical difficulty in promotion otherwise it is best marketing strategy eg:surf, cinthol, chik shampoo etc.

2. Family brand name

Family name is limited to one line of a product i.e. products which complete
same cycles family brand name can help combined advertising and sales
promotion however if one member of the family brand is rejected by the
consumers or customers the prestige of all under the family brand may be
adversely affected. The manufacturers have to take extraordinary care to
guard against the danger family brand name enables creation of strong shelf.
It helps to secure quick popularity it is preferable to have separate brands for
each product for eg:-amul for milk products, pounds for cosmetics etc

3. Umbrella brand name

We may all products such as chemicals, engineering goods, automobiles etc.
Manufactured by the Tata concerns will have the Tata as one umbrella brand
such a device will also obtain low promotion cost and minimise however
experience in any of the line of products, a solitary failure may be very
dangerous to the rest of the products sold by a particular business house
under umbrella brand.

4. Combination device
Data house is using combination device each product has individual name to
indicate the business house producing the product eg:- Tata Indica, side by
side with the product image we have the image of the organisation also many
companies use this device profitably.

5. Private or middlemans brand

Branding can be done by manufacturers or distributors such as wholesalers,
large retailers. In India this practise is popular in the wooden, sport goods and
searches other industries it helps small manufacturers who have to rely on
the middlemen for
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28
marketing. It is also used by big manufacturers the manufacturer merely
produce goods as per specifications and requirements of distributors and he
need not worry about marketing. Manufacturers make both national and
private or middleman brands. Consumers of the private or dealers brand. `1
Some of the brand names that have created lasting impact on rural
consumers are as follows:Every day batteries:- Battery with cat as a symbol
Lifeboy Asian paints mascot Dabur chawan prakash Parle Parachute Amul
Zandubalm Tata salt Nirma Textile:- Chermas, Kumar shirts.

Q. Explain the brand awareness in rural marketing? Ans: Rural product

development:The rural market is a fast growing one and has a huge
population with a great level of disposable income to encase this; products
have to be specifically developed to meet the creeds of rural market
sometimes existing products might have to be modified to suit these markets
too accordingly. Rural product development has a strong edifice on a great
deal of research like feasibility, studies, rural aspiration and soon. This paves
way for a great deal of infra structure and expertise in this area.

Rural branding:- Rural branding bears quit different from urban branding. The
first step towards rural branding is to search and gain insight into the working
of rural markets. Based on this communication campaigns products have to
be developed with a lot of rural sensitivity. Rural market research:- rural
market behave most differently from urban markets. While many marketers
have tried to market their products in rural areas. Just a hand full of sum only
has succeeded. A strong insight into rural consumer behaviour and sensitivity
to their values and beliefs is essential to upgrade the rural market research
not just gathering data but analyzing them and linking the findings to
promoting their products. Rural communication campaigns communication
for rural markets calls for a different kind of outlook. There must be a strong
ascent on
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29
helping the target relate to message. The entire communication and media
strategy has to device a system based on research findings. These have to be
developed in the regional languages and set in the local culture for easier
acceptance and reach to the customers. Besides mass and outdoor media
rural extravaganza (cultures) like temple, festival, melas, and other events
where the villagers come together can be used for promotions.

Rural events: - In the rural context, one of the best ways to capture the
attention
of the audience is through event management. Since rural areas have limited
venues for entertainment, conducting an event in rural areas can bring a
good response..

Rural direct marketing campaigns: - Direct marketing is one of the most

powerful ways to meet the targets and build product awareness as well as
promotion. The success of any direct marketing campaigns depends on the
field workers and their sensitivity and emotional connectivity to rural
markets.

Data base creation and management:- Marketing branding and promotional

activities in rural context can be highly effective and thereafter have to
create a database of prospects. This data is essential for marketers to reach
their target accurately and helps marketing plan and communication
strategies.

Q) What is meant by Product? And explain it with different strategies in rural

market?
Ans: Product is the most tangible and important dingle component of the
marketing program. Without product, there is nothing to distribute promote
and to price. Product is a vehicle by which a company provides consumer
satisfaction. A product is a bundle of benefits assembled in an identifiable
form. In simple terms, products are anything that satisfies human wants. The
product mix includes product quantity, features, benefits, design, style,

colors, brand packaging, labeling, services and warranties.

Product market strategies:Markets have the following alternations to increase

market share and profits Existing product Existing markets New markets
Market penetration Market development New product Product development
differentiation Diversification (or) product

It involves expansion of sales of existing products in existing markets by

selling more to present customers or gaining new customers in existing
market. The firm can market its present products to existing markets. This is
done through more aggressive marketing mix.
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Market penetration:-

30
In Market development a present product is introduced to a new market or a
segment . Market development is the creation of new market by discovering
new application for existing goods. This is another alternative to expand
market opportunity, prolong product life cycles, profitability and survival. Ex:many companies are extending their activities to rural market to increase
sales volume of products like mineral water, chocolate, mobile phones etc.
Product development occurs when a firm introduces new products to a
market in which it is well established. Product development is the introduction
of new products in present market. Ex:- New syntactic fibers are known for
textile products. The firm may decide to create new products for existing
market. Diversification occurs when a firm seeks to enter a new market with
completely new product. The innovations are introduced for the first time in
the new markets. The strategy is risky but the innovator can have speculator
results.

Market development:-

Product development:-

Diversification:-

Product strategies in rural market:markets are given below

product strategies used by companys in rural

most of the rural consumers believe that heavier the item, higher the power
and durability, they prefer tough and long lasting product. EX:- bullet motor
cycle continuous to be popular in villages; royal Enfield sells about 65% of
two wheelers in semi urban and rural areas; ambassador cars continuous to
be popular in rural areas. The companys can come out with new Designing
products:products or promote existing products to suit field conditions in rural
areas. EX: L.G electronics came out with a unique product for rural market. It
launched sampoorna Indias first T.V with a Devanagari script on screen

display. Voltas has introduced a refrigerator for rural areas direct cold
technology keeps the refrigerator cold for several hours in case of long power
cut. Nokias basic model is dust resistant and has a mini torch light for
using in rural areas. Small unit packing:It has been used for money consumer
products . Small units packing provide an opportunity for the consumers to
try the product and help the company to reach consumers like daily wage
earners.

Sturdy products:-

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Ponds has gain market share over the past few years, focusing on rural
market ant it has introduced 20grams talcum powder. Cavin kare studied
rural buyer behavior and introduced chik shampoo in small sachet of 4ml at a
low price of 50ps. Rasnna is now available in sachet pack priced at 1rupee
each and one sachet will make 2 glasses of soft drink Godrej Sara lee has
single coiled sachet of goodnight coil for rural products Utility products:The
rural people are concerned with the utility of the items rather than
appearance or show EX:

Philips has introduced free power radio RL117 priced at 995/- for the
first time in India. The radio requires no external batterys or electricity for
operation.

HMT watches are popular for utility value.

Q) What is meant by pricing and explain factors influencing pricing?

Sol:Economists defines price as the exchange value of a product or service
always expressed in terms of money. In simple terms price is the amount
charged for the product or service. To the buyer price is a package of
expectations and satisfaction. To the seller price is a source of revenue and
main determinant of profit.

Factors influencing pricing decisions:1.Objectives:- many companies have

established marketing goals or objectives
such as growth in sales, profits, market share and pricing plays a major role in
achieving the objectives.

2.cost of production:-The most decisive factor in

pricing is the cost of production. In the past, fixing of price was a sample
affair: just add up all the costs incurred and divide the final figure by the
number of units produced. The main defect with this approach is that it

disregards the external factors, particularly demand and the value placed on
goods by the ultimate consumer. Today on account of the various lines of
production as well as distributing, the overhead costs finding the cost of
production are not simple.

3)Demand:- in the consumer oriented marketing , the consumers influence

the
price. Every product has some utility for the buyer. It gives the buyer service,
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satisfaction, pleasure; the consumer would continue to buy the product.
Higher the demand for a product, lesser the need for giving additional
discounts, credit, etc.. To the distributors and dealers. This leads to higher
price realization.

4)Competition:- another factor that influence pricing is competition. No

manufacture is free to fix his price without considering competition, unless he
has a monopoly. To avoid competitive pricing, a firm may decide that its
product may be sufficiently different from that of the others. This is achieved
through methods of advertising, branding etc.. Sometimes a higher price may
itself differentiate the product. This is known as prestige pricing.

5)Distribution channels:- Distribution channels also sometimes affect the

price. There are many middlemen working in the channel of distribution
between the manufacturer and the consumer. Each one of them has to be
compensated for the services rendered.

6)Supply of the product:-if the supply is less than demand, then the price of
the product will be more.

7)Availability of raw materials:- Availability of raw materials in domestic

markets generally enable the firm to bring down cost of production. The firm
can fix a low selling price.

8)If the brand is very popular among the consumers, then the manufacturer
can
charge a higher price for the product.

9)If the purchasing power of the consumer is high, then the company can
charge a

higher price for the product.

10) Promotion cost would normally increase the selling price as the company
would
like to recover the cost from the consumers.

Q) What is meant by pricing and explain kinds of pricing? Sol:Economists

defines price as the exchange value of a product or service always expressed
in terms of money. In simple terms price is the amount charged for the
product or service. To the buyer price is a package of expectations and
satisfaction. To the seller price is a source of revenue and main determinant
of profit.

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A firm may choose various kinds of pricing for their products:-

1) odd pricing:-

odd price may be a price ending in odd number or a price just under a round
number. Such a pricing is adopted generally by the seller of specialty or
convenience goods.

E.g.. Bata shoes are priced at399.95. Odd price may bring more sales. Under
odd pricing, buyers may feel that it is a mark down price.

2) Psychological pricing:-

it is stated that there are certain critical points at prices such as 1,2,4,5,10
are psychologically appearing to consumers.

E.g.. Products such as shampoo, chocolates and biscuits are sold at certain
price to attract customers.

3) Prestige pricing:- prestige pricing is one that is fixed at a higher price,

when
the producers near perfect substitute. Prestige pricing is adopted because
many customers feel that high price means high quality. Moreover the
customer heels a high status at a high price.

4) Consumers expectations:- such prices are fixed by consumers.

Consumers are familiar with the rates and market condition and expect a
particular price to be charged for certain products.

5) Geographical pricing:- the distance between the seller and the buyer is
considered on Geographical pricing. When there is lot of distance between
production center and consumption centre, the producer or marketer can
adopt different prices in each area without creating any ill/will among
customers. There are two ways of charging transit cost.

a) F.O.B pricing( free on board):- F.O.B may be of two types i) F.O.B origin
and F.O.B destination:- in the first case, the buyers will have
to incur the cost of transit a part from the price quoted and in the latter the
price quoted is inclusive of transit charges.

6)Zone pricing:- price is equal in the same zone. Market for a product is
divided
into various zones. South zone, north zone etc.. In other words price are
uniform with in a zone.

7) price lining:- price lining is formed more commonly among retailers than
among wholesaler or producers. This system consists of selecting a limited
number of prices at which the store will sell it goods. E.g. A buyer of shirt can
go into a shop where shirts are retailed between 250/- t 500/-, it also helps
the shopkeeper to plan his purchases..

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when a manufacturer sells the same product at two different prices, it is dual
pricing. Under the dual pricing a producer is required compulsory to sell a
part of production to the govt or its authorized agency at substantially low
price. The rest of the product may be sold in the open market at a price fixed
by the producers. Eg. Sugar. it is also known as variable pricing. This method
is invaluably adopted by industrial suppliers. In certain cases, the product
may be prepared on the basis of specification or designed by the buyer. In
such cases the pricing has to be negotiated and then fixed.

8)dual pricing:-

9)Negotiated pricing:-

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DISTRIBUTION IN RURAL MARKET
Introduction:The rural consumers normally purchase their household
requirements from village shops, haats and mandi towns. There are 60lakh
outlets, both in urban and rural markets in India. Out of this, 36lakh retail
outlets are spread over 6lakh villages and making the products available in
the store shelves is a challenge for the marketer.

Obstacles to reach the rural consumers:1. The distribution chain requires a

large number of intermediaries and this increase the cost of distribution. 2.
Non-availability of dealers. 3. Poor viability of retail outlets due to low
business volume. 4. Inadequate banking facilities. 5. Only about 80% of the
markets are connected by roads. 6. Interior village roads get flooded during
monsoon. 7. Transport and communication facilities are generally poor in
villages. 8. Credit requirement of channel members.

Channels of distribution:Marketing channel is the route taken by the title to

the product as it moves from the producer to the ultimate consumer. Every
marketing channel starts with the producer and ends with the consumer. I tst a
two-way communication. Consumers purchase goods through such channels
and producers reach the consumers through marketing channels. The
channel members consist of wholesalers and retailers who are middlemen in
distribution and they perform all marketing functions.

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0 level Manufacturer

1 level Manufacturer

2 level Manufacturer

3 level Manufacturer

4 level Manufacturer
C&F agent

Retailer

Distributor

C&F agent

RuralDistributor consumer Consumer Retailer Distributor wholesaler

Consumer

Retailer

Retailer

Consumer

Consumer

1. Manufacturer- Consumer(Direct sale):-

In this case, the stocks are directly

supplied to the ultimate consumer avoiding middlemen and their commission.

This benefits the consumer as well as the seller.

Examples:-

in many states, the government has encouraged farmers to sell

vegetables directly to urban consumers by setting up farmers markett. These

markets are known as Rythu Bazzars (Andhra Pradesh) and vivasayigal
santhai (Tamilnadu). These markets are run by government and only farmers
are allowed to sell the agricultural produce to the consumers in the market.
The market works both in the morning and evening hours. The market
committee in consultation with farmers fixes the rates for different
commodities. The farmers come from about 25 villages surrounding the city
and are allotted stalls by the market committee. The market committee also
provides cold storage facilities for perishable commodities.

2. Manufacturer- Retailer-Consumer:Here, the stocks are sold to the

consumers through a network of retailers.

Examples:- Mahindra and Mahindra tractors have appointed dealers in

important rural
markets. A dealer either covers one district or two three tehsils. The

company arrange for supply of tractors to these retailers from their

manufacturing unit. The dealer looks after sale and service of tractors.

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3.Manufacture-distributor-retailer-consumer:The manufacturer appoints
distributors in key rural markets and these distributors cater the needs of
retailers in villages. This is a popular channel option used by manufactures.

Examples:- Manufacturers of tea, coffee and branded oil, appoint distributors

in district/
taluka headquarters and distributors service the retailers in villages.

4.Manufacturer-company-depot/C&F agent-Distributor-Retailer-Consumer:In
this case, the manufacturer moves the stocks to company depot/depot
operated by a C&F agent and from these depots, stocks are supplied directly
to distributors, who in turn service the retailers.

Example:- Agro-chemical companies like Syngenta, are using two/three

intermediaries to
reach the farmers in remote villages.

5.Manufacturer-company-depot/C&F agent-Rural DistributorWholesalerRetailer-Consumer:The manufacturer opens his own depots or

appoints
C&F agents in state capital or in key cities in each state. The C&F agent,
supply stocks to rural distributors. From the rural distributors, the stock move
through wholesalers and retailers to reach the ultimate consumers.

Examples:- Distribution of consumer products by companies like HUL, Dabur,

Nirma, Parle,
Marico in rural market.

Physical distribution:Physical distribution activities include order processing,

handling of goods, packaging, ware housing, transportation, inventory

control, banking and customer service. Considering the constraints in

physical distribution of stocks in rural areas, many companies have come out
with innovative solutions.

1) Company owned delivery vans:-

The van may be owned by the company or distributor. The delivery van takes
the product to the retail shops in village. The

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distributors salesperson travels in the van and he delivers the stocks to the
retailer and collects the money too.

Examples:-

Bharat petroleum has introduced rural marketing vehicle(RMV) way

back in 1999 in Punjab. The vehicle moves from village to village and fills LPG
cylinders on the spot to rural customers.

2. Hired vans:- In this case, the wholesaler uses a hired vehicle to cover the
retailers in
villages. Normally, the cost of operation of the hired vehicle is shared
between the wholesaler and the company.

Examples:- (a) HUL distributors use hired vehicle to reach the rural retailers.
(b) Syngenta distributors use hired vehicles for delivery of pesticides as well
as for collections.

3.bullock carts or camels:- these are used for covering remote villages with
no motor
able road. In certain parts of Kerala, A.P and Westbengal, boats also used to
cover villages that are not connected by roads.

4. Syndicate van distribution:-

In this case, the firms/distributors selling non-competitive

consumer goods come together to service the rural retailers. The delivery van
carries the product of both the companies.

Example:- A firm manufacturing edible oils and another local firm dealing in
biscuits,
namkeen and Atta could jointly service rural retailers, through van operation.

Conclusion:-

The rural markets and the consumers are scattered over a wide

geographical area. Considering low income of consumers, low density of

population, poor condition of roads, it becomes a difficult and uneconomical
to individually service all the villages. The marketers have to follow a
selective approach, based on market potential in developing a network of
distributors and retailers in rural markets.

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