Rural Marketing

Executive Summary

Through this project we have tried to understand the differences in the rural and urban market and it’s functioning. With the findings, we have come up with insights and best practices of urban markets that can help us/companies’ devise a different methodology for rural customers.

The primary difference between the markets is the ease of accessibility and the reach. While urban markets are easily reachable, the geographic diversity of India makes it difficult for companies to reach its rural customers. With broken distribution systems and high costs of transportation, making sure that the products reach remote villages of our country doesn’t look profitable at all. After the project, we want to come up with a distribution plan that FMCGs can adopt to ensure timely and cost effective distribution in rural areas.

In rural markets, the income of people is seasonal in nature. Hence, their purchasing power is not consistent or very reliable. People have very basic lifestyles in rural areas and always tend to opt for simpler/cheaper products.

Due to lack of awareness and not strong channels of communication, it’s extremely difficult to influence the habits of the public in such areas. The consumer buying behaviour in rural areas is largely based on the utility of the product instead of brand/value. Hence, understanding the mindset of such public is a huge task for the FMCG companies. With our primary and secondary research, we will try to break it down into factors that’ll help us understand what strategies will work in such scenarios.

One major challenge that FMCGs face in rural market is the local competitors. The rural market is fragmented with multiple small players who have a cost advantage when compared to FMCGs. Along with that, more than promotion, it’s the retailers and the channel partners that influence the decision making process of the customer.

The local competitors are able to capitalize on word of mouth marketing in these areas. No other type of marketing is as effective as word of mouth marketing in rural areas. People trust local companies who are essentially from the same place and find it difficult to associate with big brands that look fancy but aren’t homely.

Introduction

Rural marketing is satisfying demands of rural customers by providing them products and services at affordable price and generating profit. Rural marketing is very different from Urban marketing in terms of buying behavior, distribution network and awareness among consumers. Penetrating into rural marketing has been the top priority for many companies but only few have been able to penetrate the market. Therefore, in this project, we will research all the challenges that exist in rural marketing. For finding these challenges, we have focused on four main areas related to rural market: