Marketing to Rural India: Making the Ends Meet Published: March 08, 2007 in India Knowledge@Wharton On one side

are the fast-moving consumer goods (FMCG) and the consumer durables companies. On the other are consumers in rural India, potentially the largest segment of the market. Finally, the two are coming together. The fact that this has not happened in the past is not for want of trying. In Mumbai and New Delhi corner offices, executives have long recognized that to build real sales volumes they will have to reach outside the big cities. In several categories, rural India already accounts for the lion's share. According to MART, a New Delhi-based research organization that offers rural solutions to the corporate world, rural India buys 46% of all soft drinks sold, 49% of motorcycles and 59% of cigarettes. This trend is not limited just to utilitarian products: 11% of rural women use lipstick. Other numbers are equally revealing. According to the National Council of Applied Economic Research (NCAER), an independent, non-profit research institution, rural households form 71.7% of the total households in the country. Spending in this segment is growing rapidly and consumption patterns are closing in on those of urban India. Jagmohan Singh Raju, a professor of marketing at Wharton, says: "No consumer goods company today can afford to forget that the rural market is a very big part of the Indian consumer market. You can't build a presence for a brand in India unless you have a strategy for reaching the villages." Several European multinational firms -- and a few U.S. firms -- have been making inroads into rural India for years. Companies such as Unilever, Phillips and Nestle have long been known to India's rustic dukaandaars, or merchants. Among U.S. firms, companies such as Colgate and Gillette have made considerable headway. According to Raju, marketing to rural customers often involves building categories by persuading them to try and adopt products they may not have used before. "A company like Colgate has to build toothpaste as a category, which means convincing people to change to toothpaste instead of using neem twigs to clean their teeth, which was the traditional practice," he says. "This is difficult to do and requires patience and investment by companies. It's not like getting someone to switch brands." Companies that have figured this out are doing better in the villages than in the cities. Soft drinks giant Coca-Cola is growing at 37% in rural markets, compared with 24% in urban areas. According to Hansa Research, a market research firm that has published a Guide to Indian Markets 2006, the penetration of consumer durables has risen sharply in India's villages between 2000 and 2005. In color TVs, sales are up 200%; in motorcycles, 77%. In absolute numbers, however, the penetration is still low. Coke, for instance, reaches barely 25% of the rural market. This means the upside potential is huge for companies that develop effective rural marketing strategies.

According to NCAER, the low penetration rates can be attributed to three major factors: low income levels, inadequate infrastructure facilities and different lifestyles. But income levels are going up, infrastructure is improving and lifestyles are changing. Almost a third of the rural population now uses shampoo compared with 13% in 2000, according to Hansa Research. FMCG and consumer durables companies have in the past tried tinkering with all the four 'P's -- product, pricing, promotion and place-- of the marketing mix. Hindustan Lever -- which is in the process of changing its name to Hindustan Unilever to reflect the fact that it is the Indian subsidiary of the Dutch conglomerate -- is among India's largest FMCG companies. It has been highly successful in marketing in rural India and has been a pioneer in reaching out to the smallest of villages with innovative products such as single-use packets of shampoo that sell for a penny. (The rural consumer uses shampoo on rare occasions; she does not want to invest in a bottle.) Independent agencies run media vans that show movies in distant villages. They have live promotions and demonstrations during breaks. The area where innovation has moved to center stage is in the fourth P -- place (or distribution). Infrastructure has always been the bugbear of the Indian marketer. Distribution channels can make or break a company's rural marketing efforts. To sell in villages, products must be priced low, profit margins must be kept to the minimum and the marketing message must be kept simple. Empowering Women Consumers Hindustan Lever, whose 2006 revenues were $2.8 billion, has been learning these lessons for nearly a decade. The company's Project Shakti (its name means "strength") was born out of this realization, and it has become a case study for business schools and evolved beyond its original goals. "The objectives of Project Shakti are to create income-generating capabilities for underprivileged rural women by providing a small-scale enterprise opportunity, and to improve rural living standards with greater awareness of health and hygiene," says Dalip Sehgal, executive director of the Shakti initiative. Hindustan Lever's drive into rural India was prompted in part by growing competition. When the Indian economy opened up in early 1990s, multinationals such as Procter & Gamble stepped up their activities, forcing Hindustan Lever to seek higher revenues and growth by reaching into villages with 1,000 or fewer residents. Launched in 2001, Project Shakti was an important part of this strategy. It involved working with rural self-help groups (SHGs) to educate rural women, while also making them part of the company's marketing network. "Women from SHGs become Shakti entrepreneurs -- direct-to-home distributors [of Hindustan Lever products] in rural markets," says Sehgal. "This micro-enterprise offers low risks and high returns. The products distributed include a range of mass-market items especially relevant to rural consumers," such as soap, toothpaste, shampoo and detergent. The Shakti website features a video profile of Rojamma, a young woman from the state of Andhra Pradesh in Southern India, as an example of a typical Shakti distributor. A mother of two who was left to fend for herself and two daughters after her husband abandoned the family, Rojamma initially made ends meet by working in her parents' fields. She then joined the Shakti project and became a distributor of Hindustan Lever products, speaking in village after village to impoverished and often illiterate women about the need to bathe their children and wash their clothes regularly and also selling them soap and

detergent. The commission Rojamma earned on her sales helped provide for her family. "Today she is a proud entrepreneur and enjoys not only the money she earns from the project but also the respect of society," says Sehgal. "The lives of thousands of women have changed because of Shakti." A typical Shakti distributor sells products worth Rs 10,000-15,000 (around $250) a month, which provides an income of Rs 700-1,000 (around $25) a month on a sustainable basis. While this may not seem to be a high income, it makes an enormous difference to women who live in remote villages in dire poverty. In many cases, earnings from Shakti help them double their household income. Much of the additional income goes to educating children, and also to purchasing consumer durables such as television sets, which further expands the rural market for such products. Some Shakti distributors -whom the company calls "entrepreneurs" -- invest the extra money in buying vehicles such as motor scooters that allow them to go into more villages. Indeed, with help from Shakti distributors, Hindustan Lever has been able to reach rural consumers in thousands of remote Indian villages. According to media reports, Shakti distributors now account for 15% of the company's sales in rural India. Meanwhile, the potential for growth is enormous, since studies have shown that just 15% of Indian consumers use products such as shampoo. According to Wharton's Raju, there are behavioural reasons why rural consumers represent a sound bet for companies that are willing to invest in reaching them. "Affluent consumers demonstrate that they have 'arrived' by buying bigger houses or cars. People at lower income levels do so by buying premium brands. This means brand loyalty is very high among less affluent consumers. That is why the rural market is critical for companies. The first-mover advantage is significant." The Shakti model was piloted in 50 villages of the Nalgonda district in Andhra Pradesh. It has now spread to more than a dozen states, creating 26,000 women distributors covering 80,000 villages. By 2010, the goal is to recruit 100,000 Shakti distributors covering 500,000 of India's more than 600,000 villages. "This initiative has been extremely successful," says Ajay Gupta, CEO of www.ruralnaukri.com, a job site for the rural market. In addition to the distribution network, the Shakti project includes Shakti Vani (or voice), a social awareness program, and iShakti, a community portal. "Desktop computers are set up in the homes of Shakti entrepreneurs," says a Hindustan Lever spokesperson. "These computers are equipped with software developed by Unilever through which users can access content in categories including education, employment, agriculture, health and entertainment. They can also ask questions on any of these subjects and have them answered by experts." iShakti is in its early days; it was launched in November 2004. The Vani project, however, is operational in more than 20,000 villages in states like Madhya Pradesh, Karnataka, Chattisgarh and Andhra Pradesh. Hindustan Lever has also tied up with partners such as Tata Consultancy Services, India's largest software firm, which is actively involved with the iShakti portal, and ICICI, a financial services institution that is involved with providing micro-credit loans. With the network now in place, other companies want to hop on to the Shakti bandwagon. One service that is likely to be added soon is insurance. ITC's eChoupal Initiative

Another innovator in rural distribution -- the $3.6 billion, Calcutta-based tobacco-to-hotels conglomerate ITC -- has also been trying to build a platform that others can use. At a recent seminar on rural marketing, ITC chairman Y.C. Deveshwar outlined plans to create a trust that could work as an agency through which companies -- both private and public -- could market goods and services to Indian farmers. The trust route would hopefully make other companies more willing to sign up with their offerings. ITC has the right credentials to launch this trust. Like Hindustan Lever's project Shakti, its eChoupal venture has been the subject of several case studies. ITC's foray into an enhanced distribution network came from the recognition that the existing agriproduce distribution channels were inefficient. The company exports various agricultural products -soybean, rice and wheat, to name a few. It needs to source them from farmers. "In 2000, ITC embarked on an initiative to deploy technology to reengineer the procurement of soybeans from rural India," says S. Sivakumar, CEO of ITC's agri-business division. "Kiosks -- called eChoupals -- consisting of a personal computer with Internet access were set up at the villages." He explains that soybean farmers could access this kiosk for information on prices, but had the choice to sell their produce either at the local market or directly to ITC at their hub locations. A hub location services a cluster of eChoupals. By purchasing directly from the farmer, ITC significantly improved the efficiency of the channel and created value for both the farmer and itself. "While the eChoupal network was initiated to facilitate more efficient and effective procurement, the connectivity -- both physical and informational -- between the farmer and the market that it facilitated has allowed ITC to use it for distribution of goods and services from the market to the farmer," says Sivakumar. It has thus evolved into a business platform. The eChoupal infrastructure consists of:

A kiosk with Internet access in the house of a trained farmer, called aSanchalak. This kiosk is within walking distance of target farmers. A warehousing hub managed by the former middleman, called aSamyojak. This is within a tractor-driveable distance of target farmers. (The former middlemen were given a role to avoid resistance to the project. They joined because they could see that their traditional business was in jeopardy.) A collaborative network of companies orchestrated by ITC with a pan-India presence.

This is, of course, a simplified structure. And there has been a stream of new initiatives. For instance, in August 2004, ITC introduced the Choupal Sagar, a rural retail outlet at the hub. The first was set up at Sehore in Madhya Pradesh. "This 7,000 sq. ft. mall sells consumer goods as well as agri-products," says Sivakumar. The benefits to the farmer are obvious. And ITC itself gains. Apart from the more efficient channel, there is money to be made from the reverse flow. In 2005-06, ITC generated $23 million selling chemicals and

fertilisers. That may not sound like much, but it's early yet. In a recent move, ITC has set up its first urban outlet, the other end of the eChoupal chain, to retail fresh fruit and vegetables. What about other companies? Does it make sense for them to climb on the bandwagon? Sivakumar gives the example of PI Industries, which has increased its market share in Madhya Pradesh from 12.3% in 2003 to 33% in 2005 after partnering with ITC to sell through the eChoupal. "The eChoupal project is already benefiting more than 3.5 million farmers," says Sivakumar. "Over the next decade, the eChoupal network will cover more than 100,000 villages, representing one-sixth of rural India, and create more than 10 million e-farmers." Room for All Both Project Shakti and eChoupal have been around for less than a decade. Which is likely to succeed? Observers say there is place for both; the Indian rural market is huge. According to Wharton's Raju, while Shakti and eChoupal are different in orientation -- one focuses on individuals while the other is corporate-based -- each has been very successful in its own way. "You can't think of success just in financial terms," he says. "Both projects have created tremendous goodwill for Hindustan Lever and ITC." That is no small asset, especially for ITC, whose initials once stood for Indian Tobacco Company. Sivakumar claims the ITC model is superior because it involves two-way traffic. "We are starting with raising rural incomes," he says. "The level of affordability in rural India is low. For consumers to buy products, you have to first put more money in their pockets. We are creating a virtuous circle of higher income, higher productivity and higher consumption." He adds that there is a distinction between the commission paid to Shakti entrepreneurs and the micro-credit arranged for them, and the eChoupals' efforts to raise rural incomes by improving agricultural efficiency for the whole community. At Hindustan Lever, company officials are equally confident about Project Shakti. They say they are in the business of creating entrepreneurs and arranging micro-credit for them. This, too, has a catalyzing effect on the whole community. Raju believes that the drive to gain access to rural retailers is, in some ways, as critical as the one to reach consumers. "If you look at rural retail in India, the outlet size is very small. Merchants will often stock just one brand in a category; they do not have the resources to stock multiple brands. They will stock the brand that sells the most." This lesson has hardly been lost on Indian-owned companies. Over the coming months, the battle for rural wallets will include not just European and U.S. multinationals but also fast-growing Indian companies. A retail initiative by the $22.6 billion Reliance Industries is a case in point. The Mukesh Ambani-led group plans to pump in $5.5 billion over the next few years to create a farm-to-storefront infrastructure for a pan-India retail network. (Only part of this money is for the rural component.) Mukesh Ambani has company. Brother Anil Ambani, who parted ways with him in 2005, is connecting rural India through Reliance Infocomm, a mobile services provider. Its network now encompasses 240,000 towns and villages, accounting for 42% of the rural population. It plans to double the rural coverage to 400,000 villages, making up 50% of the rural population.

There are many others. The rural initiative of the Mumbai-based $1.3 billion House of Godrej -- Godrej Aadhaar -- plans to set up 1,000 stores across India in the next five years. Delhi-based telecom major Bharti Airtel chairman Sunil Mittal has tied up with Wal-Mart, which will need its supply chain. From the Goenkas to the Gulabchands, from the Tatas to the Thapars, every major Indian business group has plans to move into the hinterland. Like Thoreau and Tolstoy, Gandhi, revered as the father of modern India, believed that the country's future lay in her villages. These days, every marketer would agree.

RURAL ACTIVATION Rural comm. specialises in planning and executing ground level activities at various rural market places like haats, mandis and melas. A few of these concepts are elaborated below: Haats are weekly markets where people from surrounding villages conduct trade on fixed days. Across the country, there are over 46,000 haats that act as

Glimpse of Haat

distribution points, catering to almost 50% of the rural population. Their importance is evident from th e fact that each haat caters to the needs of a minimum of 10 to a maximum of 50 villages, drawing as many as 4000 villagers. Melas are gatherings of people for both entertainment as well as the sale and purchase of goods and services. Here's more about them:

Annual melas that are organised with a religious or festive significance are quite popular and provide an excellent platform for distribution. Over 25,000 melas are held in India annually that hold an average of 7.6 lakh visitors. Rural markets come alive at these melas and people visit them to make several purchases, with the average spend ranging between Rs. 5000 to Rs. 50,000 a day. Many brands are advertised and promoted since they're the ideal avenue for attaining product exposure, package familiarity, brand reminder and word of mouth.

Besides melas, rural markets also have the practice of fixing specific days in a week as 'Market Days' when the exchange of goods and services are carried out. Rural comm.'s extensive expertise and reach in rural areas enable its clients to tap this market for product promotion and sampling. In addition, its exhaustive knowledge on rural India helps it to track and exploit more opportunities in t hese markets.

Crowd attracted to a Godrej stall in a mela Some of the other on-ground activity options are: CUSTOMER CONTACT 'TOUCH POINTS' This includes 'Home-to-Home' campaigns and other such customer contact programs that help initiate a close interaction between the brand and its target customer. It also ensures the generation of a database of potential customers, which would subsequently be used for direct marketing efforts. WALL PAINTINGS Wall Paintings are one of the most widespread forms of advertising and are quite the favourite amongst the Indian rural masses. W all Paintings are important not only because they help to achieve brand awareness, but also because they highlight the key brand promise and enhance top of mind recall. Promoter explaining the product to consumers at their door step

AT&T wall painting at the back of a house

VAN CAMPAIGNS Van Campaigns are one of the most popular modes of communicating with rural consumers especially since they enable product sampling and trials. The main benefits of Van Campaigns are:

Better brand building Creating awareness about the brand and the company's products Product sampling Point of attraction around which people gather in large numbers Retail merchandising and door-to-door campaigns.

Van campaign for Choice contraceptives

EVENT MANAGEMENT Rural comm. has documented several folk forms of events that are performed in different states all over India. These are used in communication and planning strategies for a variety of clients depending on their needs. Some of the rural events it specialises in are as follows:

a. Folk media Folk media consists of folk songs, dances, puppetry, street theatre, magic shows etc. These media help in conveying the brand message with the help of entertainment.

Folk dance performance b. Interactive games Rural comm. designs interactive games that help draw large crowds where trials can be induced, thus facilitating spot sales. These games not only help in creating curiosity, but also build awareness about brands. c. Others

Crowd excitedly participating in an interactive game

Other events like sports, drama and infotainment programs etc. also work well in rural India as they entertain as well as inform people about a particular product.

Extensive and comprehensive research is undertaken across various product and brand categories to understand the behaviours, likes/ dislikes, attitudes and beliefs of people living in rural areas, vis--vis their urban counterparts. The information gathered is used to determine appropriate positioning for various brands and categories. Most importantly, it helps in devising and implementing brand communication with far more precision and accuracy.

MARKET RESEARCH/ STUDY In the present day, widespread data collection methods (primary, secondary, qualitative and quantitative) and intensive research have become mandatory in any research program. Rural comm. not only fulfils the mandatory clauses of its research undertakings, but also adds value to its programs by analysing the market potential with various customer profile and behaviour studies that help gain valuable insights into their preferences and tendencies. Its exhaustive market research examines all aspects of the business environment like competitors, market structure government, regulations and economic trends among various other factors. All these factors help in arriving at a more focussed strategy, and make the process of brand building better adapted for clients. In addition, the entire process is also followed up by surveys to evaluate the success of the campaign that help determine deliverables as against target objectives.

COMMUNICATION DEVELOPMENT In a country like ours where diversity in culture is evident all across, a number of factors like languages, literacy levels and media-penetration acquire unquestionable importance. Rural comm. helps its clients transcend these barriers and helps create brand communication solutions that are more focussed, precise and direct.

Lack of constant and consistent electric supply has been a major cause in restricting the penetration of television and other electronic media in rural India. In addition to this, literacy levels also form a dominant obstacle towards its proliferation. Even today, television reach in rural areas is dominated by Doordarshan. While radio has penetrated into rural India to a small extent, it is restricted mainly to the higher classes. Rural comm. understands that conventional media used in urban media plans is not wholly effective in rural India, and in order to reach the target customer, it uses media that are not only flexible and feasible, but also relevant and appropriate.

Dalda regional print advertisement

PRODUCTION Rural comm. provides production services by creating:

Various media options on the basis of its knowledge about rural consumers, their customs, traditions, tastes, dialects, etc. Products and region specific print advertisements, mailers, leaflets, posters and point of purchase promotion materials. Videos - films, documentaries, advertising commercials etc. Radio jingles - customised audio publicity programs

Promotion of Brand in Rural Market of India

Abstract Promotion of brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor. The Indian established Industries have the advantages, which MNC don't enjoy in this regard. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market. The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area. This paper is therefore an attempt to promote the brand image in the rural market. Introduction Indian Marketers on rural marketing have two understanding (I) The urban metro products and marketing products can be implemented in rural markets with some or no change. (ii) The rural marketing required the separate skills and techniques from its urban counter part. The Marketers have following facilities to make them believe in accepting the truth that rural markets are different in so many terms. (i) The rural market has the opportunity for. (ii) Low priced products can be more successful in rural markets because the low purchasing, purchasing powers in rural markets. (iii) Rural consumers have mostly homogeneous group with similar needs, economic conditions and problems. (iv) The rural markets can be worked with the different media environment as opposed to press, film, radio and other urban centric media exposure. How does reality affects the planning of marketers? Do villagers have same attitude like urban consumers? The question arises for the management of rural marketing effects in a significant manner so than companies can enter in the rural market with the definite goals and targets but not for a short

term period but for longer duration. The Research paper will discuss the role of regard. The strategy, which will be presented in the paper, can be either specific or universally applicable. Realities before the Marketers 70% of India's population lives in 627000 villages in rural areas. 90% of the rural population us concentrated in villages with a population of less than 2000, with agriculture being the main business. This simply shows the great potentiality rural India has to bring the much - needed volume- driven growth. This brings a boon in disguise for the FMCG Company who has already reached the plateau of their business urban India. As per the National Council for Applied Economic Research (NCAER) study, there are as 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. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. According to the NCAER projections, the number of middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size India is expected to be doubles that of urban India. HLL chairman MS Banga Says, "This exercise may not pay in the immediate future, but will definitely give long-term dividends. Incidentally, over 50 percent of the sales of HLL's fabric wash, personal wash and beverages are in rural areas. And we see a future in going rural in a major way". The improved agricultural growth is expected to boost rural demand, through not at too sizzling a rate. Moreover, the price drop in personal products, after the recent excise duty reductions, in also expected to drive consumption. "Better agricultural yields will give farmers more spending power, making the rural markets bullish," says an analyst. As a result, HLL has planned a rural marketing program that is expected to result in a marked growth in the consumption of the company's products in the rural market. HLL will adopt three-pronged marketing strategy- new price points, sizes and awareness campaigns for its detergents and soaps segment to augment rural growth. The Indian established Industries have the advantages, which MNC don't enjoy in this regard. The strong Indian brands have strong brand equity, consumer demand-pull and efficient and dedicated dealer network which have been created over a period of time. The rural market has a grip of strong country shops, which affect the sale of various products in rural market. The companies are trying to trigger growth in rural areas. They are identifying the fact that rural people are now in the better position with disposable income. The low rate finance availability has also increased the affordability of purchasing the costly products by the rural people. Marketer should understand the price sensitivity of a consumer in a rural area. The small sachet packs are the examples of price sensitivity. Colgate has done this experiment with launching of sachet packs for rural markets. Research Objectives

The research paper consist of following objectives: (i) To analyze the present promotion strategy of few brands in rural markets. (ii) To measure the success of rural marketing campaign of few brands in Terms of consumer appreciation. (iii) To study the determinants of specification factors which can decide the success the rural promotion strategy. (iv) To evaluate the effects of adopting the specific brand ambassadors in the rural marketing context. (v) To present suffocate on above-mentioned objectives. Review of Literature The Marketing Mastermind (2003), Hindustan Lever rural marketing Initiatives by "A Mukund" Marketing Mastermind has given the perspectives in which HLL has approached towards rural markets. The Economic Times (2003), "The rural market likes it strong" the strength of rural markets for Indian companies. Financial express, June 19, 2000 has published the strategy about FMCG majors, HLL, Marico Industries, Colgate Palmolive have formula had for rural markets. Research Modus Operandi and Design The research methodology for this research work is based on the survey technique. Few brands like Coca-Cola, BPL, Asian Paints have been chosen to conduct the research work. The Gram Panchayat areas have been selected on random basis from the list of available Gram Panchayat. The four-Gram Panchayat have been short-listed and 60 respondents have been selected in each Gram Panchayat so the total sample size N = 240. The respondents were organized in a group and asked about their views on following advertisement actions and theme. 1) In case of Coca-Cola how does the role of Aamir Khan affect the rural consumers? 2) In case of BPL Television how does Amitabh Bachchan give the impression about BPL Brand 3) How does the advertisement of Asian Paints with the Slogan "Sunil Babu" influence the rural consumers

The research design applied for this purpose is experimental with descriptive. The experimental design was suitable as the rural consumers fell interest about it and descriptive design depends on the explanation past about the campaign of these Brands. Conceptual Framework Given the Literacy scenario in to consideration the promotion of Brands in rural markets requires the special measures. Due to the social and backward condition the personal selling efforts have a challenging role to play in this regard. The word of mouth is an important message carrier in rural areas. Infect the opinion leaders are the most influencing part of promotion strategy of rural promotion efforts. The experience of agricultural input industry can act as a guideline for the marketing efforts of consumer durable and non-durable companies. Relevance of Mass Media is also a very important factor. Door Darshan had already acquired high penetration in rural households. Now the cable and other Channels have also penetrated in rural households. The newspapers and other printed Media are also gaining strategy but their role is still secondary in this regard. Results and Discussions The field exercise has given the various inputs about the rural consumers. This experience was unique from a marketer's point of view that the companies must have a proper understanding of rural marketing environment at a region wise basis. The data has tabulated in following manner. Advertisement of Coca-Cola (Acceptability pattern) Contents Language and content of Ad. Back ground effect of Ad. Favor 72% 50% Non-Favor 20% 20% 15% No Comment 8% 30% -

expressions and communication styles of Aamir Khan 85%

The Ad plays an important role for giving boost to rural consumers feeling. The feeling plays very important role. The Language and content (72%) and expression style of Aamir Khan (85%) play significant role. BPL advertisement Contents Amitabh Bachchan as a brand Ambassador Favor 75% Non-Favor 20% No Comment 5%

The Action style of Amitabh Bachchan The language of Ad.

65% 62%

30% 20%

5% 18%

Amitabh Bachchan is a leading player in the ad feature. The Action style of Amitabh Bachchan is a very delighted factor for rural Consumers. Contents Style of Presentation The concept of ad. Interesting and delightful Ad. Favor 77% 65% 63% Non-Favor 20% 20% 17% No Comment 3% 15% 20%

Style of presentation plays an important role. 77% is a high figure as this affects the whole creativity aspect of any ad. The total concept and delight fulness is a strong factor for this ad. Different Modes of promotions in rural market. Modes Hats Wall Paintings Melas Favor 65% 40% 65% Non-Favor 30% 53% 20% No Comment 5% 7% 15%

Hats and Melas play a very important role in this regard. The 65% response in favor of this is an indicator of this. Suggestions 1) Rural consumer environment must be understood before the creation of ad. 2) Rural mindset accepts the brands easily, which are close to their culture. This point must be reflected in ad for rural markets. 3) Sponsorships to the Melas and Hats must be considered in a significant manner. 4) Selection of brand ambassadors, lyrics must not be ignored in this regard.

They have a special liking for folk culture so this can be taken in an effective utilization of brand promotions. Conclusions The following conclusions could be drawn: 1) The Language and content must be according to the suitability of rural environment. 2) Background figures are also a deterministic factor. 3) Admissibility of brand ambassadors plays an important role in this regard. 4) Special promotion measures are the strong applicable factors in this regard.

requirement of an agency for your rural marketing promotion work ... Actually, We are not any kind of full flashed agency, but we are one of the largest manufacturing and trading unit of display / promotional material Which is widely used for any kind of Inside or Outside promotion either its in town area, or for rural area .... This activity includes : from studying the market, visit the site, taken the size, and then implementation in any district or zone or mandi Promotional and display material : Which are like :Banner stands, Backdrops, Standee, Snap on signage, Flex board / Dealers Board, Tent / canopy, Booth , Umbrella, Arch Gates, All type of metal frames, Sign Board, Banners, Danglers, Acrylic Sign, Edge Lit Sign, LED Sign, ... and all type of customized fabrication in aluminium, ms, ss, acrylic, led, acp .. of any merchandising unit or display. Apart of all this, We have all various all type of printing machines also, for your printing solutions .. to fulfill all your task under one roof. * Solvent / Eco solvent / Digital / Offset Company Biggest USP In-house facilities for Fabrication / Printing. Direct Importer from China of various std. Display items. Pan INDIA installation capabilities.

* Having a lots of other work involvements like OOH rights and other things ... Looking forward to be associated with you here at Linkedin and a positive reply from your side for a long time fruitfull business relationship with you.

Features of Indian Rural Markets *Large and Scattered market: The rural market of India is large and scattered in the sense that it consists of over 63 crore consumers from 5,70,000 villages spread throughout the country. *Major income from agriculture: Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity. *Low standard of living: The consumer in the village area do have a low standard of living because of low literacy, low per capita income, social backwardness, low savings, etc. *Traditional Outlook: The rural consumer values old customs and tradition. They do not prefer changes. *Diverse socio-economic backwardness: Rural consumers have diverse socio-economic backwardness. This is different in different parts of the country. *Infrastructure Facilities: The Infrastructure Facilities like roads, warehouses, communication system, financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate Infrastructure facilities. The rural bazaar is booming beyond everyones expectation. This has been primarily attributed to a spurt in the purchasing capacity of farmers now enjoying an increasing marketable surplus of farm produce. In addition, an estimated induction of Rs 140 billion in the rural sector through the governments rural development schemes in the Seventh Plan and about Rs 300 billion in the Eighth Plan is also believed to have significantly contributed to the rapid growth in demand. The high incomes combined with low cost of living in the villages have meant more money to spend. And with the market providing them options, tastes are also changing. Problems in the Booming Rural Marketing Although the rural market does offer a vast untapped potential, it should also be recognized that it is not that easy to operate in rural market because of several problems. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems.

The major problems faced are: *Underdeveloped People and Underdeveloped Markets: The number of people below poverty line has not decreased in any appreciable manner. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. Vast majorities of the rural people are tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices. *Lack of Proper Physical Communication Facilities: Nearly fifty percent of the villages in the country do not have all weather roads. Physical communication of these villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon. *Media for Rural Communication: Among the mass media at some point of time in the late 50s and 60s radio was considered to be a potential medium for communication to the rural people. Another mass media is television and cinemas. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when compared to the number of villages. *Many Languages and Dialects: The number of languages and dialects vary widely from state to state, region to region and probably from district to district. The messages have to be delivered in the local languages and dialects. Even though the number of recognized languages are only 16, the dialects are estimated to be around 850. *Dispersed Market: Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. Seven Indian states account for 76% of the countrys rural retail outlets, the total number of which is placed at around 3.7 million. Advertising in such a highly heterogeneous market, which is widely spread, is very expensive. *Low Per Capita Income: Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas. *Low Levels of Literacy: The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy. *Prevalence of spurious brands and seasonal demand: For any branded product there are a multitude of local variants, which are cheaper, and, therefore, more desirable to villagers. *Different way of thinking: There is a vast difference in the lifestyles of the people. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices. The difference is also in the way of thinking. The rural customer has a fairly simple thinking as compared to the urban counterpart.

The 4A Approach The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways. The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 As). Availability The first challenge is to ensure availability of the product or service. Indias 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, Indias largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system, which helps its brands reach the interiors of the rural market. To service remote village, stockists use auto-rickshaws, bullock-carts and even boats in the backwaters of Kerela. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semiurban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices. Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase occasions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. Some of the FMCG giants like HLL took out project streamline to significantly enhance the control on the rural supply chain through a network of rural sub-stockists, who are based in the villages only. Apart from this to acquire further edge in distribution HLL started Project Shakti in partnership with Self Help groups of rural women. Affordability The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh the so-called `Bimaru States.

Hindustan Lever, among the first MNCs to realise the potential of Indias rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multiserve sachet of 200 gm priced at Rs 15. Acceptability The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company, which has reaped rich dividends by doing so, is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice-boxes a tin box for new outlets and thermocol box for seasonal outlets. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably priced policies in the nature of group insurance covers. Awareness Mass media is able to reach only to 57% of the rural population. Creating awareness then, means utilizing targeted, unconventional media including ambient media .For generating awareness, events like fairs and festivals, Haats, etc., are used as occasions for brand communication. Cinema vans, shopfronts, walls and wells are other media vehicles that have been utilized to increase brand and pack visibility. Ideas like putting stickers on the hand pumps, walls of the wells putting on tin plates on al the tree surrounding the pond are some of the innovative media used by personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel. Idea was to advertise not only at the point of purchase but also at the time of consumption. With large parts of rural India inaccessible to conventional advertising media only 41 per cent rural households have access to TV building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer movies and music and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence. Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language.

Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas. The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the companys profit margins. In case of nestle, companys product portfolio is essentially designed for urban consumers which cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive. Role of Rural Retailing Retailing is the final phase of the distribution channel and it is clear by now that it is availability and distribution that drives growth in rural Indian markets. Hence retailing will be significant and will undergo greater organisation and maturity as is being witnessed in the urban markets, even in the rural markets. Innovative retail models which take into account the nuances of rural markets is the way forward. Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase decisions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. India offers a huge, sustainable and growing rural market which can be tapped effectively through innovative distribution channels with retailing being the most critical element of this strategy as it is the final touch point and the actual touch point with the customer which can be the most critical influence in the buying process.

Why Companies See Bright Prospects in Rural India

In late May, when India's GDP numbers were released, many were happily surprised. In the fourth quarter of the fiscal year (January-March 2009), the economy grew 5.8% against expectations of less than 5%. For the year, growth was 6.7%, less than the 9% recorded in 2007-2008, but still very respectable during a global downturn. Multinational banks and brokerage houses rushed back to their spreadsheets to raise their growth forecasts for 2009-2010. But why were the estimates so pessimistic in the first place? A possible explanation is that most analysts work in cities, and their views are colored by what is happening around them and in the corporate world. That picture has been bleak: During the last quarter of 2008-2009, manufacturing shrank 1.4%. In contrast, agriculture grew 2.7%. The feel-good factor in urban India is returning only now with a new, stable government and a sharp jump in the Bombay Stock Exchange Sensitive Index (Sensex).

In the villages and small towns, it has been a very different picture. "The rural market is insulated from the global meltdown," says Harish Bijoor, CEO of brand and business strategy consultants Harish Bijoor Consults. "The rural part of our economy has been untouched by credit cards and mortgages as known in the West." "The slowdown experienced by India on account of the IT (information technology), real estate, financial services and automobile sectors was an urban phenomenon," says Ajay Gupta, founder and CEO of ruralnaukri.com, which focuses on jobs in the rural sector. "However, the negative impact of all this on urban India has been more than offset by encouraging performance in rural areas. The rural economy has provided a cushion. Overall sentiment in the country was different from other parts of the world where each household had at least one person with a pink slip." "Several factors have led to an increase in rural purchasing power," says Pankaj Gupta, practice head, consumer & retail, Tata Strategic Management Group. "The increase in procurement prices [the government sets the minimum support price -- MSP -- for many farm products] has contributed to a rise in rural demand. A series of good harvests on the back of several good monsoons boosted rural employment in agricultural and allied activities. Government schemes like NREGS [National Rural Employment Guarantee Scheme, which guarantees 100 days of employment to one member of every rural household] reduced rural underemployment and raised wages. Also, farmers benefited from loan waivers [introduced in the last Union Budget]. The increase in rural purchasing power is reflected in rural growth across a number of categories. For example, in the financial year 2009 [April-March], FMCG [fast moving consumer goods] rural volume growth is estimated to be 5% to 12% higher than urban growth across a number of categories." A Short-lived Renaissance? Some academics agree with these upbeat views of a rural resurgence. "Policy measures like the waiver of agricultural loans to the tune of US$13.9 billion and the NREGS have really put cheer into the rural economy," says Devi Singh, director of the Indian institute of Management Lucknow (IIML). "The Bharat Nirman program with an outlay of US$34.84 billion for improving rural infrastructure is another step that has helped the rural economy. To some extent, the growth of organized retail can also be held responsible for the rural economy's growth, as this has ensured that farmers get a better price for agricultural produce. The MSP set by the government has been rising further, fuelling rural growth by putting more money into the hands of the rural population." Singh adds a caveat, however. "While the statement that the Indian economy has been saved from the slowdown due to rural growth is true to a certain extent, this is not the only factor," he says. "India's growth has been fuelled more by domestic demand than exports. Also Indian spending and saving habits differ from other parts of the world. Indians by their very nature always save for their future and this holds them in good stead during times of crisis. The Indian buyer is more finance conscious than his global peer. The Indian banking system, due to the so-called non-reforms, is actually more resilient and the level of delinquencies is far lower than in other parts of the world."

Some observers are skeptical about the durability of rural demand. "There is a worrying groundswell of optimism that rural consumers will come to the rescue of an Indian economy which is in the midst of a sharp slowdown. This optimism may be misplaced," suggest consumer behavior expert Rama Bijapurkar and Rajesh Shukla, a senior fellow at the National Council for Applied Economic Research. Writing in business daily Mint, they continue: "Hearing phrases such as 'rural renaissance' or 'rural India to the rescue' makes us nervous. Such talk bears overtones of the 'Great Indian Middle Class' story of the 1990s, where we declared victory at least a decade before we should have." Their question: How sustainable, stable and volatility-free is the growth in income and consumption? Bijapurkar and Shukla note that "periodically, India has seen a consumption spurt because of a one-time burst of a combination of events. This recent spurt seems no different. Over the past four years, the monsoon has been good; the support prices for crops have grown at 10% to 15% CAGR [compounded annual growth rate] in 2005-2008 compared with 2.5% to 4% in 2002-2005. In addition to a healthy flow of farm credit, there has been a one-time loan write-off of US$13.9 billion as well as a sizeable cash outlay from the NREGS. This doesn't show intrinsic growth in rural India: This growth is, instead, owing to a combination of acts of God and acts of government. What we must never do is make the same mistake with rural India that Western multinationals make with India as a whole -- assume that it will evolve the same way with a 10-year lag. The rural Indian market and consumer call for sophisticated new marketing strategies and paradigms, not a transplant of old ideas." What Rural Means Even as this debate continues, the term "rural" is being re-defined. "'Rural' is difficult to define any more," says Bijoor of Bijoor Consults. "Typically, from an Indian census point of view, rural has been defined with a 'deprivation' orientation, rural being a landmass without access to continuous electricity, water, the stock market. There has been a correction in this view, however. Marketers today define rural as people living a different lifestyle as opposed to that of those who have settled in the bigger cities and towns. Rural is defined as pastoral in nature and as a mass of people who relate their income closely to the lands they till or use to raise their cattle and livestock. I, personally, define rural differently. I believe rural is a mindset. Those who possess it are rural and those who do not are urban. To that extent, in Bangalore city, just off the old airport road, are a whole set of people who live by farming on their lands. If you visit their homes, their lifestyles are totally rural. Similarly, there are people who live in villages, who have access to the best of it all. These are urban folk. Rural is not a geography; it is a mindset." "Definitions for rural India abound while the most convenient remains, 'anything that is not urban'," says Gupta of ruralnaukri.com. Singh of IIML adds: "Rural India comprises all places that are not urban." This definition by exclusion for what is the much larger part of the country has its roots in the government's own approach. "The Census of India defines urban India," says Gupta of TSMG. "Urban India constitutes places with a population of more than 5,000, a population density above 400 per square kilometer, all statutory towns, that is, all places with a municipal corporation, municipal board, cantonment board, notified area council, etc. and with 75% of the male working population engaged in non-agricultural employment. All non-urban is rural."

Such definitions leave marketers cold. "The traditional definition of rural may be of little use to marketers in terms of providing consumer insights," says S. Ramesh Kumar, professor of marketing at the Indian Institute of Management, Bangalore (IIMB). "Given the diversity of culture and lifestyle/aspirational changes that are taking place across non-metro consumers, the non-metro areas need to be segmented into tiers of varying urban orientation using psychographic and lifestyle analysis along with demographics. The digital 1 or 0 type of urban and rural definitions is unlikely to yield consumer behavior nuances. For example, district headquarters [towns] in Tamil Nadu are likely to be significantly different from those in Karnataka or Maharashtra." Many others agree that census-style definitions are no longer enough. "My understanding of rural India is a less developed countryside where the infrastructure is primitive, houses are of mud or brick but rarely painted well, the primary source of livelihood is agriculture, employment opportunities in the organized sector are negligible, eating choices are restricted to home-cooked, simple food, schools are far away, health facilities are rudimentary and -- importantly -- the youth, while energetic and ambitious, are to be seen playing cards the whole day," says Gupta of ruralnaukri.com. "We recognize rural India by certain characteristics," says B.N. Garudachar, general manager, corporate communication and investor relations at Voltas, a Tata group company in air-conditioning and engineering services. "These are: low population numbers, low median income, poor infrastructure [roads, electricity, communications], and agrarian rather than industrial activity. Such rural areas are within the sphere of influence of neighboring cities and metros. This influence determines their aspiration levels and their viability as markets." Massive Market View it as you may, few people dispute that the rural market is massive. According to Singh, 12.2% of the world's consumers live in India. "Rural households form 72% of the total households. This puts the rural market at roughly 720 million customers." Gupta of TSMG extrapolates the Census 2001 numbers and comes up with an estimate of 790 million. "Total income in rural India (about 43% of total national income) is expected to increase from around US$220 billion in 2004-2005 to US$425 billion by 20102011, a CAGR of 12%," he says. Bijoor explains that this is entirely disposable income unlike what it would be in urban India. "If a farmer in rural Holenarsipura earns US$1, all of it is his to dispose off as he pleases. The same income in the hands of an urban person, who is possibly a tech worker, is actually not US$1 of disposable income. It is most likely 67 cents; the rest goes as tax. The farm economy, with zero-tax on farm income, creates far more disposable income. Buying power in the hands of the rural rich is higher than the buying power of the urban rich." Gupta of ruralnaukri.com provides some telling statistics. "The purchasing power of rural India is more than half for fast moving consumer goods [US$17 billion]," he says. "The durables and automobile sectors contribute US$2.5 billion each, and agri-inputs (including tractors) about US$1 billion. Some 42 million rural households [use] banking services against 27 million urban households. There are 41 million Kisan credit cardholders [credit cards issued to farmers for purchase of agricultural goods] against some

22 million card users in urban markets. Be it automobile, telecom, insurance, retail, real estate or banking, the future drivers of growth are rural. No marketer can afford to ignore the possibilities of rural India." Bijoor adds some growth numbers. "Our rural folk have bought a lot more of FMCG; this part of the market has grown at a robust rate of 23% [last year]," he says. "As durables shrink in urban India, the rural market is witnessing a 15% growth rate. Some 60% of the durables market lies in rural India. Telecom in rural India is growing at 31%." It depends on the product, of course. "Just the sheer population numbers don't mean very much from a marketing point of view," says Garudachar of Voltas. Across product categories, however, there seems to be a lot of action. Media -- particularly TV -- has been a great leveler. Even in small villages, people who have seen the urban lifestyle on television seem to want similar goods and services. Companies have realized this and are going all out to tap this latent demand. Consider some examples: The State Bank of India (SBI) has started a zero-balance bank account program for villagers. Called the SBI Tiny account, there are no physical branches or officials, just a paid volunteer who is equipped with a small box and a cellphone. The box enables biometric measurements (fingerprints), at the time of opening the account to confirm the account holder's identity. The cellphone enables communication with the zonal office to check on available balance. Payments under programs such as the NREGS and pensions are made directly to these accounts. The advantage for the villagers is that they can withdraw money from their accounts at any time of the day or night. (Withdrawals are never more than a few dollars.) SBI hopes to cover 100,000 villages by 2012. The bank has tied up with India Post for some services. India Post, the public sector postal network, has its own plans. It has been hard hit in urban areas because of the more efficient (though more expensive) private sector courier services. Now it is looking at consolidating its hold on the rural areas. Project Arrow has been launched to IT-enable post offices in the hinterland. A pilot project involving 500 post offices -- the country has more than 150,000 -- has been kicked off. It will focus on banking, money remittance, and transmission and delivery of information. Products for Rural Markets Maruti Suzuki, India's leading automobile manufacturer, today sells 5% of its vehicles in the rural markets. The company expects this number to rise to 15% in the next two years. "This is not just our wish, but reflects market demand," says director (marketing & sales) Shuji Oishi. In telecom, service providers are making a beeline for the villages. That's where the growth in what is now the world's fastest growing mobile market lies. According to industry estimates, 70% of all new subscribers will come from rural areas. (See NTT DoCoMo's Tata Deal: Why Global Telecom Firms Want to Dial India.)

Mobile device manufacturers are also tailoring their products to this market. Nokia had earlier launched a basic handset with a torch (large parts of rural India don't have electricity) and an alarm clock. (see How Did Nokia Succeed in the Indian Mobile Market, While Its Rivals Got Hung Up?) In December 2008, it went one step further with the launch of Nokia Life Tools. "Nokia Life Tools is a range of agriculture, education and entertainment services designed especially for the consumers in small towns and rural areas of emerging markets," says the company. "Aimed at providing timely and relevant information customized to the user's location and personal preferences directly on their mobile devices, Nokia Life Tools is the first step towards bridging the digital divide." The mobile phone is a new-age product; gold jewelry is as old as the hills. Here, too, there has been a rural move. According to World Gold Council figures, 60% of India's US$15 billion annual consumption of gold and gold jewelry is from rural and semi-urban areas. The Tatas have launched a mass-market jewelry brand -- GoldPlus. The Tatas train unemployed youth and send them to the villages as brand ambassadors. The problem with gold in India is that it is often adulterated. In rural areas, gold jewelry is not for ornamentation; it is a safety net for emergency situations. Thus, the Tata seal of good housekeeping is taking the brand places. "GoldPlus is an interesting example of the brand addressing the non-metro jewelry culture with its ethnic touch with regard to its designs and retailing," says Ramesh Kumar of IIMB. "There is substantial scope to create products that are oriented towards non-urban sectors," notes Kumar. "These can be in terms of functional appeal or cultural aspects or both. Chik shampoo created the jasmine variant [in tune with the culture of women using jasmine flowers to style their hair in a few parts of the country]. TVS mopeds created functional value in tune with the 'all purpose' vehicle culture existing in several parts of the non-metro areas. Philips is moving forward with the creation of gas stoves and lanterns that will be useful to such markets." Singh of IIML talks about pricing successes: The Chik shampoo sachets sells for 2 cents, the Parle G Tikki biscuit packs at 4 cents and the Coca-Cola 200 ml glass bottle for 10 cents. Singh notes that successes in rural areas can be transplanted to urban areas also. "The shampoo in sachets created a new product segment," he says. "All shampoo manufacturers today retail in sachets, and the demand from urban India for this category is very strong." The sachet is as much a packaging (product) strategy as a price strategy. But, asks Garudachar of Voltas, have companies done enough about the core product? The shampoo sachet is a case in point. "Villages in India have hard water," he says. "But the shampoo that you get in sachets sold in villages is the same that you get in towns. Manufacturers should have tailored the products to suit the environment." It doesn't apply across the board, of course, particularly as manufacturers have moved away from the mindset that along with cutting price, you can cut quality. "Product re-engineering was an issue five years ago," says Bijoor. "I do not believe this is an issue at all today. The quality on offer needs to be the same all over. One company tried to pass off inferior quality tea leaves in rural markets and superior quality grades for urban markets under the same brandname. This fell flat."

But re-engineering is necessary in a different sense. According to Bijoor, "Companies are realizing that the urban and rural want is largely the same. However, the rural person is savvier and demands real value for money. To offer this, marketers are re-engineering products. Look at the auto segment. The urban man wants a car as does the rural man. Both have the same amount of money. The rural person, however, believes spending US$12,000 on a car is a sin. He wants it at US$3,000. The Nano is a solution. Every category needs to operate on the Nano paradigm. The needs are all the same, across rural and urban. The solutions have to be different." Distribution and promotional channels also need to be different for rural markets. Companies are getting their act together here, too. Private sector companies like ITC have set up the IT-enabled eChoupal network, and Hindustan Unilever has project Shakti, under which women's self-help groups act as the last link of the retail chain. (See Marketing to Rural India: Making the Ends Meet.) As mentioned earlier, India Post wants to convert itself into a retail chain for a variety of products. Even fair-price shops, which form part of the government's rationing system, are trying to expand beyond supplying just basic foods like rice and wheat. In the area of promotion, television has invaded rural India. TV reaches even very small villages through community sets. But advertising on national channels is wasteful if you are trying to target rural areas. Garudachar of Voltas says his company is trying to sell air conditioners to the rural rich. "Difficulties in penetration are due to the widespread and scattered nature of the territory," he says. "At one time, basic conservatism and diehard thrift would also have been factors, but exposure to TV has changed all that, and created aspirations where once there was resistance to change." From Four P's to Four A's Gupta of TSMG notes that the traditional four P's of marketing -- product, price, place and promotion, as outlined above -- have been replaced by a different framework for analysis. "A number of companies have worked on various elements of the marketing mix to improve the four A's -- affordability, awareness, availability and acceptability -- for rural markets," he says. "FMCG companies innovated on package sizes to introduce low price points. They have customized promotional strategies for rural markets using local language and talent. Some FMCG players continue to expand rural penetration [HUL's Project Shakti, Tata Tea's Gaon Chalo]. Coca-Cola's Parivartan program has trained more than 6,000 retailers to display and stock products. Dabur has created a training module ASTRA [advanced sales training for retail ascendance] in several regional languages. A number of auto companies have launched rural-specific campaigns." Gupta of ruralnaukri.com offers more examples: * Affordability -- Godrej introduced three brands of Cinthol, Fair Glow and Godrej (soap) in 50-gram packs, priced at 10 cents; Adidas and Reebok increased their sales by 50% in rural markets by reducing prices.

* Size and design changes -- Videocon introduced a washing machine without a drier for US$60; Philips launched a low-cost smokeless chulha (stove); DCM Shriram developed a low-cost water purifier especially for rural areas. * Improving product acceptance -- LG Electronics developed a customized TV (cheap and capable of picking up low-intensity signals) for the rural markets and christened it Sampoorna. It sold 100,000 sets in the first year; Coca-Cola provided low-cost iceboxes as regular power outages meant families could not depend on refrigerators. Perhaps the ultimate sign that rural India has arrived is in the allocation of talent. "In the old days, the weakest people in organizations, the ones without a star career path, held the reins of the rural marketing divisions," says Bijoor. "Today, things have changed. Sharper and sharper brains from within the organization are being diverted to rural strategy formulation." When the whiz kids go to villages, you know the cows have come home.

CASE STUDY Bharti Airtel Rural Strategy - Connected Life Experiences on the Move - Document Transcript 1. CLUE Case Study Bharti Airtel Rural Strategy Connected Life Experiences on the Move Challenge/Opportunity EXECUTIVE SUMMARY Bharti Airtel was faced with the challenge of profitably serving the COMPANY PROFILE Bharti Airtel Limited is one of Asias leading rural areas of India. It is an extremely daunting task due to a variety integrated telecom services providers with of factors: rural users low incomes, a widely dispersed population, operations in 19 countries across Asia and Africa. The company is structured into four strategic and a less than ideal public infrastructure (i.e., roads, electricity, etc.). business units: mobile, telemedia, enterprise, and digital TV. The mobile business offers Specifically, Bharti Airtel had to address the following conditions: services in India, Sri Lanka, and Bangladesh. COMPANY HISTORY The incomes of Indian rural residents are significantly lower Bharti Airtel was established as Bharti Tele- than urban residents. The average revenue per user (ARPU) Ventures Limited in 1985. This telecommunication company is a joint stock holding enterprise for rural residents was typically less than US$2 per month. headquartered in New Delhi. Bharti Airtel, commonly called Airtel, is among largest Besides deploying a scalable network, Bharti Airtel also needed mobile service operators with a subscriber base of nearly 75 million. to establish a cost-effective marketing, sales, and distribution channel to provide service promotion and customer support. Counter to these challenges were the significant opportunity that the Indian rural market represented and Bharti Airtels unique ability to address it. The future growth of the Indian mobile market is expected to be driven by rural customers, which account for about 70 percent of the countrys total population (1.1 billion people) with a teledensity of only 18.5 percent as of September 2009. Indian urban mobile penetration is already over 100 percent. Rural dwellers place a high value on communications. Contacting urban/overseas relatives and friends often requires a long and sometimes treacherous trip to the nearest town to reach a payphone.

Various studies (e.g., fishermen in the Indian state of Kerala and grain producers in Niger) have shown that increased mobile service penetration in rural areas could have tremendous socioeconomic benefits for the rural population. With its strong presence in the relatively untapped rural market (over 27 percent market share as of September 2009), Bharti Airtel is well-placed to continue growth with its focus on under-penetrated Indian regions with new revenue streams such 3G-enabled data services and pay-TV. 2010 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information. Page 1 of 3 2. CLUE Case Study Alliances/Partnerships To extend its reach in Indias rural markets, Bharti Airtel is focusing on innovative initiatives, including efficient infrastructure deployments, expanding its distribution network via partnerships, and customized content and tariffs. Bharti Airtel has launched microfinancing agreements in collaboration with Nokia and SKS Micro-finance. Under these partnerships, Bharti provides subsidized tariffs and subscriber identity module (SIM) cards to rural users, Nokia provides subsidized handsets, and SKS offers microfinancing. To expand coverage into rural regions, Bharti Airtel is sharing passive infrastructure services with Vodafone (42 percent ownership) and Idea (16 percent ownership) through its joint venture, Indus Towers. Sharing the infrastructure cost and usage between multiple operators has helped Bharti Airtel to reduce its operating and capital expenses. Bharti Airtel also formed a joint venture with the Indian Farmers Fertilizer Cooperative Limited (IFFCO). Its joint venture, IFFCO Kisan Sanchar, uses IFFCOs wide rural presence (present in 80 percent of Indian villages) and appeal among the rural agricultural community to market and distribute Bhartis products. IFFCO Kisan Sanchar provides subsidized handsets and connections at competitive rates in rural areas. It also helps Bharti Airtel to identify and acquire suitable locations for deploying its cell sites. In addition, it offers tailored services including voice-based updates on crop prices, farming techniques, rural health initiatives, and help line services. Strategy Bharti Airtel first studies the commercial viability of a rural community (and the surrounding villages) based on parameters such as source of livelihood, average income, and involvement in frequent commercial transactions or travels. The company has developed a prioritized deployment strategy based on the specified criteria. Qualifying villages are first to receive a base station, which also caters to nearby communities. To help ensure efficient usage and profitability for each of these base stations, Bharti Airtel tracks the revenue generated per base station (instead of ARPU, which is considered less relevant in a rural context). The following best practices have also been established: Bharti Airtel has adopted the strategy of direct communications to market its value proposition to rural customers. To make its services accessible, the company provides all of its marketing content in local languages. Vans are used to cover rural areas with staff who educate locals about mobile services and usage. The company has developed a shared phone service called Public Call Offices (PCOs) in rural regions to increase awareness about its brand and services. Bharti Airtel Service Centers have been set up in villages to address customer queries and complaints as well as act as sales and distribution points. These centers employ local people and offer sales and customer services using local dialects. Bharti Airtel has already established over 18,000 service centers in rural India, covering over 400

languages and local dialects. The company plans to expand this network. 2010 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information. Page 2 of 3 3. CLUE Case Study Success Factors/Metrics/Monetization Bharti Airtel does not provide separate rural key performance indicators, but the following results have been publicly announced: As of April 2010, Bharti Airtels network covered 440,000 villages in India, which, together with its urban services, accounted for coverage of approximately 84 percent of Indias total population. As of March 31, 2010, Bharti Airtel had added 9 million new customers to reach a total of 128 million connections. Ovum estimates that rural users accounted for 60 percent of the companys net subscriber adds in that quarter. Despite Bharti Airetels overall ARPU of just under $5, its mobile divisions earnings before interest, taxes, depreciation, and amortization (EBITDA) margin was approximately 30 percent, and its earnings before interest and taxes (EBIT) margin was approximately 19 percent, which indicate a healthy return on overall (including significant rural) investments. In a country like India, which is so vast, with a very dismal penetration of fixed line broadband, I think wireless is the only solution. Like for most Indians the first call, the voice call, was on a wireless device; similarly, for most Indians, the first access to Internet will be also through a wireless device. Sanjay Kapoor, CEO, Bharti Airtel See quote source Company Background Read Bharti Airtel overviewPrinted in USA FLGD 09319 10/10 2010 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information. Page 3 of 3

CASE STUDY Rural Marketing by Cavinkare Pvt Ltd - Presentation Transcript 1. CavinKare Pvt. Ltd : A way towards Rural Market Presented By - Presented To- Zia Ahmad Mr. N.H Mullick R.N.-04 Faculty- ISMC PGPIMC (2008-08) 2. Rural Marketing- An Overview
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Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the urban. There are as many 'middle income and above' households in the rural areas as there are in the urban areas. The share of FMCG products in rural markets is 53%, durables boasts of 59% market share.

Source:- National Council for Applied Economic Research (NCAER). 3. Rural Marketing- An Overview

The number of middle and high income households in rural India is expected to grow from 80 million to 111 million by 2008. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India.

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Source:- National Council for Applied Economic Research (NCAER). 4. Rural Marketing- A world of opportunity
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The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here.

5. Rural Marketing- Features

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Large and Scattered market : It consists of over 63 crore consumers from 5,70,000 villages spread throughout the country. Major income from agriculture : Nearly 60 % of the rural income is from agriculture. Traditional Outlook : The rural consumer values old customs and tradition. They do not prefer changes.

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6. Rural Marketing- Challenges

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Underdeveloped People : Vast majorities of the rural people are tradition bound, and believe in old customs, traditions, habits. Lack of Proper Physical Communication Facilities : Physical communication of the villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon.

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7. Rural Marketing- Challenges

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Many Languages and Dialects : The number of languages and dialects vary

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widely from state to state, region to region and probably from district to district. The messages have to be delivered in the local languages and dialects. Low Per Capita Income : Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas.

8. Rural Marketing- Challenges

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Low Levels of Literacy : The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. Prevalence of spurious brands and seasonal demand : For any branded product there are a multitude of 'local variants', which are cheaper, and, therefore, more desirable to villagers.

9. Rural Marketing- Challenges

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Different way of thinking : The difference is also in the way of thinking. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer has a fairly simple thinking as compared to the urban counterpart.

10. Introduction to Cavinkare Pvt. Ltd. CavinKare's Manufacturing Plant at Haridwar 11.
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In 1983 with a single product, CavinKare started out as a small partnership firm Chik India by Mr. C.K. Ranganathan. Chik India, which was renamed as Beauty Cosmetics in 1990.

In 1998 the Company was renamed as CavinKare Pvt. Ltd (CKPL).

Companys Profile Mr . C. K. Ranganathan , CMD - CavinKare Pvt . Ltd . 12.

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The reason behind the name is, Cavin means beauty in Tamil and care is spelt as Kare. The name is also a special one as it denotes the initials C and K of Mr. Ranganathan. The company offers quality Personal care (hair care, skin care, home care) and Food products.

Companys Profile 13.

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The Company, which primarily relied on contract manufacturing for many years has now set up its own world class plant at Haridwar to cater to the demand of both domestic and international market. The Company has employee strength of 576, an all India network of 1300 Stockists catering to about 25 lakh outlets nationally. CavinKare has touched a turnover of over 5000 million INR in 2006-2007.

Companys Profile 14. Products Range

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Personal Care Hair Care :

Chik Shampoo Nyle Herbal Shampoo Meera Badam Shampoo Indica Hair Colorant

15. Products Range

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Personal Care Ethnic Care :

Meera Hair Wash Powder

Karthika Hair Wash Powder Meera Herbal Hair Oil

16. Products Range

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Personal Care Skin Care :

Fairever Spinz Talc Spinz Deodorants Nyle Cold cream and lotion

17. Products Range

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Home Care : Tex

18. Products Range

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Food Division :

Ruchi Pickles Chinni's Pickles Chinni's Masala Chinni's Vermicelli Ruchi Gulab Jamun Mix

19. Milestones
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Awards CavinKare Pvt Ltd. Won ability award for 5 consecutive years :

Ability Awards- 2007 Ability Awards- 2006 Ability Awards- 2005

Ability Awards- 2004 Ability Awards - 2003

20. Competitive Analysis

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Major Competitors :

HUL P&G Dabur Himalaya health care Colgate-Palmolive

21.
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Market Share Chik shampoo with a 21.4 per cent share is the second largest selling shampoo in the Rs 1,200-crore (Rs 12 billion) shampoo market while its other brand Nyle has a 4.6 per cent share. It has a 9 per cent share in the Rs 750-crore (Rs 7.50 billion) fairness cream market with the Fairever brand. Others like Meera hair wash and Nyle moisturizing lotion have national shares of 23.4 per cent and 4.2 per cent, respectively. But they are the largest brand in rural Uttar Pradesh, Andhra Pradesh, etc. (Source: www.rediff.com/money/2003/jul/19spec.htm - 33k -)

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Competitive Analysis 22.

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The company has six major brands - Fairever, Chik, Nyle, Meera, Indica and Spinz. While its shampoo brands (Chik and Nyle) contribute 50 per cent to the company's turnover. The Fairever cream contributes 30 per cent. The balance is from Spinz (deodorant, perfume) Indica hair dye and other products.

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Important Facts 23.

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They associate with people of similar wavelength in thinking, who will definitely take care of quality first and foremost and besides, they have a strong system of quality monitoring. As part of their strategy, they lay down all the ground rules for the manufacturers in maintaining their standards. Outsourcing is one of the three cardinal rules of CavinKare's corporate strategy.

Marketing Strategy 24.

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Direct media promotions have helped build knowledge of product categories and change long-entrenched living habits. By the help of effective communication they tried to understand the fears, aspirations, and hopes of the rural consumers. CavinKare believes that its core competencies are research and development, brand building, and distribution management.

Marketing Strategy 25.

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The company is taking some tips from its shampoo experience. The Chinni pickles are available in single-use sachets that cost Re 1 to Rs 3, as well as low-priced, upright pouches. The rationale is simple: home-made pickle aside, the market is flooded with local brands. Consumers, therefore, have little incentive to upgrade to a branded product.

Promotional Strategy 26.

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Single-serve packaging will also serving in the institutional sales. CavinKare is hoping the low price point and convenience of sachets will help rope in hotels and restaurants as bulk customers.

CavinKare also introduced single-use sachets for its Spinz Singiez perfumes in two fragrances priced at 1.50 each.

Promotional Strategy 27.

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CavinKare Pvt Ltd is also running mobile beauty parlours. The mobile parlour exercise aims to provide a complete brand experience by having hair stylists use Chik on volunteers and distribute its Re 1 sachets as samples. The mobile parlours are targeting- girls' colleges, market places and residential localities.

Promotional Strategy 28.

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CavinKare have shown that communication is key when it comes to building brands in rural markets. CavinKare, which enabled its product brands to compete directly with market leaders such as HLL, P&G, Godrej and Henkel successfully. CavinKare's successful brands such as Chik, Nyle, Meera, Fairever and Spinz are good example.

Step towards Rural Marketing 29.

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CavinKare was the company responsible for the small sachet revolution in India. It was an important insight for marketing to rural India, at the time. Thats why C. K. Ranganathan was declared the Marketing Professional of the Year in the India Brand Summit-2003 . The awards were given for Leadership Excellence and Pioneer of sachet packing and mass marketing in rural areas.

Step towards Rural Marketing 30.

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When CavinKare entered the rural areas in South India, people used to wash their hair with soap.

When it launched the Chik brand of shampoo they educated the people on how to use it through live touch and feel demonstrations and also distributed free sachets at fairs. This strategy worked wonders in the rural areas of Tamil- Nadu and Andhra Pradesh.

Step towards Rural Marketing 31.

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This idea came in the mind of Mr. Ranganathans father when Epsom salt came in 100 gm packets. They wanted that coolies and the rickshaw pullers to use products. But due to the lack of marketing strategies they could not market the concept well. It renamed as Chik Shampoo after the death of father.

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How Chik Shampoo was born? 32.

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Flavours :

Chik Shampoo: An Overview 33.

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Girls and women of rural and semi urban population of India.

Target Audiences 34. Chik v/s Clinic Plus Sachets- 50 paisa Sachets- 4ml and 6ml. and Rs.1 Bottles- Rs.6, Rs10 Bottles 25ml, 60ml, Rs.20, Rs. 35 and 100ml,150ml,&500ml. Rs. 75 21.4% Sachets- 50 paisa, Sachets4ml, 6ml and Rs.1 and Rs2. 10 ml. Bottels- Rs.6, Rs.30 Bottles- 25ml 100 ml Rs.55 and Rs.90. 200 ml and 300 ml. 29.15% Price Size Market Share Shampoo 35. Overall Shampoo Market Shareo o o

HUL's (Clinic Plus, Sunsilk, Clinic All Clear, Lux and Ayush). CavinKare (Chik and Nyle). P&G (Pantene, Rejoice, Head and Shoulders).

Source:- www.hinduonnet.com/businessline

36.
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First Shampoo to launch variants such as Rose, Jasmine etc. First Brand to introduce " Cream Conditioning Shampoo" in a sachet, at 50 paisa per sachet. Second largest selling brand of Shampoo in the Rural market.

Magic of Chik 37.

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Cavin Kare discovered that soap usage was the biggest barrier and people did not see the need for using Shampoo. Company tried to convey the message to the consumer that soap usage was bad for the hair and when a product exists specifically for hair it should be used. Finally customers agreed that Shampoo usage gave soft and silky hair.

Communication Strategy 38.

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To build a local and regional presence, they advertised in local print and television, before taking the brands nationally. They advertised more often and hired well qualified professionals to compete with the competitors. The iconic Chik Girl in every Chik Shampoo commercial showcased the possibility of soft and manageable hair for the customers.

Communication Strategy 39.

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They went to the rural areas of South India where people hardly used shampoo. They showed them how to use it. They did live demonstration on a young boy. They asked those assembled to feel and smell his hair. Next they planned Chik Shampoo-sponsored shows of Rajniknath's films.

How Chik Shampoo conquered the rural market?

40.
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They showed their advertisements in between, followed by live demonstrations. They also distributed free sachets among the audience after these shows. This worked wonders in rural Tamil Nadu and Andhra Pradesh. After every show, their shampoo sales went up three to four times.

How Chik Shampoo conquered the rural market? 41.

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They altered the scheme, they started giving one free Chik Shampoo sachet in lieu of five Chik Shampoo sachets only. They sold shampoo in 50 paisa sachets at a time when other shampoo sachets were selling at Rs. 2. Soon, consumers started asking for Chik sachets only. The sales went up from Rs 35,000 to Rs 12 lakh (Rs 1.2 million) a month.

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How Chik Shampoo conquered the rural market? 42.

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Instead of using the conventional distribution route, they have created a `sachet' sales force that sells only sachet packs to small retailers including cigarette and paan shops. Separate hawkers' channel is being created that has moved from neighborhood to neighborhood. The hawker channels exist in all cities where they have a distribution network.

Distribution Strategy 43.

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CavinKare's personal products division is moving towards post offices. They are placing products at post offices, products such as shikakai powder, shampoo and hair dye. They are using such channels to expand product reach and gain accessibility. Because the unconventional route is not expected to become a major revenue generator in the coming years.

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Distribution Strategy 44.

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Apart from unconventional method, the company hired professionals for sales and distribution and expanded its network beyond South India. CavinKare has its offices in Chennai, Pondicherry, New Delhi, Mumbai and Kolkata along with 2000 stockists, which supply to six lakh outlets.

Distribution Strategy 45.

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Apart from the service charges Cavinkare also gave retailers a Chik Sachet free for every 15 empty sachets they get from the consumer. They give special gift if dealer sale more products in a particular season. They also give discount on bulk purchasing.

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Retailer Promotion 46.

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So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Ultimately, the ball lies in the court of Cavinkares marketeers . It's all about how they approaches the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactivity.

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