Page 1 of 7
Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 08
July 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 393
Rural Marketing – Trends in India
Dr.Manju
Asst. Prof. In Savita Devi Mahavidyalya,Meerut
ABSTRACT: India is second most
populated country in the world after china
with 1.17 billion. In rural area more than
70% of the population i.e. 815 million
resides this makes India as Bharat, a unique
in the terms of rural market. Major
characteristic changes coming in rural
areas in India are income going up,
occupation patterns changing i.e. shifting
from agriculture to manufacturing and
construction. Rural India contributes over
54% of GDP and has share of 55% of
Monthly per capita expenditure (MPCE).
These are the major factors which attract
the companies to rural markets, in addition
to this rural market share is about 34% in
FMCG sector and is growing at 25% in
consumer durables comparing to 10% in
urban market. Rural and semi urban area
contributes about 40% of the sales for auto
industry. Some of the marketing practices in
rural India, Hindustan Unilever initiated
project shakti to create income generation
capabilities for underprivileged rural
women. They distribute range of mass
market products earning Rs.700-1000 per
month. In another practice HUL customized
branded packs with low prices SKUs to
create „Bharat pack‟ to penetrate rural
India. It consists of toothpaste, shampoos,
powder and soaps. ITC started e-choupal
which provides information on produce
prices, market location, weather information
and other details. ITC e-choupal are
benefiting 3.5 million famers and generating
revenue of 950millions by selling chemical
and fertilizers. Like this Tata chemical,
Nokia and many other companies are
following innovative marketing practices to
target the customer of rural India. But the
companies are encountering with the
problems and challenges like mindset of
consumer are different from urban, difficulty
in designing and pricing products, culture,
lack of infrastructure, purchasing power,
lack of awareness.
KEY WORDS: Rural Market, Marketing
Practices, Rural India.
INTRODUCTION India stands second in
terms of population in the world after China
with 1.17 billion and fourth largest in terms
of economy. In India more than 70% of the
population i.e. 815 million resides in rural
areas, this makes India called as Bharat. A
great man said “Soul of India lives in the
villages”. Our country is an agro-based
economy and rural India contributes
immense to its GDP. To understand and
draw the line between urban and rural,
National Sample Survey Organization
(NSSO) classifies rural areas as:
Population density not more than
400 per sq.km
75% of male working population
engaged in agriculture and allied
activities
Page 2 of 7
Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 08
July 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 394
Not having municipalities
corporation / board
Planning commission classified rural areas
as towns up to 15000 populations. Today
rural India has become important to
corporate world, all type of companies local,
national and multinational companies are
entering and offering products to rural
consumer. The major reason is the
population of rural India is equal to the
population of US, UK, France, Japan, Italy
and Germany put together. Rural India
contributes over 54% of India’s GDP and
has share of 55% of Monthly per capita
expenditure(MPCE).Rural market share is
about 34% in FMCG sector and is growing
at 25% in consumer durables comparing to
10% in urban market. Rural and semi urban
market contributes about 40% of the sales
for auto industry. Total size of rural mobile
subscribers is 201 millions. Major
characteristic changes coming in rural areas
in India is income going up, occupation
pattern changing. Agriculture is not main
stay it is shifting to manufacturing,
construction, self-employment and services
to generate large part of earning. The main
reasons for increase in demand of different
products and services are attributed to:
reduced debts by government, farm loan
waivers, minimum support price, more
financial institutional offering credit,
government agricredit programmes, and
schemes of NREGA (National Rural
Employment Guarantee Act), Mahatma
Gandhi Rural Employment Scheme. Many
companies target rural market with
customized products / offerings, price,
promotion and distribution to attract and
satisfy them. Hindustan Unilever (HUL)
largest FMCG company targets rural people
with customized branded pack called
„Baharat‟.‟Bharat‟ pack contains
toothpaste, shampoo, talcum powder and
soap, which are daily used produced priced
at Rs.25. HUL launched Brooke Bond
Sehtmand tea for lower end tea market. It
positioned as health supplement, 3 cups of
sehtmand tea gives 50% of Reference Daily
Intake (RDH) of important B vitamin with
affordable pricing of Rs.5 and Rs10 pack. If
has given priority on segmentation also by
giving strong and dark tea for south India
while light color and aroma for north India
according to their preference. HUL chose
cable, satellite and Doordarshan for
promotion and advertisement. It also tied up
with NGOs and ran campaign called
Sehtmand Parivar – Sehtmand Bharat‟ in
schools, for the awareness of the product. In
rural markets HUL to give demonstration on
Lifebouy soap and highlight grease cutting
technology of Vim, done educational and
experiential program called as „Khushiyon
ki Doli‟.
Hindustan Unilever initiated project Shakti
with the involvement of rural self help
groups to educate rural consumers and
distribute mass-market product used by rural
consumers such as soaps, toothpaste,
shampoo and detergent. A Shakti distributor
sells products worth of Rs.10000-15000 per
month and earns income of Rs.700-1000 per
month. This project was started in 50villages
Page 3 of 7
Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 08
July 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 395
of Nalgonda district in Andhra Pradesh and
now spread to 12 states covering more than
50000 villages. It has more than 100000
distributors. HUL‟s Shakti includes Shakti
van which distributes the product to the
distributors and to consumers, social
awareness program through which Shakti
Ammas (distributors) create awareness
programs regarding the products of HUL,
and I Shakti community portal which gives
link to the various activities and information
about products and other thing to the
distributors. They contribute more than 15%
of the company‟s sale in rural India. Godrej
Consumer Products Limited (GCPL)
initiated rural project called „Dharti‟, to
increase rural sales. GCPL wants to increase
the coverage to nearly 50000 villages from
17000 villages at present with the help of
„Project Dharti‟. For rural market, GCPL
customized size of offerings like introduced
smaller packages of it soap Godrej NO 1,
Herbal henna, Hair dye, Talcum powder.
For advertisement it concentrated on
Doordarshan, All India Radio (AIR),
regional TV Channels and Vernacular
publishing. As part of Co-branding exercise
for its, hair color „Expert‟, GCPL has tied
up with 50000 barbers and saloons in nine
states. Brand Expert will carry on all the
fixtures in the saloon and GCPL will
produce saloon with grooming kits such as
hair dye, mixing brush, bowl, talcum
powder and shaving cream. This is done
because barbers act as opinions leaders in
rural areas for grooming products. Godrej &
Boyce introduced a nano refrigerator named
as „Chotukool‟, co-created with help of self
help group women. The main features of this
refrigerator are it does not have a
compressor, runs on a battery, utensils and
bottles needs to be loaded from top, capacity
is 43 liters, it weighs about 7.8 kg and costs
only Rs.3200. this was for rural market co- created with village women through several
rounds of modifications and feedbacks.
Chotukool is distributed through micro
financial institutions (MFIs). Godrej has
more than 100 retailers in 77 villages selling
chotukool refrigerator. Retailer earns
commission of Rs.150 for every sale of
refrigerator. MFIs are playing an important
part in distribution of part in rural markets.
MFI sells Hindustan Unilever water
purifiers „PureIt‟ and „Bharat Petroleum
India‟ company‟s cooking stoves „oorja‟.
Metro cash and carry (whole sale chain) in
Hyderabad sells its large range of products
through SKS microfinance team. They take
order from kirana stores for products like
soaps, detergents, shampoos, toothpastes,
pulses and send through GPKS devises to
Metro which in turn service these orders.
Many retailers are satisfied and happy as all
types of orders are taken and delivered at
doorsteps at lower prices than other mandies
and wholesale markets. Nokia and Bharati
Airtel sold Nokia 1650 model with Airtel
connection with the help of SKS in the
villages of A.P and Karnataka where mobile
penetration was zero. They also offered
finance Rs.85. per month for 25
installments, within few months penetration
was 30%. Western Union money transfer
firm has more than 6.6 million consumers in
India. About 70% of the business comes
