Rural Marketing Strategies-for Fmcg

Topics: Marketing, City, Village Pages: 9 (2744 words) Published: November 25, 2010

It’s not only the grass is greener in the country side, that’s also where a chunk of corporate top line actually comes from. It’s time to tap the rural gold mine.
The Hindu Business Line
Rural marketing is the much talked subject for the business establishment. A decade ago rural market was seem to be unstructured and this was not found to be a target location of the corporate. This is due to the hurdles such as illiteracy, lack of technology and other factors leading to the poor reach of products. But now “Go Rural” is the slogan of marketing gurus after analyzing the socio economic changes in villages. With the changing marketing scenario, the corporate marketing strategies need to be reshaped in order to have an increased awareness among consumers and the overall development in the rural sector. The 4 P’s of rural marketing which is a hit in the cities might not work in the rural areas. To promote brands in rural markets require special dealings. Consumers have graduated to branded products with increased affordability as a result of increasing rural income. Rural market is one of the best opportunity for sector in India.. In this study the focusing is on the strategic issues of FMCG companies in rural marketing. Introduction:

Nirma was the first FMCG Company which initiated and produced goods according to the rural consumers in 1970. Nirma’s entry changed the whole Indian FMCG scene. It became a great success story and laid the road map for others to follow. (Pravin Tripathi, 2009) A number of companies in FMCG have adapted strategies to expand their base in rural market. Among these that have made headway are Hindustan lever, coco cola ,LG electronics, Britannia, Colgate Palmolive The ASSOCHAM study, which analyzed FMCG said the FMCG will be witnessing more than 50% of its growth in the rural and semi urban segments by 2010 and these markets presented a market size that is 3 times bigger than the urban market .The rural market has not been impacted by the global economic slow down, according to a recent study by Rural Marketing Association of India (RMAI) . Rural areas are pushing the demand for the fast moving consumer goods on account of rising rural income and better penetration of FMCG companies in these areas.

Penetration % Of Fmcg Goods in Rural Markets: (Source: HLL investor meets 2006)

Category All India % Urban % Rural %|
Deodorant 2.1 5.5 0.6|
Tooth paste 48.6 74.9 37.6|
Skin cream 22 31.5 17.8|
Shampoo 38 52.1 31.9|
Utensil cleaner 28 59.9 14.6|
Instant coffee 6.6 15.5 2.8|
Washing powder 86.1 90.7 84.1|
Detergent soap 88.6 91.4 87.4|
Toilet soap 91.5 97.4 88.9|

Thus although the rural market may be alluring, tapping the vast potential calls for adopting the appropriate marketing mix strategies, making psychographic analysis to meet the challenges.

Review of Literature:

Mander Narsh, Dhumal Avishkar Tayade & Akita Khander in the article on “Rural marketing and understanding the consumer behavior & Decision process says “ Buying decision of the customers of different age occupation differs from rural to urban area. The rural marketing has shifted its promotional mix strategies from conventional methods to mass media & T.V advertisement. The perception of improved social status due to the use of branded product is also one of the major influences on the buying process.

Sandip Anand, Rajneesh Krishna in their article, “Rural brand preference- determinants in India” clearly discusses that if any FMCG brand (National or global) has to get established in rural markets of India, they have to differentiate on quality, value for money and sense of belongingness with customers....
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