The phenomenal growth of rural market’s during the last decade presents an exciting opportunity. Spending on packaged consumer goods by rural consumers is increasing at a rate of over Rs 300 crores per annum. The total size of the rural market for packaged consumer goods is estimated at around Rs. 2,100 crores today.

This in turn is estimated to be hardly 1 percent of the total net rural income and in-fact translates to per capita expenditure of about Rs 3 per month. It is therefore, a reasonable expectation that the rural market would continue growing to eventually level out at expenditure levels of 9 to 10% of the total net income i.e., a market size of over Rs. 19,000 crores in terms of current rural income.

Amongst the reasons cited for the current size of the rural market are low purchasing power, slow rate of change in attitude of villagers from a conservative traditional approach, high dispersion of settle­ments, poor across and communication facilities.

The rural market has a distinct identity. This is typified by small dispersed settlements distant from urban areas with low infra-structure levels, low population levels, infrequent occurrence of retail out lets and low off take per retailer. Rural consumer behaviour, while undergoing a change, is dominated by a need structure that does not motivate purchase of consumer goods.


The consumers are largely illiterate and have acute seasonality in income receipts. Despite high development costs, due to the factors listed above, the rural market presents the marketing opportunity for the future.

A few companies such as Hindustan Lever Limited began working the rural markets over 30 years ago. Today, the off take of their products in rural markets more than justifies their path breaking approach. Over the last decade there has been an increasing proliferation of brands on village retail shelves.

Leading marketers in both consumer non-durable and consumer durable product segments are going the rural way. With consumer access/distribution being the central issue in rural marketing, the marketing approach of most companies in the past has been largely limited to reaching their product to the village retailer or expanding their distributor/dealer network towards interior markets supplemented by localised promotion.

A number of companies had to also concept sell. An example being Colgate where consumers were induced to shift from using traditional “Datun” to tooth brushes and tooth paste. This was done through localised promotion in form of product demonstration and trials.


These distribution based strategies made sound marketing sense, because product availability is a basic necessity and the operating environment had at most 2 to 3 brands in a product category, competing for the consumers attention. More so, the retailer has traditionally been amongst the few occupation classes of the village scenario, who provided links with the out-side world and retailer push of a brand had sustained credibility.

The rural market environment has however, undergone a marked transformation over the past decade. The retailer who was the key element has had a role change .The development of infrastructure and improved communication links has resulted in the rural consumers today having a greater exposure to happenings in the market place.

The reliance on influences such as the retailer has proportionately been reduced. Also, retailers now have regular receipt of multiple brands. An increasing number of companies are servicing the village markets directly instead of a trickle down scenario where in retailers made their weekly or fortnightly stock purchase visits from the nearest Tahsil/district town.

To get the retailer to push a particular brand is becoming increasingly difficult, that too in an environ where the efficacy of a retail push is decreasing. The presence of duplicate brands is another compounding factor Life boy- is competing with Love buoy, Dabar Amla with Darbar Amla and Tata Salt with Teta salt.


These looks a likes have a localised presence and natural brands often compete with a different set of duplicate brands in energy 3rd district in a state. The duplicate brands usually offer a higher margin to the retailers.

The rural consumer unlike his urban counterpart does not have a built in quality association with products being marketed by leading companies His first exposure to Dabur and to Dabur Amla may well be just a few months before he comes across Darbar Amla.

The consequence is to shift to a strategy focused on promotion and advertising backed up by product distribution. Most conventional media options have a limitation in the rural scenario m terms of efficacy of reach and communication.

The wastage of conventional media is often marked by statistics of coverage based on published data of reach. In reality, the actual reach of conventional media in the rural segment m very low. This is particularly true of the print media-viz newspapers & magazines Female readership of the female media is low even in urban market; in the rural market, it is virtually negligible.


To quote an example, typically in a village with a population of 5000 to 6000 persons the newspaper arrives late afternoon and is found in the village tea shop at the local bank or medial facility if available. The paper would most probably be a daily either published at the state level or at times a district level publication.

Individual subscribers in small villages are virtually non-existence. Reading habits at the venues, where the papers reach largely consist of distribution of various pages of the papers amongst readers which are read during a group discussion.

The reach of TV in the rural segment is limited and largely restricted to Black & White sets In addition to clutter, the viewer is subject to vagaries in power supply in the rural environ Rural marketers have depended a great deal on outdoor media, particularly wall paintings With a limitation of visual communication this medium is basically unreliable, and massages are often over-painted with other messages.

A number of companies such as TTK Pharma Limited have developed advertising films tailor-made for the rural market. Another related aspect is that an ad film for a tea or a popular soap may depict a home, a kitchen or a bathroom with a host of gadgets, which a consumer in the rural interiors would possibly have never seen. The raise level due to this distraction may well present achievement of the objectives of the communication.


Over the past 5 years, alternate unconventional media such as video vans are beginning v find extensive utilisation by rural marketers. An LCV with an enclosed body or a matador becomes a mobile projection room. The rear of the body has a door that opens into a 100 inches screen that can be viewed by as many as 4000 people at a time.

On the body is mounted an electronic video projection system that enlarges a normal VHS recorder image into a clear 100 inches image. An audio system is also mounted on the rear body for amplification of the sound.

The entire system in run or a self generating UPS system to take care of areas where there is no electricity. A moped equipped with a portable audio system is also produced in the van for pre publicity of the film screening. The van generally covers two villages per day. Since it holds open-air shows, film screening begins about 15 minutes after dusk. A one hour entertainment package is shown at each screening.

This comprises of film-songs, dialogues and comedy skits in the vernacular, and is developed to meet the needs of the local population in the area being visited. Communication messages are woven into the entertainment program. In the day light hours the van is used for pre promotion for the shows that are scheduled in the evening and for other promotional activities such as product demonstrations or retailing.


Juxtaposing the continuing growth of rural markets with current advertising inputs the situation is that the market is growing at a very fast rate with most brands still developing a foot hold and advertising being at a very nascent level. An aggressive marketing strategy exclusively formulated towards the rural market would bring substantial returns in the years to come.

With media options available today, a rural marketing strategy while consisting of radio, cinema halls, T.V. and press advertising should provide for substantial deployment of resources towards wall paintings and localised promotion in form of audio visual coverage backed by product presence at markets, rural fairs and rural trade exhibitions.

The coverage of village market through video vans could bring rich returns by utilisation for product trials, sampling, demonstrations and retailing as a precursor for regular servicing of these markets.

Satellite television, battles for prime position on retail shelves, frequent-reworking of strategies to counter new product offering etc. Those providing an exhaustive thrust today would be well entrenched to retain their shares in the rural markets of the future. Today across product categories, marketers have the options of developing their brands into generic product associations in the rural market.