's Perspectives
Posted on 23 October 2004

Before gamboling into issues like where the Indian rural market stands and the opportunities for corporates to explore there... let's look at the definition of urban and rural India. The Census defined urban India as - "All the places that fall within the administrative limits of a municipal corporation, municipality, cantonment board etc or have a population of at least 5,000 and have at least 75 per cent male working population in outside the primary sector and have a population density of at least 400 per square kilometer. Rural India, on the other hand, comprises all places that are not urban!"

Now for some facts and figures. The Indian rural market today accounts for only about Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead.

Time and again marketing practitioners have waxed eloquent about the potential of the rural market. But when one zeroes in on the companies that focus on the rural market, a mere handful names come to mind. Hindustan Lever Limited (HLL) is top of the mind with their successful rural marketing projects like 'Project Shakti' and 'Operation Bharat'. The lynchpin of HLL's strategy has been to focus on penetrating the market down the line and focusing on price point. Furthermore, activating the brand in the rural market through activities, which are in line with the brand itself, is what sums up HLL's agenda as far as the rural market is concerned informs MindShare Fulcrum general manager R Gowthaman. Amul is another case in point of aggressive rural marketing. Some of the other corporates that are slowly making headway in this area are Coca Cola India, Colgate, Eveready Batteries, LG Electronics, Philips, BSNL, Life Insurance Corporation, Cavin Kare, Britannia and Hero Honda to name a few.

Khaitan fans' ad on a horse cart
Wheel's wall painting

We can safely say that until some years ago, the rural market was being given a step-motherly treatment by many companies and advertising to rural consumers was usually a hit and miss affair. More often than not, the agenda being to take a short-cut route by pushing urban communication to the rural market by merely transliterating the ad copy. Hence advertising that is rooted in urban sensitivities didn't touch the hearts and minds of the rural consumer. While, this is definitely changing, the process is slow. The greatest challenge for advertisers and marketers continues to be in finding the right mix that will have a pan-Indian rural appeal. Coca Cola, with their Aamir Khan ad campaign succeeded in providing just that.

Lifebuoy's wall painting in rural India

Corporates are still apprehensive to "Go Rural." A few agencies that are trying to create awareness about the rural market and its importance are Anugrah Madison, Sampark Marketing and Advertising Solutions Pvt Ltd, MART, Rural Relations, O&M Outreach, Linterland and RC&M, to name a few. Also, the first four agencies mentioned above have come together to form The Rural Network. The paramount objective of the Network is to get clients who are looking for a national strategy in rural marketing and help them in executing it across different regions.

Interestingly, the rural market is growing at a far greater speed than its urban counterpart. "All the data provided by various agencies like NCAER, Francis Kanoi etc shows that rural markets are growing faster than urban markets in certain product categories at least. The share of FMCG products in rural markets is 53 per cent, durables boasts of 59 per cent market share. Therefore one can claim that rural markets are growing faster than urban markets," says Sampark Marketing and Advertising Solutions Pvt Ltd managing director R A Patankar.

"Yaara da Tashan..." McCann Erickson's ads with Aamir Khan created universal appeal for Coca Cola

Coca-Cola India tapped the rural market in a big way when it introduced bottles priced at Rs 5 and backed it with the Aamir Khan ads. The company, on its behalf, has also been investing steadily to build their infrastructure to meet the growing needs of the rural market, which reiterates the fact that this multinational has realised the potential of the rural market is going strength to strength to tap the same.

In 2000, ITC took an initiative to develop direct contact with farmers who lived in far-flung villages in Madhya Pradesh. ITC's E-choupal was the result of this initiative.

Clearly the main challenge that one faces while dealing with rural marketing is the basic understanding of the rural consumer who is very different from his urban counterpart. Also distribution remains to be the single largest problem marketers face today when it comes to going rural. "Reaching your product to remote locations spread over 600,000 villages and poor infrastructure - roads, telecommunication etc and lower levels of literacy are a few hinges that come in the way of marketers to reach the rural market," says MART managing director Pradeep Kashyap.

Citing other challenges in rural marketing, Patankar says, "Campaigns have to be tailor made for each product category and each of the regions where the campaign is to be executed. Therefore a thorough knowledge of the nuances of language, dialects and familiarity with prevailing customs in the regions that you want to work for is essential. The other challenge is the reach and the available means of reaching out to these markets, hence the video van is one of the very effective means of reaching out physically to the rural consumers."

The fact of the matter remains that when compared to the Indian urban society, which is turning into a consumerism society; the rural consumer will always remain driven by his needs first and will therefore be cost conscious and thrifty in his spending habits. "Decision-making is still conscious and deliberated among the rural community. But nevertheless, the future no doubt lies in the rural markets, since the size of the rural market is growing at a good pace. There was a time when market predictions were made on the basis of the state of the monsoon but this trend has changed over the years; there is a large non farming sector, which generates almost 40 per cent of the rural wealth. Hence the growth in the rural markets will be sustained to a large extent by this class in addition to the farmer who will always be the mainstay of the rural economy," affirms Patankar.

"Although the melting of the urban - rural divide will take a while, this is not for want of the availability of the means but for want of the rural consumer's mindset to change; which has its own logic, which is driven by tradition, custom and values that are difficult to shed," he points out.

Satellite dish antennas reach rural India

Fulcrum's Gowthaman says, "The biggest impending factor or deterrent on rural monies going up is that there is a general sense of trying to benchmark cost per contact (CPC). The television CPC is going to anyways be cheaper to rural CPC and unless and until the volume - value equation turns the other way round, you will not be able to spend disproportionate monies in the rural market."

Typical shop in rural India stocked with sachets, etc

For HLL, a one rupee or a five rupee sachet or the Kutti Hamam (the small Hamam) helps in giving the consumers a trial opportunity. While it does help in generate volume but not in terms of values. "Till the time that volume - value equation is managed better, the CPC is preventing anybody to look at rural at a large scale activation programme," reiterates Gowthaman.

Ultimately, the ball lies in the court of rural marketers. It's all about how one approaches the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactivity.

Anugrah Madison's chairman and managing director RV Rajan sums up, "There is better scope for language writers who understands the rural and regional pulse better. I also see great scope for regional specialists in the areas of rural marketing - specialists like Event Managers, Wall painters, folk artists, audio visual production houses. In fact all those people who have specialised knowledge of a region are bound to do well, thanks to the demands of the rural marketers."

So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. Progress has been made in this area by some, but there seems to be a long way for marketers to go in order to derive and reap maximum benefits. Moreover, rural India is not so poor as it used to be a decade or so back. Things are sure a changing!

Also read:
Interview with Anugrah Madison MD & chairman RV Rajan

Case Study in Rural Marketing: Dalmia Consumer Care

(Pic courtesy:,,


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