Opening the Rural Eye


Dr. R. Satish Chandra
Asst. Professor and Researcher
Department of Management Studies
AMC Engineering College
Visvesvaraya Technological University
18 KM Bannergatta Road, Bangalore

Ms. B. Sowmya Shankar
Research Scholar
Institute of Development Studies,
'Leela Vihar' University of Mysore

In country like India, where the 70% of the people live in rural area, the rural market holds a lot of marketing potential. There is a wide spread difference in the standard of living between urban and rural India. In order to launch products and develop advertising for rural market there is a need to understand both the rural context and also the consumer.

This article provides the opportunity to explore consumers and the type marketing programmes which emphasizes the advertising patterns on consumer dividend that has been successful in emerging markets and more specifically in rural India. First it has been discussed about the marketing opportunity for companies in rural India and then we will focus on some of the unique characteristic of rural India and how this translate into innovative advertising programmes for companies entering the rural market and finally to see the advertising in rural area.

The marketing opportunity for companies

Under penetrated rural market

India is the second largest consumer market in the world with over 1 billion potential consumers and therefore, many companies are now seeing India as a fertile ground for expansion and growth of their market.

Rural and urban potential

Rural urban profile



Population 2001-02 (mn household)



Population 2009 10 (mn household)



% Distribution (2001 02)



Market (Towns/Villages)



Universe of outlets (mn)



                                    Source: Statistical Outline of India (2001-02), NCAER

Penetration and per capita consumption
Rural - urban penetration (2002)


Market size (US $ million)

Urban penetration (%)

Rural Penetration (%)

Total penetration (%)

High penetration categories > 50%: Drive up gradation and consumption

Fabric wash





Personal wash





Packet Tea





Low penetration categories: Drive penetration











Hair wash





Talcum powder





Branded Atta





Instant coffee





R & G Coffee




















              Source: HLL, Indian Readership Survey.

The NCAER (National Council for Applied Economic Research) study throws some interesting information on the Indian consumer and there behavior and purchasing power.  The following inference can be drawn for the consumer study. First of all the consumers were classified by their propensity to consume. At the Bottom end of the scale are consumers who are in the market for manufactured essential consumables and basic durables. At the top end of the scale is a relatively small but rapidly growing segment for branded international products ranging from automobiles and electronic to cosmetics and garments, often at international price. The middle segment is itself highly differentiated, depending on the products and price sensitive, requiring a targeted approach to product design and pricing. Over the years, the bottom layer is expected to more narrow further while the top level is expected to expand.

India's consumer classes

Distribution of people income-wise

Income groups




Rural No.



Rural No.






























              Source: HLL, NCAER.

Projection of Household income distribution for 2015

Very Rich

5 %

Consuming class








The NCAER study also highlights that the key to growth lies in the rural area, where over 70% of India live. During the period of 90's the main marketing phenomenon is to provide volume growth to all leading companies. Higher rural income driven by the agricultural growth, education, penetration of television has induced the propensity to consumer branded and value added products in rural areas.

Till 1994 Indian government protected the domestic economy and public sector from regulation, and excessively high tariffs. This resulted in low quality product, lack of product differentiation, high price for high quality products. This has leaded some of the companies to monopolize the market. But after the India joined the world trade organization and adopted the Liberalization, privatization and Globalization policy and opened its market for foreign producer there has been a significant change in the situation. This market-oriented reform has helped to create a favorable environment for Multinational Companies to enter the Indian market.

Thus, the impact of globalization has been felt in rural Indian as much as in urban. But it is a slow phase. It has its impact on target groups like farmers, youth and women. Farmer, today has to 'keep in touch' with latest information and maximize at the both ends (input and output).

Challenger and innovations in Rural Markets

The Indian rural market with its vast size and demand base offers a huge opportunity that Multinational Companies cannot afford to ignore.

Expanding the market by tapping the countryside, many Multinational Companies are entering into India's rural markets. Among those that have made some advances are Hindustan Lever, Coca-Cola, LG Electronics, Britannia, Standard Life, Philips, Colgate Palmolive and the foreign-invested telecom companies.

The Indian rural market offers a huge opportunity that Multinational Companies cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. As a result of the growing prosperity, fuelled by monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has become large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income.

This has gained an importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market constitutes to 70 % of toilet-soap users and 38 % of all two-wheeler purchased.

The rural market constitutes half of the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, the rural market for FMCG products is growing much faster than the urban counterpart. The rural market may be beguiling but it is having its own 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; Lack of formal retail and distribution network; relative cheapness of labour and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways.

More and more Multinational Companies are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 A's).


The foremost challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians 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, India's 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 serve remote village, stockists use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future market, has evolved a hub and has spoke a distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, and the large distributors act as hubs. These distributors supply, once a week and the smaller distributors supply the adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices.

A Brief description of the Indian FMCG industry
Product wise production




Key players

Share of market
leader (%)

Household care



Fabric wash market

Mn tones


HLL, P&G, Nirma, SPIC


Laundry soaps/bars

US$ mn



Detergent cakes

Mn tones



Washing powder

Mn tones



Dish wash

US$ mn




Personal care


Soap & Toiletries

Mn tones


HLL, Nirma, Godrej


Personal Wash Market

US$ mn


HLL, Nirma, Godrej


Oral care

US$ mn


Colgate Polmolive, HLL


Skin care & cosmetics

US $ mn


HLL, Dabur, P & G


Hair care

US $ mn


Marico HLL, CavinKare P&G,
Dabur, Godrej


Feminine hygiene

US $ mn


P&G, Johnson and Johnson


Food and Beverages


Bakery products

Mn tones


Britannia, Parle, ITC



000 tonnes


HLL, Tata Tea



000 tonnes


Nestle, HLL, Tata Tea


Mineral water

Mn crates


Parle Bisleri, Parle Agro, Coca
Cola, Pepsi


Soft drink

Mn crates


Coca Cola, Pepsi


Branded atta

000 tonnes


Pillsbury, HLL, Agro Tech, Nature Fresh, ITC


Health beverages

000 tonnes


SmithKline Beecham, Cadbury, Nestle, Amul


Milk and dairy products

US$ mn


Amul, Britannia, Nestle'



US$ mn


Cadbury's Nestle'


Culinary  products

US$ mn


HLL, Nestle


Edible oil

Mn tones


Ruchi Soya, Marico, ITC, Agrotech


              Note: * R&G
              Source: ORG Marg, AC Nielson, FICCI, India Stat and HLL.


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, is among the first Multinational Companies to realise the potential of India's 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 mutiserve sachet of 200 gm priced at Rs 15.


The third challenge is to, gain acceptability of the product or service. Therefore, there is a need to offer the 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 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. With large parts of rural India inaccessible to conventional advertising media only 41 per cent rural of the households have access to TV and building awareness is yet another challenge.

Fortunately, the rural consumer has the same likeness as the urban consumer example movies and music. 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 and has reached 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 in advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas.

The key dilemma for Multinational companies eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. Mr Carlo Donati, Chairman and Managing-Director, Nestle, while admitting that his company's product portfolio is essentially designed for urban consumers, cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive. "Any generalisation" says Mr Donati, "about rural India could be wrong and one should focus on high GDP growth areas, be it urban, semi-urban or rural."

To overcome these expensive marketing strategy many companies have selected the more profit at low margins this was achieved by mass marketing.

The Mass marketing through television and other form of media is often seen as a more cost efficient means to reach a large number of potential consumers in developed markets.

Knowing all these aspect of marketing like, 1) Low Per Capita Income; 2) Lack of formal retail and distribution network; and 3) relative cheapness of labour. Along with the 4 A's the companies have reached the rural market but in the lethargic rate. To overcome this lethargic rate companies has adopted different market strategies one of these strategies was the promotional activity. Thus the very next challenge faced by these companies is to promote their product though mass media.

Companies cannot rely on conventional advertising techniques, particularly in Indian rural market where only one in every three households own television set and more than a half of all villagers are illiterate. Instead, companies need to turn to more innovative methods of advertising to reach their potential customer base. The result has been consumer video vans which carry infomercials to rural village. Villagers are invited to view the infomercial which incorporates the new product into an aspect of daily life. The potential customer are subsequently given a demonstration of the product, for example, tooth paste and tooth brush, and then provided free samples. The van returns in the following month to reinforce the sales pitch and to make sales.

Another strategy consumer goods companies have used to reach the rural mass market is to market at large festivals.

Two year ago, many companies congregated at the Ganga River for the Kumbh Mela festival where approximately 30 million people were expected to attend over span of month. Companies provided "Touch and feel" demonstration and free samples for consumers as the majority of them were from rural areas, Colgate Palmolive distributed free tubes of herbal toothpaste at the festival to villagers who traditionally used a neem tree sticks. Hindustan Lever Limited marketed its life buoy soap and handed out glasses of Brooke Bond tea. This marketing strategy proved to be extremely effective in advertising to the mass rural market.

Dynamics of Advertising on rural masses: This dramatic change of market is in progress, where villages now used to crack open peanut M&M candies, eat the nut and through away the shell are now demanding chocolate candies that will melt in their mouth not in their hands. Charcoal cleaning teeth are a rare sight, so in the case with twigs of neem (neem) and babul (Babool) tree. Today the ultra bright shine of Colgate or some other international brand of tooth paste holds more appeal than the traditional methods of clearing teeth such as daatun karnaa and musaag lagaanaa, are endangered to being replaced by new expression such as paste karnaa, to brush teeth with paste. Even a sample query such as: where are you from? is not free from the overtones of marketization and globalization in rural discourse. Consumerism and globalization is invading parts of India where, as some would venture to say, time seems to have ceased for centuries. Some years ago, the rural markets 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 advertising 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 greater challenge for advertisers continues to be a finding the right mix that will have a pan - Indian rural appeal. Coca Cola, with their Aamir Khan advertising campaign succeeded in providing just that Corporate are still apprehensive to "Go Rural"

Coca Cola India tapped the rural market in a big way where it introduced bottle priced at Rs.5 and backed it with Aamir Khan advertising. Rural consumers are band loyal and understand symbols better. This also makes it easy to sell look alike. The rural audience has matured enough to understand the communication developed for the urban markets, especially with reference to consumable products. Television has been a major effective communication system for rural mass and as a result, companies should identify themselves with their advertisement. Advertisement touching the emotions of the rural folks, it is argued, could drive a quantum jump in sales.

The challenge in rural advertising is the reach message and the available means of reaching messages 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. 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. This was pointed out by the MART Anugrah Madison in their survey between urban and rural consumer.

The company studied the rural and urban divide and this study was carried out jointly by MART Anugrah Madison surveyed regular T.V viewers among man and women in the age group of 18 to 50 years. The parameters to test are comprehension, believability association with characters featured in the commercials attraction and acceptability and emotional involvement with the commercials taking two product categories (consumer goods and durable goods). Among the consumer goods two product namely, Babool Tooth Paste and Navarathna Hair Oil both commercials appealing urban and rural consumers. And among Durable goods Samsung Plano Digital flat TV and Asian Paints. The study was conducted in Chennai and New Delhi taking 40 rural and 20 urban respondents.

The study revealed the difference in urban and rural comprehension often advertised are two sleek, consumer goods and perceived very differently by the rural viewer. For instance in the case of Babool advertising several rural viewers expressed confusion incomprehension and did not associate with the young couple, child and dog in the story board. One of the oft asked question why a dog was being shown for a tooth paste advertising.

The Navratna Hair Oil advertising generated disbelief, " if you have a headache or body ache and are to use navratna thailam to remove it, you would not be dancing", was a view expressed both by urban as will as rural audience. In fact, the presence of Govinda (noted cine actor) as the main dance was lost on the rural viewers.

The Samsung bio ray ad too suffered from the believability factor among both rural and urban viewers. While urban viewer liked this feel of the rose petals emerging from the Samsung TV screen, they felt that the advertiser should state clearly what they were trying to say. Rural viewer felt totally left out. "The ad is for people in Chennai", "It's only meant for the rich and educated were some of the south Indian rural response. "The north Indian rural viewer showed even less interest, "pata nahi kis cheez ka hai". Said some (I don't understand what the thing for).

The Asian Paints advertisement depicting a house that does not look run down with time, while the owner's car does and the family enlarges has a comprehension crisis in terms of product identity, but it appealed to both audiences. The advertisement was easily recalled, but there was no recall on the sub brand. In rural context the storyline remained with viewers, but they could not make out the product. Some thought that the house was being advertised.

The study gives us insight into several aspects of marketing as it can be sent that, the urban audiences have a good comprehension of the commercials which they see on the Television, the same cannot be said of the rural viewers. A cross section of the rural audience did not relate to the spots and even if they had, there was doubt, fear or even strong views on the right and wrongs of what was being shown.

It is very clear that the rural folk find fast paced films going over their head. They cannot be reduced by quirkier gimmicks or slick advertising. Similarly, they refuse to accept unrealistic situations or characters which are very often used by advertisers as a 'creative license' to enhance the impact of spot. In fact, they also get confused if unrelated characters appear in a film.

While the rural viewers like good entertaining films, they expect it to be also rational. Similarly, they do not relate to icons who are not from their region.

Another highlight coming from the study is that what works in the north may not work in the south. This reinforces the need for region specific communication while dealing with the rural audiences.

Finding of the survey conducted by MART and Anugrah Madison
Consumer goods
Babool and Navaratna hair oil: Attraction and acceptability


Navratna hair oil





Only music good

The song and dance is good

Good presentation

Music is very good it is nice to hear

Message not clear. Not explained properly

I like the child. It is smiling nicely

Entertaining thanda thanda cool cool

The ice cubes and the music is given a chill feeling

Runs baboolki to din tumhara very quickly

Dancing with dog! Why a dog is coming in this tooth past advertisement

Govinda ka dance acchahai or gana bhi achhahair

Entertaining attractive thanda thanda cool cool

Interesting and draws attention

Entertaining and attractive subah baboolki to din tumhara


Navaratna tel lagane se sardad dur hota hai

Consumer durable goods
Asian paints and Samsung TV: Attraction and acceptability

Asian paints


Samsung TV






Mr. Chandru's friend who comes in motor cycle is good

Kalakare chandru, pramadham it has become very popular

The race from TV look good

Yes, the couple looks attractive. I like the red flower which come from the TV

When he says padmadham. It sounds good

The friend character. I like him very much. His acting is good

The complete mood and acting is good

Only Chennai people can understand the advertisement

Funny hwa sunil babu badhiya hai

The whole advertising is attractive

The narration is good

It is only for educated top people

Anth mein asian paints nahi bolta to pata hi nahin chalta

Cannot understand, no interest

Boring, band statement recall


Ghar, gadi aur aurat do dikhat hai

Jo kahana chahte hain saaf saaf

Cannot understand. No interest


Pata nahin kis cheez ka advertisement hai


This article indicates that the rural urban divide is very much there and it will take some time before it zoom and zaps in the rural folk to catch-up with the urban counterpart in relation to the comprehension of TV commercials. Though it is generally believed that the top of the rural hierarchy consist of opinion leaders and educated village youth have some understanding levels as the urban audience, their number is small. A large majority of the rural folk has a mindset that is different from the urban viewers and hence there is a need to tackle them differently. Marketers aiming to target their band commercials to both urban and rural audience will do well to pre-test the spots and that the spots communicate what is intended for the targeted viewers. The companies should explore the key opportunities and challenges of advertising rural India. To be successful, these companies need to be innovative, dogged and culturally sensitive in developing advertising message strategies.


Adesara, Hetal (2004). "Making In Roads In The Hinterlands" Perspectives, editorials,

Bhatia, Tej K. (200). "Advertising In Rural India: Language, Marketing Communication, and Consumerism". Tokyo, Japan Tokyo Press ISBN 4-87297-782-3.

Lakshman, Nandini (2003). "India Inc Eyes Rural Market". Business, special

Mehra, Preeti (2003). "Advertisement Perception Varies Among Urban Rural Audiences". Business line (September) Internet edition, The Hindu group of publication,

Rajan R. V. (2004). "The Rural Urban Divide Is It Melting?". Bangalore, Published in MICA Communications Review, Vol. 1 (3).

Tan, Jacqui (2004). "Opportunities, Challenges And Innovations In Marketing Consumer Goods to Rural Indian an Observation of a First Time Visitor". http://scannergroup.

Dr. R. Satish Chandra
Asst. Professor and Researcher
Department of Management Studies
AMC Engineering College
Visvesvaraya Technological University
18 KM Bannergatta Road, Bangalore

Ms. B. Sowmya Shankar
Research Scholar
Institute of Development Studies,
'Leela Vihar' University of Mysore

Source: E-mail October 7, 2008


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