Rural Marketing

of Services
Dr. Satish Jangra
2009A229M
 Overview
• The rural market in India is a huge unorganized market as well
as much of it is still untapped in various domains.
• A huge scope for services exists in these markets where still
major companies have directed their focus on.
• Major of Indian population exists in rural segment, prospects
of huge demand exists for the products.
• But the demand and supply pattern in the rural segment is
majorly different than those in the urban segment.
 Urban vs Rural
This difference is due to vast difference in:
• Income level
• Expenditure capacity
• Taste and preferences
• Educational level
• Social, Cultural and environmental
 Urban vs Rural
• These differences results in Gaps between Service provider
and the consumers/customers in both the market segments.
• Hence a service provider clearly needs to understand these
gaps and the strategies to fill these gaps effectively.
• Therefore the mantra for successful strategy implementation in
rural markets for service delivery is “Think Global Act Local”
 Areas of Potential
1. Agricultural consultancy
2. Banking, microfinance and loan facilities
3. Healthcare
4. Telecomm services
5. Automobiles Services
6. T.V. Channels Services
7. Travel and reservation Services
8. Low Cost Hotels
9. Event Managements
10. Beauty Parlours
11. Affordable Movie theatres
12. Educational and Career consultancy
 Agricultural consultancy
Rural customers require proper consultancy services about the
• best methods (of farm practice),
• timings and seasons,
• technology, tools,
• prices and best markets for selling their farm products.
 Banking, microfinance
and loan facilities
• The rural market has huge potential for
banking services for providing following
facilities at affordable prices:
o Agricultural loans
o Educational loans
o Housing loans
o Savings accounts and safe deposits
o Automobile loans
o Personal loans
 Healthcare
• A large population in India resides in Rural areas and lack
proper facilities for proper health care.
• The availability and location of these services is of great
concern as most of the areas either do not have any or many
rural and remote areas needs to be dependent on very few and
distantly located Hospitals.
 Telecomm services
• Due to increased awareness and improved telecomm
infrastructure across India, the demand for telecomm (Fixed
and wireless) and internet services have increased drastically.
• Even the government’s policies for reduced tariffs, call rates,
lesser mobile handset prices and private participation
involvement has helped in increasing the level of competition,
continuous improvement in technology and thus has resulted
in the growth of the rural telecomm market.
• Hence the rural market has now become attractive and
lucrative for many National and Global telecomm companies,
who now are focusing more on this huge untapped market.
 Automobiles Services
• There has been a huge increase in the number of two wheeler,
four wheeler and Agricultural tools and vehicles in past few
decades because of reduction in prices and government
support to the rural population.
• This has given rise to a new business for providing
maintenance and repair services to these vehicles with more
attractive service quality, location and availability.
• This segment has huge potential in the upcoming trends of
services to the rural markets.
 T.V. Channels Services
• Due to the increased awareness, arenas of interest, leisure
requirements, and number of entertainment options like
televisions and computers due to reduced & affordable prices,
the demand for entertainment services like T.V. entertainment
channels have increased.
• This provides a huge potential for cable and Direct to Home
services providers to tap the rural markets to meet their
demands. Many companies have already gained profits by
targeting rural markets which include Airtel (DISH TV),
Reliance (BIG TV), and Tata (SK
 Tourism, Travel and
reservation Services
• The travel and reservation booking and organizing services for
booking train, busses, taxies and tour consultancy has also
been observed to create a huge demand in last few decades as
more and more rural population need to mobilize for business
and personal needs. Hence these services hold a huge potential
for service providers.
 Low Cost Hotels
• Due to increased mobilization because of business and
personal needs, there is also increased demand for hotel and
lodging services to the travellers but majorly driven by the
pricing of such services and facilities.
• Hence provide a great platform for the service providers to
focus on these demands to capture a big untapped market.
 Event Managements
• The rural population are majorly involved in celebrating and
organizing festivals, which require lightning arrangements,
venue decoration, food, lodging, transportation, catering and
event planning etc. for:
o Family gatherings, Marriages, engagements, birthday parties,etc.
o Festivals like Diwali, Onam,Christmas, lorhi, Eid, Dushera, Kannada Rajamahotsava,
Navratri, Garba and Dandia mahotsava etc.
o Religious/Caste based events like poojas, various ceremonies, etc.

• Hence these services also have great potential to meet the rural
customer’s demand for event management.
 Beauty Parlours
• As there has been major improvement in the quality of life style
and increased awareness among the rural customers (especially
females), there has been great demand observed for beauty
products and services.
• A huge increase in the demand for FMCG products like
shampoos, beauty soaps, beauty creams, cosmetics, etc. has also
been observed lately in rural India.
• This market is still dominated by unorganized and local players
who lack adequate tools, methods, skills, process, technology and
beauty products to meet the demand of rural population.
• Hence focusing on this segment would be a profitable business
for any company.
Affordable Movie theatres
• Till now the entertainment service providers for movie
theatres at affordable prices in rural markets are dominated by
local and unorganized players who lack proper facilities and
infrastructure as well as quality delivered. Focusing on this
market is a good profitable business
 Educational and Career
consultancy
• The rural markets lack adequate and quality educational
services which are majorly catered by government agencies
and bodies.
• But due to lack of proper infrastructure, expertise, knowledge,
talent, funds and participation of the service provider, this
sector is unable to meet the desired level of service
expectation of the rural customer for career building.
• Hence there a great business opportunity for any company if it
is able to fill this gap effectively and would also be imparting
its social responsibility to the growth of the society and
country.
7 P’s analysis of Rural and
Urban Marketing
• The most potential among all the above described services is
the Rural Banking Service. Lets us examine this sector on the
basis of difference between Rural and Urban markets on the
grounds of 7 P’s of Marketing.
 Product
• The Products (Services) provided to Rural customers differ
from that of urban customers as rural segment have more
demand for agricultural loans, lower limits for savings
accounts, microfinance, lower amount of loans for education,
automobiles, small & medium scale industry and personal
loans.
• The duration for these loans, schemes and capacity also
differs from that of urban customers.
 Price
The price of these services as expected by the rural customer is
lesser as compared to urban customer due to the fact that income
level as well as savings pattern of the rural customer are lesser.
The risk appetite and affordability is also a matter of concern for
the rural markets as they are lesser as compared to urban markets.
 Place
The place of availability is of very intense concern in rural
markets due to lack of adequate and proper transportation
facilities in rural India. The rural customers face major problems
with the availability of service location in vicinity and thus are
reluctant to derive benefits due to lack of travel support.
 Promotions
• The promotional strategies in rural marketing needs to be
more personalized and simple as compared to the urban
markets which needs to reach more remote areas as rural
markets lack more in means of communications and
technology.
• The promotional tools also need to be customized according to
the regional languages so that it clearly states the service
details and benefits.
 Physical evidence
• The physical evidence provided to the rural segment differ
from that of the urban markets as they need to be more simple,
colourful, artistic and personalized as most of the rural
customers lack adequate education or low educational
background and thus need to be clearly explained about the
features and benefits of the services thus provided.
 People
• The people and staff appointed for the service delivery for rural
banking services needs to be properly selected, recruited and
trained to properly understand the rural customer’s needs and
requirements.
• They need to be made well aware of the regional, cultural,
social, economic and technological needs of the customers.
• The employee involvement in the service delivery to the service
(banking) sector is more in rural markets than urban markets as
the employees need to constantly educate and assist the
customers about the service process, price, product and
simultaneously communicate the benefits as well as the
precautions and risks involved with the services being offered.
 Process
• The process of rural banking differs from that of urban
banking sector as it needs to be more simple and thus less
documentation involved and more customized as per the
economic capacity of the customers.
• The process of banking in rural markets is observed to be
more affected by the Government policies and rural customer
psychology driven.
• The process also need to be timely revived and revised to
remove any complexity arising due to inclusion of new
economic policies and changing demand & supply patterns.
 Do’s for Rural Banking
• The focus of the service quality should be customer driven and
hence need to be customized as per the rural requirements of
customers having low income group as major target group.
Hence more of benefits driven by the customer from savings
schemes should be included in the Services provided through
accounts maintenance with the banks.
• The service providers should be clearly aware of the local
languages, culture and behaviour of the rural customers. Thus
the inclusion of local employees would be beneficial for the
banks to deal effectively with the customers.
 Do’s for Rural Banking
• The banks should be able to provide these banking services such as loan
and microfinance services at lowest and most profitable interest rates
with flexible and customized repayment options to the customers.
• The Bank need to clearly understand the best possible location for its
setup and operations as the location and facility layout of the service
provider plays a very significant role in rural banking because the rural
areas do not have sufficient transport facilities like urban markets.
• The customers should be made aware clearly about the services provided
by the bank through effective physical evidence and promotions that
should be made as simple as possible to the rural customers to understand
properly. The assistance should be provided regularly to the customers to
educate them about the current as well as prospective facilities and
benefits derived from the banking services provided.
 Don'ts for the Rural
Banking
• Do not put much focus on providing any complex and
unessential services like corporate loans and credit card
facilities as still the market demand for such services are much
lesser as compared to other banking services.
• Do not use any illegal or unethical means for repayment of
loans and other services as this would result in more of
customer dissatisfaction and grievance which would harm the
brand equity and image of the banking company.
• Do not provide services to the customer before properly
educating the customer about the details product and process
of the service so as to avoid confusion and discrepancy.
 Don'ts for the Rural
Banking
• Do not focus on the short term profitability but the
bank needs to focus on the building long term
relationship with the customer by putting more
concentration on:
o Service quality
o Service recovery
o Reach to the customer and building prospective future customers
o Improving market share
o Building Brand loyalty
o Providing new facilities as per the customer needs and requirements
 s !!
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