Page 162 - DMGT401Business Environment

Unit 7: Socio-cultural Environment

local variants that are cheaper but look like the original product. There are many Colgates, Notes
Lifebuoys (imaginary names), etc., and their packing is similar to the original brands.
These brands give a good margin to retailers so Colgate loses its sales to Colgate.
7. Less Retail Outlets: In rural markets there are few retail outlets and most villages don't
even have any, except maybe a pan-bidi shop. In this situation the bargaining power of
retailers increases because they play a critical role in selection of the brand by a village
consumer. These retailers also keep few brands, particularly those which give them a
higher margin. And their products can sometimes be fake.
8. Seasonal Demand: Demand for goods in rural markets depends upon agricultural
conditions. To an extent, it depends upon the blessings of mother-nature. Even if mother
nature blesses the farmer with good rains, demand is not round the year but only at the
time of harvesting.
9. Different Way of Thinking: There is a vast difference between the lifestyle of the urban and
rural populations. Governed by tradition and generally resistant to change the rural mind
represent different paradigm of thinking.

Notes Distinctive Features of Rural and Urban Markets

Attribute Rural Urban
Population Density Low High
Occupation Agriculture Trade, Industry, Service
Economy Closed and less Monetized Open and Monetized
Infrastructure Poor and Weak Abundant and Strong
Attitude to Modernization Tradition bound Ready for Adaptation and
Change
Family Structure Joint Nuclear
Possession of House Hold Low High
Assets
Mobility Low High
Literacy Low High
Exposure Low High
Attitude to Life Fatalistic Scientific
Manufacturing Activity Low High
Distribution Outlet Fewer More

Source: Dogra, B.S., Marketing Management and Rural Marketing, Commonwealth Publishers, New
Delhi, 1990

7.4.2 Corporate Projects in Rural Areas

Project Shakti

Project Shakti is a Hindustan Lever Ltd (HLL) rural self-help group initiative to push the
penetration of its products to reach areas of low access and low market potential.

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