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Rural marketing in India

Urban Maniac


INTRODUCTION
The buzzword today in the marketing industry is ‘rural marketing’. Reportedly
three times that of the European market, the Indian rural market is a huge
untapped resource. The rural market today makes up for only about Rs 8 billion of
the total advertising revenue of Rs 120 billion, thereby controlling around 6.6
per cent of the total share. In a seminar conducted by CII, Prime Minister
Manmohan Singh shared his views on the future prospect of the unexploited
resources of rural India – “My vision of rural India is of a modern agrarian,
industrial and services economy co-existing side by side, where people can live in
well-equipped villages and commute easily to work, be it on the farm or in the
non-farm economy. There is much that modern science and technology can do to
realise this vision. Rural incomes have to be increased. Rural infrastructure has
to be improved. Rural health and education needs have to be met. Employment
opportunities have to be created in rural areas." Given the ongoing changes in the
outlook, habits, purchasing power and recent shifts in attitudes that suggest that
rural consumers are open to urbanization of their markets, many a company have
lately been scurrying hard to channelize these unexploited markets to garner
profits.

WHAT IS RURAL MARKETING?


In a nutshell rural marketing can defined as – the entire process of producing,
developing and marketing of a specified commodity or service specially designed
for the rural market which involves an exchange between the rural and urban
markets for the twin purposes of satisfying consumer demand and achieving
organizational goals. This marketing process is a two- way process between the
rural and urban markets. It can be of the following types –
Rural marketing can be urban to rural – urban marketing in rural areas, viz.
consumer durables, fast moving consumer goods etc.
It can be rural to urban – marketing of agricultural produce in urban areas.
In this process, there are intermediaries like middlemen, govt. agencies etc.
between the rural sellers and urban buyers.
It can also be rural to rural – rural marketing in rural areas.
In order to deeply and effectively penetrate into the market an entrepreneur must
firstly understand that the social construct in a village is lot different than in
a city. People in villages do not understand brands and to them celebrity
endorsements are a driving force. Their consumer patterns indicate that they
prefer purchasing in small quantities. To understand that one needs to know the
profile of a rural customer.
WHO IS A RURAL CUSTOMER?
After conducting various research studies, the INDIAN MARKET RESEARCH BUREAU
(IMRB) and the NATIONAL COUNCIL for APPLIED ECONOMIC RESEARCH (NCAER) have
concluded that the profile of the rural consumer has the following attributes –
The purchasing power of the rural buyer is lower than that of his urban
counterpart due to lesser sources of income. This means that the standard of
living there is also low.
Literacy rates in rural areas are very low. Only a quarter of the rural
population knows how to read and write. In these circumstances visual mediums,
demonstrations etc. work better than posters, hand-outs etc.
Most of the 700 million villagers in India are spread out amongst the 7 lakh
villages in India. So reaching out to them in remote areas becomes a difficulty.
Culturally, villagers are traditional in their outlook and have shown traits
of understanding messages that connect to their culture faster. They further,
speak regional languages and hence, it is better to convey the message to them in
their languages.
They are mostly engaged in agriculture for employment. And, patterns reveal
that they are influenced by healthcare employees, bank employees, panchayat
members, teachers etc.
Rural people identify with various media vehicles like the TV, radio,
theatre etc.
These factors must be fully understood before venturing into the rural markets.
CHALLENGES IN RURAL MARKETING
Although lucrative as it may seem, the rural market is not without flaws. There
are challenges that pose a roadblock to the process. The first bottleneck you will
surely encounter is the problem of availability. Given the fact that the rural
geographical construct is spread over 3 million sq. kms., it becomes very
difficult to market a product in every corner of Indian villages. Poor
infrastructure adds to the problem. Success stories includes Hindustan Levers Ltd.
who have used local transportation to reach out to villages, LG Electronics who
have used various strategies, Coca Cola India Ltd. who eyes the rural market as a
imminent future resource.
Another problem is that of affordability. Rural markets demand smaller quantities
of products. They are also host to various smaller brand value products like say,
Britannia Tiger biscuits, or LG’s Sampoorna color TVs etc. keeping this in mind
companies have designed packets containing smaller quantities. E.g. Coca Cola’s
new 200ml. bottle costing Rs. 5.
Then there’s the problem of acceptability. Products must be designed to suit rural
demands in order to be successful. A successful example is that of the Sampoorna
color TVs that LG designed for the rural buyer in 1998. It was a low cost color TV
that was a throwaway hit selling almost 1 lakh pieces in the first year.
Advertisements like that of Perk featuring Rani Mukherjee, of Coca Cola featuring
Amir Khan in rural surroundings indicate that these products are doing
successfully in rural areas.
Venturing entrepreneurs must be also wary of lack of awareness. The difficulty is
in reaching out to the consumer because it is said that around two-fifths of the
entire rural population is unreachable by any media vehicle, be it TV, radio,
theatres etc. So it is important to tap in opportunities like haats, melas etc.
Faulty storage facilities combined with a poor distribution system also add to the
problem. Moreover, the presence of counterfeit brands and seasonal demand are
other problems in this regard.
RURAL MARKETING STRATEGIES
Keeping in mind the rural consumer’s profile and the bottlenecks in reaching them,
the following are types of strategies that are employed.
Client and location specific promotion - involves a strategy designed to be
suitable to the location and the client.

Joint or cooperative promotion - this strategy involves participation


between the marketing agencies and the client.

Bundling of inputs - several related items are sold to the target client,
including arrangements of credit, after-sale service, and so on.

Partnership for sustainability - involves laying and building a foundation


for continuous and long lasting relationship.

Various effective marketing tools include mobile advertising, mobile vans, e-


Choupals, door to door advertising, rural events, product demonstrations, free
samples etc.
CONCLUSION
The Indian rural market is today fast growing at 25% annually. Around 68% of
the rural market is found in villages with a population less than 1000. Where only
65 million mobile users are found in urban areas, around 135 million more users
are found in villages. Demand for urban consumer products like washing machine,
coolers, and air conditioners are lately increasing in rural areas. There are many
factors leading to an increase in demands from the rural sector, such as, changes
in habits, lifestyles, tastes, economic power, increase in literacy levels,
increase in income, development of infrastructural facilities. Moreover, by
venturing into these remote markets, corporate India can also extend its
philanthropic help to rural area through corporate social responsibility and
thereby help the government in developing these areas.