Rural markets

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Rural Markets are defined as those segments of overall market of any economy, which
are distinct from the other types of markets like stock market, commodity markets or
Labor economics. Rural Markets constitute an important segment of overall economy, for
example, in the USA, out of about 3000 countries, around 2000 counties are rural, that is,
non-urbanized, with population of 55 million. Typically, a rural market will represent a
community in a rural area with a population of 2500 to 30000 [1].

Contents
[hide]

• 1 Significance
• 2 Strategies
• 3 Present position

• 4 References

[edit] Significance
In recent years, rural markets have acquired significance in countries like China and
India, as the overall growth of the economy has resulted into substantial increase in the
purchasing power of the rural communities. On account of the green revolution in India,
the rural areas are consuming a large quantity of industrial and urban manufactured
products. In this context, a special marketing strategy, namely, rural marketing has taken
shape. Sometimes, rural marketing is confused with agricultural marketing – the later
denotes marketing of produce of the rural areas to the urban consumers or industrial
consumers, whereas rural marketing involves delivering manufactured or processed
inputs or services to rural producers or consumers. Also, when we consider the scenario
of India and China, there is a picture that comes out,huge market for the developed
products as well as the labor support. This has led to the change in the mindset of the
marketers to move to these parts of the world.
Also rural market is getting an importance because of the saturation of the urban market.
As due to the competition in the urban market, the market is more or so saturated as most
of the capacity of the purchasers have been targeted by the marketers.So the marketers
are looking for extending their product categories to an unexplored market i.e. the rural
market. This has also led to the CSR activities being done by the corporate to help the
poor people attain some wealth to spend on their product categories. Here we can think of
HLL (now, HUL) initiatives in the rural India. One of such project is the Project Shakti,
which is not only helping their company attain some revenue but also helping the poor
women of the village to attain some money which is surely going to increase their
purchasing power. Also this will increase their brand loyalty as well as recognition in that
area. Similarly we can think of the ITC E-Chaupal, which is helping the poor farmers get
all the information about the weather as well as the market price of the food grains they
are producing.In other view these activities are also helping the companies increase their
brand value. So as it is given above the significance of the rural market has increased due
to the saturation of the urban market as well as in such conditions the company which
will lead the way will be benefited as shown by the success of HUL and ITC initiatives.

[edit] Strategies
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Dynamics of rural markets differ from other market types, and similarly rural marketing
strategies are also significantly different from the marketing strategies aimed at an urban
or industrial consumer. This, along with several other related issues, have been subject
matter of intense discussions and debate in countries like India and China and focus of
even international symposia organized in these countries [2].

Rural markets and rural marketing involve a number of strategies, which include:

• Client and location specific promotion

• Joint or cooperative promotion..
• Bundling of inputs
• Management of demand
• Developmental marketing
• Unique selling proposition (USP)
• Extension services
• Business ethics
• Partnership for sustainability

Client and Location specific promotion involves a strategy designed to be suitable to

the location and the client.
Joint or co-operative promotion strategy involves participation between the marketing
agencies and the client.

'Bundling of inputs' denote a marketing strategy, in which several related items are sold
to the target client, including arrangements of credit, after-sale service, and so on.

Management of demand involve continuous market research of buyer’s needs and

problems at various levels so that continuous improvements and innovations can be
undertaken for a sustainable market performance.

Developmental marketing refer to taking up marketing programmes keeping the

development objective in mind and using various managerial and other inputs of
marketing to achieve these objectives.

Media, both traditional as well as the modern media, is used as a marketing strategy.

Unique Selling Propositions (USP) involve presenting a theme with the product to
attract the client to buy that particular product. For examples, some of famous Indian
Farm equipment manufactures have coined catchy themes, which they display along with
the products, to attract the target client, that is the farmers. English version of some of
such themes would read like:

• The heartbeats of rural India

• With new technique for a life time of company
• For the sake of progress and prosperity

Extension Services denote, in short, a system of attending to the missing links and
providing the required know-how.

Ethics in Business. form, as usual, an important plank for rural markets and rural
marketing.

Partnership for sustainability involve laying and building a foundation for continuous
and long lasting relationship.

'''Building sustainable market linkages for rural products: Industry’s role, scope,
opportunities and challenges'''

Introduction: Rural products of India are unique, innovative and have good utility and
values. Large number of these rural products (like handicraft items, food products,
embroidery, clothes & other products) sustains a significant segment of the population in
the rural areas. Several attributes of rural products can be identified, for which, it has a
demand in the market. Out of the lots, ‘ethnic origin’ and ‘indigenous design &
appearance’ are two traits of rural products, attracting a premium in the market. But,
contrary to this, the non-uniformity of rural products (from one another) and lack of its
quality control measures has been creating a negative demand. Besides, the small sized
and dispersed production units of these rural products hinder realization of the economies
of scale in marketing and result in high transaction costs per unit of output. Niche-based
products have no local market. Products in local use are also not marketed horizontally;
they often first travel down to market through a long chain of intermediaries and then up
to more difficult locations in the rural areas. In the process, the people in rural areas
suffer from both low prices as producers and high prices as consumers. In this conflict,
rural products loss its equilibrium and the supply side becomes exponentially high.
Because of this hazard, rural entrepreneurs face acute economic loss and rural markets
become stagnant. Therefore, there is an emergent need for Building sustainable market
linkages for rural products, so that, it can be connected to larger markets and farmers can
get a sustainable livelihood.

Market linkages for rural products: There are, broadly speaking, three ways in which
they can be connected to the markets. They can do it on their own — through
cooperatives. Or, the state can do it for them — through its procurement engines. Stages
one and two, in a manner of speaking. Today, developmental thinking on market linkages
has reached stage three — linkages through companies or industries. Rural markets are
regarded as organizations for marketing of non-farm products in a traditional setting.
Developing rural markets is one of the major concerns of government and Non-
governmental organization in India. This subject has attracted large number of research
studies over past. Among which noted contributions are made by Rajagopal, PhD, FRSA;
faculty members of Institute of Rural Management Anand, IIMA and others.

Across India, previous attempts to create such linkages have floundered. Take Assam and
other eastern states itself. Around the Eighties, the state government here decided that
cooperatives were a great way to consolidate its political base. Loans went to the
undeserving. Debts were written off. The institutions slowly got corrupted. As for the
linkages provided by the state, these offer uncertain sustainability. Given this context,
one can conclude that profit-oriented industry linkages are a more sustainable, more
scalable alternative. In this scenario, companies can use the social infrastructure (the self
help group et al.) as an alternative procurement and distribution chain and vice versa.

Industry’s role in building market linkages: To make an effective market linkage,

industries have to play as an engine of market, which can generate a brand image of the
rural products. This initiative of industries will also strengthen the backward and forward
linkages of the rural market, besides, accelerating the innovations of the rural products.
Definitely, this strategy will also give a remarkable dividend to the industries & profit
making companies. In micro level, it is observed that to create a sustainable market
linkage for rural products, industries can develop an ecosystem of Self Help Groups
(SHGs) by involving the local communities through village level empowerment. It is
nothing less than the next phase in the democratization of commerce. Under this
paradigm, industries can create a network with viable marketing channels covering all the
linkages from villages to the global level. This architecture provides the right value of
procurement through the village procurement centres and rural entrepreneurs can sell
their products faster with better price realization. This model is also capable of generating
a consumer business and an output business in a win-win scenario, where rural producers
can get a wide marketing horizon and the industries shall get a new, lower cost
‘salesforce’. Another role of industries in building market linkages for agro-based rural
products can be the ‘dynamic contract farming’. If a conventional industry can kick off a
contract farming business, and export niche horticulture crops like cucumbers, the small
and marginal farmers who could grow these small cucumbers would make Rs 30,000 in
profits in a year. KRBL, one of India’s largest basmati exporters, has contract farming
agreements with 24,000 farmers; Global Green buys from about 12,000 farmers.
Moreover, in the current era of information technology, industry and private companies
can also creatively use ICT for building sustainable marketing linkages. This approach
creatively leverages information technology (IT) to set up a meta-market in favour of
small and poor producers/rural entrepreneurs, who would otherwise continue to operate
and transact in 'unevolved' markets where the rent-seeking vested interests exploit their
disadvantaged position. ITC e Choupal is the best example in this context. Through
creative use of Information Technology, ITC eChoupal has been creating sustainable
stakeholder value by reorganizing the agri-commodity supply chains simultaneously
improving the competitiveness of small farmer agriculture and enhancing rural
prosperity. eChoupal also sidesteps the value-sapping problems caused by fragmentation,
dispersion, heterogeneity and weak infrastructure. ITC takes on the role of a Network
Orchestrator in this meta-market by stitching together an end-to-end solution. It
eliminated the traditional 'mandi' system which involved lot of middlemen as a result of
which farmers failed to get the right value for their produce. The solution simultaneously
addresses the viability concerns of the participating companies by virtually aggregating
the demand from thousands of small farmers, and the value-for-money concerns of the
farmers by creating competition among the companies in each leg of the value chain.

Scope & opportunities: The basic scope of this novel initiative will be the mutual
benefits of the rural entrepreneurs and industries. The entrepreneurs – primary
beneficiaries, SHGs – bridge with the community, participating companies/industries and
rural consumers have befitted through a robust commercial relationship. These models of
marketing linkages demonstrate a large corporation which can play a major role in
reorganizing markets and increasing the efficiency of a rural product generation system.
While doing so it will benefit farmers and rural communities as well as shareholders.
Moreover, the key role of information technology—provided and maintained by the
industry/company for building linkages, and used by local farmers—brings about
transparency, increased access to information, and rural transformation. Besides, this
strategy of market linkage, addresses the challenges faced by rural entrepreneurs due to
institution voids, numerous intermediaries and infrastructure bottlenecks. Moreover, the
prime scope of this model is the creation of opportunities for the rural entrepreneurs for
product differentiation and innovation by offering them choices. Because of this
sustainable market linkages, rural producers can participate in the benefits of
globalization and will also develop their capacity to maintain global quality standard.
Nonetheless, it creates new stakeholders for the industry sector. And subsequently, they
become part of the firms’ core businesses. The involvement of the private /industry sector
at the rural product and market development can also provide opportunities for the
development of new services and values to the customers, which will find application in
the developed markets. It will be worth mentioning that building a sustainable market
linkage through industry’s intervention will also empower the rural mass (producers,
farmers & entrepreneurs) to cope with socio-economic problems in the rural society and
will ensure economic self –reliance.

Challenges: There are significant challenges to the entire process the most important
being the capacity building of the rural entrepreneurs. For decades, the entrepreneurs
associated with very conventional/traditional knowledge of business, humiliation with
government, so they are likely to look at these initiatives with skepticism. Only consistent
performance can convince the skeptics. Therefore, the industries must play a catalytic
role to cope with this challenge and should also train the entrepreneurs to develop their
managerial and IT skills. On the other hand, the products of the existing and popular
brand also stand as threat to the rural products. These global giants (brand) may try to
suppress the rural products in the markets with its communication hype. Therefore,
developing alternative and additional market linkages for these products is an absolute
necessity. Moreover, the low volumes of rural products, high operating costs, high
attrition, and absence of local know how and relationships may also create problem in the
process. Henceforth, it is essential to make a way out to cope with these odds.

Conclusion: These issues gain added complexity under globalization, where markets are
characterized by extreme competition and volatility. While rural products has been
perceived traditionally as catering to the local market, or at best, to a wider national
market through limited formal channels, the reality of globalization since the 1990s
introduced a new dimension to the market for such products. The issue of rural product
generation through industrialization, therefore, needs to be viewed from a new angle and
on far more scientific lines. The core of a scientific approach is to understand the market
opportunities for rural products along with the country's development priorities and to
chalk out a strategy where rural industries have an important role to play. While rural
products are forced to increasingly become part of global supply chains, these products
need to adapt themselves, not only according to the changing tastes of the national
market, but also according to changes in tastes in the international market. Therefore, a
process is essential to explore the market linkages and capacity building for SHGs
through a bottom up approach and continuous dialogue with stakeholders of rural
enterprise. This process should ensure the participation of rural people as consumers and
producers in the globalization mechanism, with better livelihoods and global access to
markets. The real challenge of building a sustainable market linkage starts here.

[edit] Present position

Rural markets, as part of any economy, have untapped potential. There are several
difficulties confronting the effort to fully explore rural markets. The concept of rural
markets in India, as also in several other countries, like China [3], is still in evolving
shape, and the sector poses a variety of challenges, including understanding the dynamics
of the rural markets and strategies to supply and satisfy the rural consumers.

[edit] References
Rural Marketing: Challenges,
Opportunities & Strategies
Wednesday, May 26, 2010
By Ruchi Katiyar

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Rural marketing is confused with agricultural marketing.

"The future lies with those companies who see the poor as their
customers." -C. K.
Prahalad
Addressing Indian CEOs, Jan 2000.

Concept

In recent years, rural markets have acquired significance, as the overall growth of
the economy has resulted into substantial increase in the purchasing power of the
rural communities.
On account of green revolution, the rural areas are consuming a large quantity of
industrial and urban manufactured products. In this context, a special marketing
strategy, namely, rural marketing, has emerged. But often, rural marketing is
confused with agricultural marketing - the latter denotes marketing of produce of
the rural areas to the urban consumers or industrial consumers, whereas rural
marketing involves delivering manufactured or processed inputs or services to
rural producers or consumers.

What Makes Rural Markets Attractive?

Rural market has following attributes and the following facts substantiate this: -

742 million people

Estimated annual size of the rural market -

FMCG Rs. 65,000 Crore

Durables Rs. 5,000 Crore

Agri-Inputs (including tractors) Rs. 45,000 Crore
2 / 4 Wheelers Rs. 8,000 Crore

In 2001-02, LIC sold 55% of its policies in rural India.

Of two million BSNL mobile connections, 50% are in small towns / villages.

Of the 6.0 lakh villages, 5.22 lakh have a Village Public Telephone (VPT).

41 million Kisan Credit Cards have been issued (against 22 million credit-plus-
debit cards in urban), with cumulative credit of Rs. 977 billion resulting in
tremendous liquidity.

Of the 20 million Rediffmail sign-ups, 60% are from small towns. 50% of
transactions from these towns are on Rediff online shopping site.
42 million rural households (HHs) are availing banking services in comparison to
27 million urban HHs.

Investment in formal savings instruments is 6.6 million HHs in rural and 6.7
million HHs in urban.

Opportunities

1. Infrastructure is improving rapidly -

In 50 years only, 40% villages have been connected by road, in next 10 years
another 30% would be connected.

More than 90% villages are electrified, though only 44% rural homes have
electric connections.

Rural telephone density has gone up by 300% in the last 10 years; every 1000+
pop is connected by STD.

Social indicators have improved a lot between 1981 and 2001 -

Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved
(41% to 23%).

Percentage of BPL families declined from 46% to 27%.

Rural literacy level improved from 36% to 59%.

Low penetration rates in rural areas, so there are many marketing opportunities -

Durables Urban Rural Total (% of Rural HH)

CTV 30.4 4.8 12.1
Refrigerator 33.5 3.5 12.0
 FMCGs Urban Rural Total (% of Rural HH)
Shampoo 66.3 35.2 44.2
Toothpaste 82.2 44.9 55.6

Marketers can make effective use of the large available infrastructure -

Post Offices 1,38,000

Haats (periodic markets) 42,000
Melas (exhibitions) 25,000
Mandis (agri markets) 7,000
Public Distribution Shops 3,80,000
Bank Branches 32,000

Proliferation of large format Rural Retail Stores, which have been successful also
-

 DSCL Haryali Stores

 M & M Shubh Labh Stores
 TATA / Rallis Kisan Kendras
 Escorts Rural Stores
 Warnabazaar, Maharashtra (Annual Sale Rs. 40 crore)

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Rural market - A world of opportunity

GONE ARE the days when a rural consumer went to a nearby

city to buy``branded products and services". Time was when
only a select household consumed branded goods, be it tea or
jeans. There were days when big companies flocked to rural
markets to establish their brands. Today, rural markets are
critical for every marketer - be it for a branded shampoo or an
automobile. Time was when marketers thought van
campaigns, cinema commercials and a few wall paintings
would suffice to entice rural folks under their folds. Thanks to
television, today a customer in a rural area is quite literate
about myriad products that are on offer in the market place.
An Indian farmer going through his daily chores wearing jeans
may sound idiotic. Not for Arvind Mills, though. When it
launched the Ruf & Tuf kits, it had created quite a sensation
among the rural folks as well within few months of their
launch.

Trends indicate that the rural markets are coming up in a big

way and growing twice as fast as the urban, witnessing a rise
in sales of hitherto typical urban kitchen gadgets such as
refrigerators, mixer-grinders and pressure cookers. According
to a National Council for Applied Economic Research
(NCAER) study, there are as many 'middle income and above'
households in the rural areas as there are in the urban areas.
There are almost twice as many 'lower middle income'
households in rural areas as in the urban areas. At the highest
income level there are 2.3 million urban households as against
1.6 million households in rural areas. According to Mr. D.
Shivakumar, Business Head (Hair), Personal Products
Division, Hindustan Lever Limited, the money available to
spend on FMCG (Fast Moving Consumer Goods) products by
urban India is Rs. 49,500 crores as against is Rs. 63,500 crores
in rural India.

As per NCAER projections, the number of middle and high

income households in rural India is expected to grow from 80
million to 111 million by 2007. In urban India, the same is
expected to grow from 46 million to 59 million. Thus, the
absolute size of rural India is expected to be double that of
urban India. The study on ownership of goods indicates the
same trend. It segments durables under three groups - (1)
necessary products - Transistors, wristwatch and bicycle, (2)
Emerging products - B&W TV and cassette recorder, (3)
Lifystyle products - CTV and refrigerators. Marketers have to
depend on rural India for the first two categories for growth
and size. Even in lifestyle products, rural India will be
significant over next five years.

At a recent seminar in Chennai on 'rural marketing for

competitive advantage in globalised India', organised by
Anugrah Madison Advertising Pvt Limited, marketing pundits
have echoed that a sound network and a thorough
understanding of the village psyche are a SINE QUO NON for
making inroads into rural markets. The price-sensitivity of a
consumer in a village is something the marketers should be
alive to. Rural income levels are largely determined by the
vagaries of monsoon and, hence, the demand there is not an
easy horse to ride on. Apart from increasing the geographical
width of their product distribution, the focus of corporates
should be on the introduction of brands and develop strategies
specific to rural consumers. Britannia Industries launched
Tiger Biscuits especially for the rural market. It clearly paid
dividend. Its share of the glucose biscuit market has increased
from 7 per cent to 15 per cent.

Effective communication

An important tool to reach out to the rural audience is through

effective communication.``A rural consumer is brand loyal
and understands symbols better. This also makes it easy to sell
look - alike", says Mr. R.V Rajan, CMD, Anugrah Madison
Advertising. The rural audience has matured enough to
understand the communication developed for the urban
markets, especially with reference to FMCG products.
Television has been a major effective communication system
for rural mass and, as a result, companies should identify
themselves with their advertisements. Advertisements
touching the emotions of the rural folks, it is argued, could
drive a quantum jump in sales.

There is a need to differentiate the brand according to regional

disparities. The differentiation may not necessarily be in terms
of product content. It may also be in terms of packaging,
communication or association with the brand.

The brand has to be made relevant by understanding local

needs. Even offering the same product in different regions
with different brand names could be adopted as a strategy. At
times it is difficult to pass on an innovation over an existing
product to the rural consumer unlike his urban counterpart -
like increased calcium or herbal content or a germ-control
formula in toothpaste.

According to Mr. Shivakumar, HLL, the four factors which

influence demand in rural India are - access, attitude,
awareness and Affluence. HLL has successfully used this to
influence the rural market for its shampoos in sachets. The
sachet strategy has proved so successful that, according to an
ORG - MARG data, 95 per cent of total shampoo sales in rural
India is by sachets. The company had developed a direct
access to markets through wholesale channel and created
awareness through media, demonstration and on ground
contact. This changed the attitude of the villagers. Today, the
young and the educated in the villages are already large in
number. And this number is increasing. Already, 40 per cent
of all those graduating from colleges are rural youth. They are
the decision makers and are not very different in education,
exposure, attitudes and aspirations from their counterparts at
least in smaller cities and towns.

District marketing

Since marketing is to target the growing segments, Mr. Francis

Xavier, Managing Director, Francis Kanoi Marketing
Research, wants to see the urban-like village dweller as an
urbanised person from the districts. The village then becomes
a location or a suburb of a district. And the district becomes
the basic geographical entity. Since the urban-like populations
in the villages are taken as a part of the district, they will
represent the dominant part of the market in most of the
districts. This will compel the kind of attention that it
deserves. A districts perspective removes the complexities,
heterogeneity, access and targetability that have hindered rural
marketing initiatives. He feels that rural marketing requires
every element of marketing including product, pricing,
packaging, advertising, and media planning to have the rural
customer as the target. And, this becomes possible when we
have districts marketing as a separate entity.

Impact of globalisation

The impact of globalisation will be felt in rural India as much

as in urban. But it will be slow. It will have its impact on
target groups like farmers, youth and women. Farmers, today
'keep in touch' with the latest information and maximise both
ends. Animal feed producers no longer look at Andhra Pradesh
or Karnataka. They keep their cell phones constantly
connected to global markets. Surely, price movements and
products' availability in the international market place seem to
drive their local business strategies. On youth its impact is on
knowledge and information and while on women it still
depends on the socio-economic aspect.

The marketers who understand the rural consumer and fine

tune their strategy are sure to reap benefits in the coming
years. In fact, the leadership in any product or service is linked
to leadership in the rural India except for few lifestyle-based
products, which depend on urban India mainly.

Shanthi Kannan

in Chennai

Prime Minister Manmohan Singh recently talked about his vision for 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."

'Go rural' is the slogan of marketing gurus after analyzing the socio-economic
changes in villages. The Rural population is nearly three times the urban, so that
Rural consumers have become the prime target market for consumer durable and
non-durable products, food, construction, electrical, electronics, automobiles, banks,
insurance companies and other sectors besides hundred per cent of agri-input
products such as seeds, fertilizers, pesticides and farm machinery. The Indian rural
market today accounts for only about Rs 8 billion 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. Although a lot is spoken about the immense potential of the unexplored rural
market, advertisers and companies find it easier to vie for a share of the already
divided urban pie.

The success of a brand in the Indian rural market is as unpredictable as rain. It has
always been difficult to gauge the rural market. Many brands, which should have
been successful, have failed miserably. More often than not, people attribute rural
market success to luck. Therefore, marketers need to understand the social
dynamics and attitude variations within each village though nationally it follows a
consistent pattern looking at the challenges and the opportunities which rural
markets offer to the marketers it can be said that the future is very promising for
those who can understand the dynamics of rural markets and exploit them to their
best advantage. A radical change in attitudes of marketers towards the vibrant and
burgeoning rural markets is called for, so they can successfully impress on the 230
million rural consumers spread over approximately six hundred thousand villages in
rural India.

What rural market buys?

Rural India buys small packs, as they are perceived as value for money. There is
brand stickiness, where a consumer buys a brand out of habit and not really by
choice. Brands rarely fight for market share; they just have to be visible in the right
place. Even expensive brands, such as Close-Up, Marie biscuits and Clinic shampoo
are doing well because of deep distribution, many brands are doing well without
much advertising support — Ghadi, a big detergent brand in North India, is an
example.

Why Rural Market?

The Indian rural market has a huge demand base and offers great opportunities to
marketers. Two-thirds of Indian consumers live in rural areas and almost half of the
national income is generated here. The reasons for heading into the rural areas are
fairly clear. The urban consumer durable market for products like colour TVs,
washing machines, refrigerators and air conditioners is growing annually at between
7 per cent and 10 per cent.

The rural market is zooming ahead at around 25 per cent annually. "The rural
market is growing faster than urban India now," says Venugopal Dhoot, chairman of
the Rs 989 -crore(Rs billion) Videocon Appliances. "The urban market is a
replacement and up gradation market today," adds Samsung's director, marketing,
Ravinder Zutshi.

Reasons for improvement of business in rural area

• Socio-economic changes (lifestyle, habits and tastes, economic status)

• Literacy level (25% before independence – more than 65% in 2001)
• Infrastructure facilities (roads, electricity, media)
• Increase in income
• Increase in expectations

MART, the specialist rural marketing and rural development consultancy has found
that 53 per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer
durable sales, said its head Pradeep Kashyap at the seminar. Of two million BSNL
mobile connections, 50 per cent went to small towns and villages, of 20 million
Rediffmail subscriptions, 60 per cent came from small towns, so did half the
transactions on Rediff's shopping site.

Special features of rural market

Unlike urban markets, rural markets are difficult to predict and possess special
characteristics. The featured population is predominantly illiterate, have low income,
characterized by irregular income, lack of monthly income and flow of income
fluctuating with the monsoon winds.

Rural markets face the critical issues of Distribution, Understanding the rural
consumer, Communication and Poor infrastructure. The marketer has to strengthen
the distribution and pricing strategies. The rural consumer expects value for money
and owing to has unsteady and meager status of weekly income; increasing the
household income and improving distribution are the viable strategies that have to
be adapted to tap the immense potential of the market.

Media reach is a strong reason for the penetration of goods like cosmetics, mobile
phones, etc., which are only used by the urban people. Increasing awareness and
knowledge on different products and brands accelerate the demand. The rural
audience are however critical of glamorous ads on TV, and depend on the opinion
leaders who introduce the product by using it and recommending it.

Opinion leaders play a key role in popularizing products and influence in rural
market. Nowadays educated youth of rural also influences the rural consumers. Rural
consumers are influenced by the life style they watch on television sets. Their less
exposure to outside world makes them innocent and fascinated to novelties. The
reach of mass television media, especially television has influenced the buying
behaviour greatly

Creating brands for rural India

Rural markets are delicately powerful. Certain adaptations are required to cater to
the rural masses; they have unique expectation and warrant changes in all four
parameters of product, price, promotion and distribution.
A lot is already emphasized on adapting the product and price in terms of packaging,
flavouring, etc and in sachets, priced to suit the economic status of the rural India in
sizes like Rs.5 packs and Re.1 packs that are perceived to be of value for money.
This is a typical penetration strategy, that promises to convert the first time
customers to repeated customers.

The promotion strategies and distribution strategies are of paramount importance.

Ad makers have learnt to leverage the benefits of improved infrastructure and media
reach. The television airs advertisements to lure rural masses, and they are sure it
reaches the target audience, because majority of rural India possesses and is glued
to TV sets!

Distributing small and medium sized packets thro poor roads, over long distances,
into deep pockets of rural India and getting the stockiest to trust the mobility is a
Herculean task. Giving the confidence those advertisements will support. Sales force
is being trained to win the confidence of opinion leaders. Opinion leaders play an
important role in popularizing the brand. They sometimes play the role of entry
barriers for new products.

The method of promotion needs to be tailored to suit the expectations of the market.
Techniques that have proved to be successful are Van campaigns, edutainment films,
generating word of mouth publicity through opinion leaders, colourful wall paintings.
The Wide reach of television has exposed the other wise conservative audience to
westernization. Panchayat televisions in Tamilnadu carries message that are well
received and contribute to community development.

Dynamics of rural markets differ from other market types, and similarly rural
marketing strategies are also significantly different from the marketing strategies
aimed at an urban or industrial consumer. This, along with several other related
issues, have been subject matter of intense discussions and debate in countries like
India and China and focus of even international symposia organized in these
countries.

Rural markets and rural marketing involve a number of strategies, which include:

* Client and location specific promotion

* Joint or cooperative promotion

* Bundling of inputs

* Partnership for sustainability

Client and Location specific promotion involves a strategy designed to be suitable to

the location and the client. Joint or co-operative promotion strategy involves
participation between the marketing agencies and the client. 'Bundling of inputs'
denote a marketing strategy, in which several related items are sold to the target
client, including arrangements of credit, after-sale service, and so on. Media, both
traditional as well as the modern media, is used as a marketing strategy to attract
rural customers.
Partnership for sustainability involves laying and building a foundation for continuous
and long lasting relationship.

Innovative media can be used to reach the rural customers. Radio and television are
the conventional media that are reaching the rural audience effectively. But horse
cart, bullock cart and wall writing are the other media, which can carry the message
effectively to the rural customers.

Rural marketing is an evolving concept, and as a part of any economy has untapped
potential; marketers have realized the opportunity recently. Improvement in
infrastructure and reach, promise a bright future for those intending to go rural.
Rural consumers are keen on branded goods nowadays, so the market size for
products and services seems to have burgeoned. The rural population has shown a
trend of wanting to move into a state of gradual urbanization in terms of exposure,
habits, lifestyles and lastly, consumption patterns of goods and services. There are
dangers on concentrating more on the rural customers. Reducing the product
features in order to lower prices is a dangerous game to play.

References

1. Rural Marketing, Ravindranath V. Badi and Naranyansa V. Badi, Himalaya

Publishing, 2004

2. The Hindu - Business Line

3. www.deccanherald.com

4. www.indiantelevision.com