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Other definitions: L.G. Electronics defines any population centres other than the seven metros as semi-urban or rural. Hindustan Unilever, ITC, and most FMCG sector defines a rural setup up to 20,000 population. Durables and agricultural inputs companies set this limit as 50,000.
Green Revolution - scientific farming practices. Better irrigation facilities, and application of implements etc, resulted in an exponential growth in agricultural production, White Revolution initiated by government diary development policy and producers cooperatives and moving processed milk to urban demand centres, etc Changed the contents of rural markets. Next
A new area marketing of agricultural inputs emerged. This phase saw the growth of companies such as: 1.Mahindra & Mahindra, 2.Escorts, Eicher, 3.Shriram Fertilizers (now called DCM Shriram Consolidated Ltd.), and 4.Indian Farmers Fertilizer Cooperative Limited (IFFCO).
Marketing of rural products received considerable attention through agencies like the KVIC (Khadi and Village Industries Commission), Bunkar (weavers) societies, and handicrafts emporia. Governments support for exhibitions and Gram Shree Melas and Shilp Melas, resulted in the inflow of products like handicrafts, handloom textiles, leather products, etc into urban markets on a large scale. It was in this period that a few FMCG companies began establishing a distribution network in rural segment.
In 1970s NIRMA first company to initiate and produce for rural consumers. Others were Usha, Philips, etc for home appliances.
From 1990s Industrial sector gained strength and maturity. A new service sector emerged, signifying the transition of an agricultural society into an industrial one. Plan outlay of central and state governments for rural development accelerated socio-economic progress. Economic reforms further accelerated the process by introducing competition into the markets. Led to growth of rural markets for household consumables and durables.
In Phase III, most companies (both Indian and Multinational) began realizing the enormous potential of rural markets, brought about by a saturation in urban markets. Importance of rural markets with pro-rural initiatives of government and arrival of global and Indian corporations with customized offerings for rural markets.BEGAN.
Automobiles companies like Maruti, Hero Honda and Bajaj planned for affordable price range. GE, Intel, Shell Foundation, Microsoft and HPCL plan to enter RM with low-cost technologies. Reliance with Mobile connections. Private Insurance companies initiate to enter with new products. HUGE INTIATIVES The market size of rural India is expected to increase from USD 0.5 trillion to USD 1 trillion by 2020.
The pace of migration from Rural to Urban is shrinking since 1980s. NREGS led to earning possibilities. Reverse migration possible. Though urban population will rise, the decline of village population will be marginal (mild) consistent till 2020. Nearly two-third of the population will settle in village itself as per predictions. Rural India is an Agrarian Economy: Rural India is no longer agrarian economy. Higher incomes have decreased the dependence of agriculture and more towards non-farm sector. (40%-60% to 30%-70% respectively). Evolving Rural Consumer: The rural consumer is becoming more literate and value driven. The greatest change is taking place amongst the rural youth, who are rapidly getting exposed to urban products and services.
Acceptability: Acceptability of a product or service vis-vis rural consumers is critical. Product designed for urban cannot be for rural. Rural Environment should be borned in mind. Greater versatility and adaptability to rural conditions will have an advantage over others. For example: Once Chinese models mobile phones low cost, durable, easy to use, built-in-torch, loudspeakers (in no electricity conditions). SIZE OF TARGET RURAL CONSUMER SEGMENT AND COST IMPLICATIONS NEED TO BE CONSIDERED FOR A SUCCESSFUL COMPANY.
There are 42000 rural supermarkets (haats) in India, which exceed the total number of retail chain stores in the US (35000).
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