06-10-2012, 03:56 PM
RURAL MARKETING
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WHAT IS A RURAL MARKET ?
Before gamboling into issues like where the Indian rural market stands and the opportunities for corporates to explore there... let's look at the definition of urban and rural India. The Census defined urban India as - "All the places that fall within the administrative limits of a municipal corporation, municipality, cantonment board etc or have a population of at least 5,000 and have at least 75 per cent male working population in outside the primary sector and have a population density of at least 400 per square kilometer. Rural India, on the other hand, comprises all places that are not urban!"
Rural Markets constitute an important segment of overall economy, for example, in the USA, out of about 3000 counties, 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.
Significance of Indian Rural Market
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 initiativesPresent Situation of Indian Rural Market
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, 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.
Rural Tourism in India India is a country of rich culture and heritage. With above 70% population residing in around 6 million plus villages, real India has its roots right inside this simplistic structure. Rural Tourism in India takes you to a journey of not so known – the land and people which is the back bone of this country. It is a journey to explore diversity and hospitality from nook and corners of India. Rural tourism attempts to take you away to a dream land full of peace, simplicity and innocence. Connect with nature, unlearn luxury, and spend time with people who support your life by providing the raw inputs for complex city life needs. From agriculture to sericulture, they do it all. What you explore during these tours is a unique experience and an eye opener to the basics of a developing economy in the country. You not only get to see rural life closely, but also get a chance to connect and open avenues for rural India by interacting with people closely.
Rural Zing - An Initiative to connect urban and rural economy
With Rural Zing, we try to take you to a journey of not so known – the land and people which is the back bone of this country. It is a journey to explore diversity and hospitality from nook and corners of India.Walk the path- Come meet the real India and experience the Zing. Read to visualize...! Register to experience...!
How Crack the Rural Market in India
To a marketer, India's rural market presents a challenge like no other. While marketers salivate at the prospect of making their marketing millions in rural India, none has yet been able to understand what makes rural India tick. Harish Bijoor says that so far marketers have sought to thrust cornflakes and dog biscuits alike at rural Indians. He makes a plea to preserve the sanctity of Rural India and discover commerce and sense in it all - by creating brands that keep in mind rural imperatives. The rural market for brands is a powder keg of an opportunity waiting to be explored - not exploited!
Look keenly at the statistics that tell us the growth of urbanisation. In 1951 we had 2,843 Urban Agglomerations(UA) and towns. Today, the number is close to 4000! The Urban population in 1951 stood at 17.3 per cent of total. Today, the number is a proud and unidimensional 27.8 per cent! In the last fifty years, we have had what I would call creeping urbanisation. In the next fifty, it is time to expect a galloping rate! Thanks to television…and thanks fundamentally to the Brand movement, which is poised to make a big movement in the heart and hearth of the rural dweller! The two Indias mean two sets of peoples. The rural man, woman, child, dog and cat for a start! Remember, dog-food and cat-food companies will definitely want to invade the vast rural hinterland sometime in the future for sure!
How then does one go about creating brands for the rural person in the rural dwelling? There are two ways really. The first is the insensitive way most marketers
have adopted to date. The second is a more sensitive rendering of what marketers and brand-evangelists in the future could adopt. The first is really the easy way. Pioneer marketers in rural areas used it to good advantage. Take the urban brand,
1) Tweak the product a wee bit (read: make it rustic, rugged and even lower-quality if necessary),
2) Lower the price (read: offer inferior grade teas to the rural market and superior grades to the urban one in the same brand),
3) Extend the brand to Low Unit Packs (read: lower unit packs will be cheaper in price and inferior in quality as well. Higher unit packs will take in superior quality. Urban markets use High unit packs and rural markets use LUPs)
4) Modify the packaging marginally (read: add the brand name in Hindi and four other prominent vernaculars)
5) Advertise (read: Take the English rendering of the standard urban storyboard and make a film in Hindi. Take this film and dub it in the vernacular. Never mind the lip sync even….in the early days!)
6) Promote (Read: Use Cinema widely. Use wall-site paintings. Sponsor the local boat race and the temple festival alike! Use rural publicity vans to percolate the brand message through television sets that would carry a VCR and a large-format screen as well)
7) Market Research (Read as: find out more about the rural dweller. Use the intrusive and alien questionnaire format to find out more. Use probes of every kind. Use the focus group at times if you are feeling particularly qualitative in your yearnings for data.)
The easy way is the insensitive way to create and build brands in the rural markets that still remain on the landscape. My clarion call: Forget the easy way you have used all these years. Take the tough route of branding in the rural market. Preserve rural India and what it represents. Bring back pride to rural India in terms of what it has to offer in its multi-variable format. But why? Is this a return to socialism? A form of retro-appeal? Of retro-fashion? No, the logic is strong enough for us to pursue the new rules of branding for rural India.
For one, take the case of the fertilizer and pesticide situation. In the very beginning, all of India was organic. We grew everything we did to cater to a population size that was manageable without the use of pesticides and fertilizers. Natural organic manure and very innovative natural practices that used plant and animal waste distinguished the agricultural practices of India. And then came the revolution everyone wanted. The men
in the Gandhi caps (except Gandhiji of course) wanted a bigger yield from the land and the cow and the factory alike. Practices morphed and India became yet another dumping ground for the pesticide and fertiliser that came from far and near. The countryside morphed. Yields doubled.
The year is 2003! The world is discovering health and the joy of consuming the organic produce. It’s back to nature…the pure way! And India has lost it! Imagine a situation where India could emerge as a 100 per cent producer of the organic product! And remember still that the organic produce today commands a premium in the key consumption markets of the world! We lost it! The rural terrain we still boast of can be preserved. I seek a sensitivity among the marketing man. A sensitivity that promises not to harm commercial intent, which is the salient driving force of all business intent. Sensitivity that could well carve out for the marketing man a commercial space one can be truly proud of.
The case I present in this piece therefore, is a case that seeks to preserve the sanctity of Rural India and discover commerce and sense in it all! A plea to really stop this one-sided movement that seeks to make the rural man a consumptive animal of cornflake and dog biscuit alike! Create brands keeping in mind rural imperatives then. Here goes the ideal rural brand map. My ultimate want as a Marketing man.
Rural Marketing in India Economy
The concept of Rural Marketing in India Economy has always played an influential role in the lives of people. In India, leaving out a few metropolitan cities, all the districts and industrial townships are connected with rural markets.
The rural market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioral factors operating in the country. The rural population in India accounts for around 627 million, which is exactly 74.3 percent of the total population.
The rural market in India brings in bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country. The rural market in Indian economy generates almost more than half of the country's income. Rural marketing in Indian economy can be classified under two broad categories. These are:The market for consumer goods that comprise of both durable and non-durable goods The market for agricultural inputs that include fertilizers, pesticides, seeds, and so on The concept of rural marketing in India is often been found to form ambiguity in the minds of people who think rural marketing is all about agricultural marketing. However, rural marketing determines the carrying out of business activities bringing in the flow of goods from urban sectors to the rural regions of the country as well as the marketing of various products manufactured by the non-agricultural workers from rural to urban areas. To be precise, Rural Marketing in India Economy covers two broad sections, namely:
Selling of agricultural items in the urban areas
Selling of manufactured products in the rural regions
Some of the important features or characteristics of Rural Marketing in India Economy are being listed below:
With the initiation of various rural development programmes there have been an upsurge of employment opportunities for the rural poor. One of the biggest cause behind the steady growth of rural market is that it is not exploited and also yet to be explored.
The rural market in India is vast and scattered and offers a plethora of opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby, the maximum number of consumers.
The social status of the rural regions is precarious as the income level and literacy is extremely low along with the range of traditional values and superstitious beliefs that have always been a major impediment in the progression of this sector.
The steps taken by the Government of India to initiate proper irrigation, infrastructural developments, prevention of flood, grants for fertilizers, and various schemes to cut down the poverty line have improved the condition of the rural masses.
ADVERTISING & MARKETING IN RURAL
Rural India’s recently discovered predilection to enthusiastically consume everything from shampoo to motorcycles has been the subject of much discussion. However the dominant view of the market is as seen through the product window (i.e. from the perspective of “how much of what is being bought”). To gain a better insight into the structure and drivers of consumer demand in Rural India, we need to also develop a view of the market by looking at it through the consumer or ‘people’ window (i.e. from the perspective of “how many of what kind of people are buying”). We need to enlarge the discussion from ‘the market’ to also include ‘the consumers’; from not just what is being bought, but also who is buying; and from thinking ‘product segments’ to also thinking consumer segments. This article presents one vignette of the rural market based on data from the IRS 1998 study, conducted by the MRUC (Media Research Users Council), and ORG – MARG.
But first, a quick ‘context setting’ run through of what’s happening to rural demand for durables, as seen through the familiar product window. Data presented at seminars and conferences on this is all drawn from the NCAER study – by far the best data source in the country on macro market facts. It appears that NCAER, in its Indian Market Demographics report, 1998, has estimated that Rural India’s market for consumer durables as being worth around Rs. 4500 crores, with an average annual growth rate of around 8%. They have introduced a very useful product segmentation of durables, where they have grouped durables into three price baskets – a sort of equivalent of the “premium, popular and low priced ” construct which we all instinctively use when thinking about packaged consumer goods brands. Group I comprises a basket of basic low cost durables like watches, radios, irons, fans etc. Group II comprises higher order durables like black and white televisions, sewing machines, mixers and two-in-one music systems. Group III comprises the high priced, high aspiration durables like colour TVs, refrigerators, motorised two wheelers and music systems – the litmus tests of whether Rural India is awakening to join the
mainstream of New Indian Consumerism! The first group is well penetrated, accounts for the lion’s share of rural durables demand, and is slow growing. The second is modestly penetrated, accounts for one fifth of the total value of rural durables demand and is growing at a healthy clip, while the last group is nascent but explosively growing. And that is the view from the product window.