Rural markets have gained significance, because of the growing economy which has resulted into considerable increase in the purchasing power of the rural communities. Owing to green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this environment, a special marketing strategy, namely, Rural Marketing has emerged. Rural marketing is over and over again 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. Rural marketing experts also term it as developmental marketing, as the process of rural marketing involves an urban to rural activity, which in turn is characterised by various peculiarities in terms of nature of market, products and processes. Rural marketing differs from agricultural or consumer products marketing in terms of the nature of transactions, which includes participants, products, modalities, norms and outcomes. The participants in case of Rural Marketing would also be different, they include input manufacturers, dealers, farmers, opinion makers, government agencies and traders. The existing approach to the rural markets has viewed the markets as a homogeneous one, but in practice, there are significant buyers and user differences across regions as well as within that require a differential treatment of the marketing problems.
These differences in approach could be in terms of the type of farmers, type of crops and other agro-climatic conditions. One has to understand the market norms in agricultural input so as to devise good marketing strategies and to avoid unethical practices, which distort the marketing environment. The importance of rural marketing can be understood from the fact that today modern inputs i.e. diesel, electricity, fertilisers, pesticides, seeds account for as much as 70% of the total cash costs and 23% of the total costs incurred by the farmers in the Green Revolution areas. Further the percentages were higher at 81% and 38% for small; farmers owning 1.85 hectares of land. Rural market offers huge opportunity to marketers, infrastructure is improving rapidly, and social infrastructure has improved a lot in past decade with more kuccha houses getting converted into puccha houses, percentage of people below poverty line has declined and literacy level has improved by huge numbers. Other opportunity is the use of available infrastructure of post offices (1, 38000+),haats, mela’s etc.Proliferation of large format rural retail stores which have been successful like DSCL Haryali stores,M & M Shubh Labh stores, TATA/Rallis Kisan Kendras etc. Rural marketing involves more concentrated personal selling efforts compared to urban marketing. Firms should desist from designing goods for the urban markets and subsequently pushing them in the rural areas. Distribution strategy need to be devised in a different manner compared to urban market. Communication channels should be chosen very carefully as only around 20% of the rural population has access to a vernacular newspaper. So, the audio visuals must be planned to convey a right message to the rural folk. The rich, traditional media forms like folk dances, puppet shows, etc with which the rural consumers are familiar and comfortable, can be used for high impact product campaigns.
Some successful examples are of Escorts which had an focused approach depending on geographical and market parameters like fares, melas etc. Looking at the ‘kuchha’ roads of village they positioned their bike as tough vehicle. Their advertisements showed Dharmendra riding Escort with the punch line ‘Jandar Sawari, Shandar Sawari’. Thus, they achieved whopping sales of 95000 vehicles annually and HLL which started ‘Operation Bharat’ to tap the rural markets. Under this operation it passed out low–priced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to twenty million households. Thus, 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. Rural marketers should understand this fact and try to tap the huge untapped potential in our country, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.
Contributed by: Manish Sharma & Prasenjit Sen
2 comments:
Excellent article, infact the rural marketing is widely gaining its roots specially in India where huge chunk of population resides and has the future prospects of mass consumption. Indian corporates should concentrate and invest more in developing these markets before any foreign multinationals grab the market share. Even the future economic growth of India is largely dependent on development of rural markets
To expand the market by tapping the countryside, more and more MNCs are foraying into India's rural markets. Among those that have made some headway are Hindustan Lever, Coca-Cola, LG Electronics, Britannia, Standard Life, Philips, Colgate Palmolive and the foreign-invested telecom companies.
Keeping the potential of the rural market as a focus, GE Healthcare started an initiative called ‘In India, for India’, through which it developed unique products such as the MAC 400, a recently launched electrocardiograph (ECG) that was designed, developed and manufactured in India.
Coca-Cola, which considers rural India as a future growth driver, evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplied, twice a week, large distributors who acted as hubs. These distributors appointed and supplied, once a week, smaller distributors in adjoining areas.
LG Electronics defined all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG set up 45 area offices and 59 rural/remote area offices.
Godrej introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh.
Hindustan Lever, among the first MNCs to realise the potential of India's rural market, launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm.
Coca-Cola addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative paid off: Eighty per cent of new drinkers came from the rural markets.
Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provided low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets.
Coca-Cola also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill was available in a single-serve sachet of 25 gm priced at Rs 2 and mutiserve sachet of 200 gm priced at Rs 15.
One company which reaped rich dividends is LG Electronics. In 1998, it developed a customized TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year.
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