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“A STUDY ON RURAL MARKETING IN INDIA: ITS STRATEGIES, CHALLENGES AND OPPORTUNITIES”
Dr. Unmekha Tare1, Dr. Vishal Mehta2, Mr. Danish Khan3
1Assistant Professor of Commerce, SICA College, Indore
2Associate Professor of Commerce, St. Paul Institute of Professional Studies (SPIPS), Indore
3Research Scholar, School of Commerce, Devi Ahilya University, Indore
Abstract:- Rural marketing is the developing concept. The marketers had derived the importance of it’s in the recent past years. Almost 70% of Indian population lives in the rural area and purely dependent on the seasonal higher incomes. Any strategy for these rural markets should give the more focus on accessibility, availability and affordability.
Focused attention and initiatives needs to be paid or taken to rural market research that shrink the apprehensively in dealing with these markets This research paper focused on the various concepts of rural marketing, their challenges, opportunities and the various strategies.
Keywords:- Rural marketing, consumer behavior, FMCG, consumer durables.
1. INTRODUCTION
Indian rural market is getting a noticeable growth now days, the various big business houses and MNCs are now started giving extra focus on the rural population with the consumers of metro cities. The consumption pattern of rural India is now slightly changed from the previous scenario; it may be because of the increase in population and income level of rural people. Based on preliminary “National Sample Survey Organization (NNSO)”
data the average per capita consumption of rural people in India is higher than the per capita consumption of urban people in 2010-11.
According to the study done by the CRISIL (“formerly Credit Rating Information Services of India Limited”) and the preliminary data released by the NNSO the per capita consumption of FMCG goods has also increased in rural India. The data itself show a change in demands of rural India due to the initiatives of marketers and the MNCs in terms of products, technology and innovations. The marketers also noticed the changing demands on the rural people and their consumption with increased level of income.
Other than the various reports the marketers are very well know about the frequent changes in the market of rural India, but its consumption behavior is bit different from the urban consumers in terms of uses. They more prefer cheap products of short life cycle and their changing in preferences and tastes etc. To make successful strategies for rural marketing the marketers need to have more focused in the research on the environment of rural marketing and can adopt their strategies and plans according to the studies.
2. WHAT IS RURAL MARKETING?
“Rural marketing is a process of developing, pricing, promoting, and distributing rural specific goods and services leading to desired exchange with rural customers to satisfy their needs and wants and also to achieve organizational objectives”. While basically there is a larger market growth in the urban market but the rural market is still yet to be tapped and also have the great opportunities of business growth. If the understand in a easy sense then we can define the rural marketing as the market where the pollution is less than 10000 of people. The rural market in India is spread over the India in vast geographical area.
2.1 Overview of Indian Rural Market
India consists of about 650,000 villages which are colonized by as regards to 850 million rural consumers making up for about 70 % of population and also contributing around 50% of the rural country's GDP (Gross Domestic Product). In addition to this the consumption behavior of this sector is also changing as compared to the consumption of the consumers of rural people.
Several of India's major consumer oriented companies serve up one-third of their consumers from the population of rural India. With regard to this it also increase the enhanced opportunities for the private business houses for the favorable investments. Per
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capita GDP in rural regions of India is increased at a CAGR (Compound Annual Growth Rate) of 6.2% since year 2000. Also the FMCG (Fast Moving Consumer Goods) sector in rural and semi urban area was expected to cross US$ 20 billion by 2018 and reach US$
100 billion by 2025.
The Indian FMCG (Fast Moving Consumer Goods) sector in rural market expected to cross up to US$ 100 billion by 2025.
The FMCG market in rural India is predictable to enlarge at a CAGR of 17.41 % to US$ 100 billion all through 2009–25.
Now, in revenue terms Rural FMCG market is about 40 % of the overall FMCG Market.
Along with the foremost retailers in India, the Dabur generates above 40-45 % of its domestic returns from sales in rural markets. HUL rural returns is about 45 % of its largely sales whereas supplementary business houses make 30- 35 % of their profits from rural markets.
2.2 Phases of Indian Rural Market
Before (1990’s) In the first phase the rural marketing was meant only for the produce of agricultural products such as various food grains and industrial products like cotton and oil seeds, all these were occupied the primary attention of the marketers. It was an unorganized market where the “Baniyas and Mahajans” completely dominate the market.
Before (1960-1990) Green revolution was the greatest thing which was happened in the period which lead to farming started involving scientific and technological methods and majority of villages become flourishing big business centers.
Agencies like “Khadi & Village Industries Commissions” (KVIC) bloomed and the government paid concentration to encourage these products. (After mid 1990’s) From the Mid 90’s the Indian Industrial sector has emerge them, it substantially contribute to the Gross National Product (GNP) in an increased manner. Rural area has developed and progressed economically and socially as well with the immense support of the state and central government. In this phase rural marketing started considering different from agricultural marketing.
2.3 Objectives of the Study
1. To study the current scenario of Rural Market in India.
2. To throw light on the key strategies for enhancing the rural market.
3. To depict the various challenges and opportunities of rural marketing in India.
4. To present the problems faced by the rural marketers in India.
3. RESEARCH METHODOLOGY
The present research study is a descriptive method. The Secondary data were collected from the various different sources, such as, text books based on rural marketing, magazines, research articles and websites.
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3.1 Key Challenges & Issues for Rural Marketers in India1. Lack of Advanced Infrastructural Amenities- The foremost lacking comes importantly when we talk about rural area is the infrastructure. In comparison of urban and semi-Urban areas the level of infrastructural facility is low. The state and local government is making their best efforts for the development of infrastructural facilities like electricity, roads and banking services.
2. Frequently dependent on Seasonal Earnings- As the rural population of India is fully dependent on the agricultural produce which also dependent on the seasonal changes. Hence the behavior of rural population on the consumption and buying is fully depended on the seasonal earnings. The demands get on higher rates when they earn their seasonal profits.
3. Traditional living Lifestyle- The rural population of India after so many development in the standard of living in the people of Urban India still living in the traditional environment which they do not want to change and do not want to adopt the new living lifestyles as the urban people do. They are still not so much of comfortable in adopting the new things.
4. High but scattered Market Vicinity- Rural market in India is high on rates as compared to the urban market which we have discussed in the portion of overview of Indian Rural Market. The consumption rate is also high like FMCG products. But there is no second thought in saying the rural market is high in comparison to urban but also it is scattered in vast Indian Geographical area. This is not possible for the marketers to reach each and every major areas of the India.
5. Unavailability of Media and Promotional Tools- In case of any product the effective promotional or marketing strategies plays a very significant role for the success of an organization and their sales. But in case of rural marketing there are very less scope for the utilization of that promotional and media tools because of their literacy rate and the advanced facilities.
6. Numerous regional languages- This is also one of the most important issues which is faced by the marketers while framing the rural marketing policies because as we know the rural market is high but scattered in the vast area but in addition to this there is also the language or communication problem the rural area. They have their own different language to speak and understand between them which is not easily understandable by the markets and also not easy for the marketers to make their policies on their different languages.
7. Low Literacy Rate- In comparison to the urban and semi-urban people of India the literacy rate and education level among the people of rural population is low. This is again the problem for the marketers to communicate their products and its benefits in an easy manner. The rural population of India does not get enough facilities for education.
8. Ease of availability in cheap and duplicate Products- People in the rural area get easily attracted towards the cheap and duplicate brands, especially in the case of FMCG Products. The reason is they find themselves comfortable with the short term products which is consumable in a short period of time, this is the reason the local brand can raise their sales in the rural areas. It becomes difficult for the markets to endorse their quality goods to rural people all because of their buying behavior towards the local brands.
9. Poor Transport and Distribution Channel- Again, the one of the major issues that the marketers still face in Rural India is the poor distribution and transportation facility. In rural areas its bit difficult to make a proper distribution channels as in the case of Semi-urban and urban areas. They get a proper distribution channel through the warehousing and transport facility purely based on the consumer demands. But in rural area the marketers still facing this problem.
3.2 Opportunities of Rural Market (Reason’s to adopt Indian Rural Market)
The Indian rural market has grown up at a increasing rate compared to the past years. The rural people increased their level of saving up to 30% more than the people of Semi-Urban
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and Urban Population. The statistics shows 53% of all FMCG and 59% of all consumers durable products are sold in the rural area (Kumar, 2013).
The major opportunities for the rural marketers are as follows:-
1. Outsized Market- According to the latest survey done by the “Ministry of Statistics and Programmed Implementation” the 68.86% of Population is living in Rural India and 31.14% lives in urban areas. As the population is increasing at growing rate the consumable demand is also increasing with this. The marketers have a great opportunity to endorse their product.
2. Elevated Income Groups- As the rural population of India is purely based or depends upon the seasonal incomes or profits, their majority of higher incomes groups are increasing day by day. They are making more money through the increased production by improved production technique and methods.
3. Parallel preferences and choices- The less awareness of substitute products or brands makes an opportunity for to rural marketers as their preferences level and choices of different products are slightly the same. Through this opportunity the marketers can target or attract the larger population at or through the same promotional strategies.
4. Speedy expansion of Infrastructural Capability- Through the help of various government initiatives the most of the areas of the rural population is now connected with the Semi-Urban and urban areas of India which results in the easily supply of consumable products to the people of rural people.
5. Gradually more Education and literacy rate- Government is now also taking initiatives on increasing the education or literacy level among the pollution of rural India through the various programmes and schemes. Rural population is now capable of being understand the difference between the various brands and their utility through the use of broadcast media and internet.
6. Amplified Population results in Increased Demand- A per the latest report of
“Ministry of Statistics and Programmed Implementation” India is the most populated country in the world after China. In 2019 population of India is 1.37 billion or 1,369 millions. This is higher than the year 2018 i.e. 1.354 billion at a increased population growth rate of 1.08%. This statistics are helpful to let us know the increased demand of the FMCG and consumable products especially in rural India.
As the population of rural India is increasing at a growing rate the demand of the products is also increasing with this. Strategies for Rural Marketing In the recent past year the rural marketing has achieve the vast growth in the various sectors. Before this there was poor distribution channel and unorganized market structure. Now, taking into consideration various technological changes, government initiatives in the development of rural areas and the interest of the consumer there are many strategies that the companies can adopt to increase their market share in rural areas.
1. Trouble-free communication for Rural Consumer- The product or services must the communicated to the consumer in a trouble free manner which is easily understandable by the rural consumers and enables them to make a difference between the substitutes and the related brands.
2. Varying patterns of Rural Customers- The choice patterns of the rural consumer does not stick to the particular buying behavior or a brand, the patterns of the rural consumers changes according to their demands and preferences, this can be taken as advantage by the companies to make available them the variety of products.
3. Fruitful promotional strategies- Instead of following the traditional promotional techniques the marketers also use the modern techniques to endorse and promote their product to the rural area to attract the customer attention. The rural consumers are more flexible to adopt the new methods or things.
4. Developing rural specific products- The companies can also the work on making the rural specific products as to fulfill the requirements of the consumers as taking this into consideration the demands and need of rural consumers are different then the demand and need of the urban consumers. Many companies already making their product basically for the purpose of rural consumer like chick shampoo and food items.
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5. Patriotism in Products or Services- As the rural people are more belongs to the nation centric persons the companies can also make their strategies on selling or producing their product which directly or indirectly contributes to the nation will.
The rural consumer easily gets attracted towards those products which belongs to the nation and also contributes to the nation.
6. Meeting consumer necessities- The consumption patterns, the buying behavior and the paying capacity with the actual demands of the rural consumer varies from the demand from the urban consumers, and then the companies can work specially on satisfying the need of the consumers and their necessities.
7. Localized and accurate distribution channel- The distribution channel and inventory management in the large business house are purely based on the demands of the ultimate consumers. But here the marketers are lacking in case of rural marketing. The proper distribution channel with the localize channels can be adopt by the marketers to make and regular supply of the desired goods.
4. CONCLUSIONS
In, India the rural marketing is a new and developing concept. In recent years it got the highest advancement as the 68.8% of Indian population lives in a rural area. The rural consumers have higher demands as compared to the urban consumers and have higher flexibility to any change. By overcoming the various challenges the marketers can get the higher rate of earning while satisfying the need of the rural consumers. The government also has a significant role and plays as the mediator between both. They should take the necessary steps to facilitate the growth of the rural market.
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