Rural Paradise for Corporates - Get, Set and Go !!!!


By

Pankaj Dhingra
Asst. Director
Institute of Productivity & Management
1, Kalyanpur, G.T. Road, Kanpur-208 026
 


The Rural Market at a glance

…With more than 6.3 lac villages and millions of potential people, having diversified rituals and tradition with enrich heritage, A land of happenings which offers bastion to Economy with impeccable natural and human resources where people are recognized for their simplicity and affectionism.  The land of vibrancy with fathomless opportunity yet ignored solicits a plank to be explored.

Undoubtedly, In recent years the impact of aggregate growth of economy has had encouraging implications upon Income distribution and subsequently buying pattern of Rural masses and simultaneously the penetration of various communicative media viz. Satellite channels, Internet, Television and cinema etc. has supported greatly in transforming consumer behavior of individuals from orthodoxial money saving to more savvy and advanced. Such media penetration in rural India has facilitated herculean changes in their aspiration level, desires and belief.  A typical villager is now turned out to be more revolutionized and advanced having Aamir Khan or Mahendra Dhoni as his frame of reference. Such sea changes in buying behaviour of Rural India can be envisaged through following facts:

    * Estimated annual size of the rural market
       *  FMCG                     Rs.65,000 Crore
       *  Durables                 Rs.5,000 Crore
       *  Agri-inputs              Rs. 45,000 Crore
       *  Two/Four wheelers   Rs. 8,000 Crore
    * Of two million BSNL mobile connections, 50% in small towns/villages.
    * Of  the six lac villages, 5.22 lac have a village Public Telephone ( VPT)
    * More than 41 million Kisan Credit Cards issued with cumulative credit of
       Rs. 977 billion resulting in tremendous liquidity.
    * More than 60% signups of rediffmail come from village and small towns.
    * 42 million rural households are availing banking services than 27 million in urban.


Why Go Rural

On account of low penetration rate in rural market there lies a vast untapped potential for the marketers. This can be supported by the fact that rural market accounts for only 31% of the colour TVs, 10% of Washing Machines, 18% of fridges, 38% of tooth paste, 24% of shampoos and 28% of face creams. The basic reason for this has been the general impression of the companies that rural marketing is nothing but the marketing of agriculture produce and other auxiliary items as tractor, fertilizer, pesticides etc. Though, even durable and FMCG products have huge potential for sale in the rural markets. A recent survey conducted by Mckinsey concluded that rural India's market size in 2020 would be US $ 500 billion. It has been estimated that rural market is growing more than five times than urban maket is. Hence rendering a platform for prosperity to corporates from there they may reach to newer altitudes of professional success.

Here are some facts about Rural Markets validating the notion of its potentiality:

* Low Penetration rates in rural markets facilitates opportunities

Durables              Urban               Rural              Total (%of rural House hold
)
Color TV              30.4               4.8              12.1
Refrigerator          33.5               3.5              12.0

FMCGs                 Urban                Rural               Total (%of rural Household)
Shampoo             66.3               35.2             44.2
Toothpaste          82.2               44.9             55.6

* Infrastructure is improving thick and fast –

* More than 40% villages are already connected by roads and in another 10 years or so 30% more will be added.
* Under the Rural Electrification more than 90% villages are electrified.
* Rural telephone density has gone up by 300% in trhe last 10 years; every 1000+ pop is connected by STD.

* Social Indicators have improved immensely during last 10 years or so

* Number of concrete made houses increased from 22 to 44% .
* Percentage of Below the Poverty Line People decreased from 46 to 27%.
* Rural Literacy has gone up to 59%.

* For Promotion and Distribution Marketers can make effective use of following infrastructure as well

* Post Offices                    1,38,000
* Haats                               42,000
* Melas                               25,000
* Mandis                               7,000
* Public Distribution shops   3,80,000
* Bank Branches                  32,000

* Distribution of households by Income

      Annual Income (Rs.)  at 1995-96 prices

 Percentage

<25,000

57.2

25,001 – 50,000 LM

29.0

50,001 – 77,000 M

8.6

77,001 – 1,06,000 UM

3.2

> 1,06000 H

2.0

Total

100.0

                   Source : Natrajan (1998)

Tapping the Opportunities

Marketing Strategy


The marketer's basic need is to comprehend the psyche of rural consumers and cater their needs in accordance. It may require intensive personal selling effort as villagers require more personal contacts to convince.. Firms should refrain from designing goods for the urban markets and subsequently pushing them to rural markets. To effectively tap the rural markets a brand must associate with their culture and personality. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriads rituals, festivals, melas etc.

Distribution strategy

A one of the ways could be using company delivery vans which can serve two purposes – it can take the products to the customers in every corner of the market and it also enables the firm to establish direct contact with them and thereby facilitates sales promotion. The mediocre companies with sizable resources may chip in for syndicated distribution. Haats and Melas could also be a great platform to display merchandise. Also, every region consisting of several villages is generally served by one satellite town termed as Mandi where people prefer to go to buy their durable commodities. If marketing companies use these feeder towns they can have a vast coverage of rural arena.

Promotion Strategy

Designing right promotion strategy is the crux of the problem. Whether to utilize universal approach to reach both rural and urban of differently tailored approach considering rural and urban differences is the first question to be answered. Design aspects include message content, structure, format and source. The message can be disseminated with the right choice of media-mix (personal and non-personal) aided by sales promotion and direct marketing efforts.

Conclusion

The rural market though, at one end is fascinating but at the same time challenging too. Looking at the challenges and the opportunities of rural market it may be inferred that future would be very promising for those marketers who understands the pulse of rural markets. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the myriads of rural consumers spread over 6.3 lac villages in rural India.

References:

1. C.S.G. Krishanamacharyulu & L.Ramakrishnan (2003) Rural Marketing, Pearson Education.
2. Pradeep Kashyap (2005) Rural Marketing, Biztantra
3. R.V.Badi & N.V.Badi (2004) Rural Marketing, HPH New Delhi.
4. www.indiainfoline.com
5. Harish Bijoor, "Creating Brand Strategies for Rural India", Deccan Herald, July, 2005.
 


Pankaj Dhingra
Asst. Director
Institute of Productivity & Management
1, Kalyanpur, G.T. Road, Kanpur-208 026
 

Source: E-mail December 21, 2006

     

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