A common error has been to launch a completely stripped down version of the urban product inthe rural market, with the objective of offering the lowest possible price. This is not what a ruralconsumer wants. What is required is to introduce a product with ‘essential’ features, whose needsare recognized and for which the consumer is willing to pay (value-adding features). Productdevelopers should aim at eliminating all the cost-adding features, i.e., features which a consumer is unwilling to pay for as he sees no obvious utility. This would “redefine value” in the minds of the consumer and tremendously increase product acceptability.Product development is severely constrained by legislation in the case of agricultural inputs likefertilizers, insecticides and pesticides. In the case of fertilizers for instance, though levels of deficiency of nutrients have increased significantly over the past decade, no significant changes informulations notified under the Fertilizer Control Order have taken place. This has severelyrestricted the availability of cost effective specialty fertilizers of global standards to Indianfarmers. Technological know-how for manufacture of such fertilizers exists within the country.However, farmers using modern farming practices are unable to get an assured supply of suchfarm inputs due to draconian legislation. A move to liberalize the sector could perhaps consider the accepted worldwide norm of allowing manufacturers with a strong R&D base to decide their own formulations with the government machinery conducting checks on market samples of finished products to ensure that they live up to the labeled specifications. This would be a major policy initiative that would give a huge impetus to innovative product development in the farmsector.
THE RURAL MARKET HAS TRULY ARRIVED …
Last year, LIC sold 55 % of its policies in rural India.
Of two million BSNL mobile connections, 50% are in small towns/villages.
Of the six lakh villages, 5.22 lakh have a Village Public Telephone
41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cardsin urban) with cumulative credit of Rs 977 billion resulting in tremendousliquidity.
Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactionsfrom these towns on Rediff online shopping site
42 million rural households availing banking services in comparison to 27 million urban households.
Investment in formal savings instruments: 6.6 million households in rural versus 6.7 million in urban.