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Assessing the Marketing for Rural India

Assessing the Marketing for Rural India

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Published by: monu_85 on Mar 06, 2010
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Assessing the Marketing for Rural India
Dr. Venkatesh Tamlurkar
Faculty Member
ICFAI School of Marketing Studies
4th Floor, Astral Heights, Road No.1, Banjara HillsHyderabad-500 034
In 2005, Hindustan Lever Limited had a contribution of Rs. 5,000 crore from therural market that was a whopping 50 percent of its total sales turnover. Anotherlarge corporate house LG Electronics that had a total turnover of Rs. 4500 crore hada share of 55 percent from the rural and semi-urban market. With such kind of contribution from the rural India, corporate houses perceived great opportunity inthe rural markets and tapped the countryside to enlarge their market share.Rural marketing is the much talked about subject for the business establishments –especially the FMCG and the consumer durable industry. A large number of companies have made a big headway by focusing themselves on rural markets. Itproved to be an opportunity rather than a problem for the marketers to concentrateon rural markets and the poor. Many of them who had earlier ignored this segmentdue to lot of investment requirements and low returns have again started forayinginto it and targeted the rural masses. They attempted all the feasible approaches tosell the products to the rural consumers that met their lifestyles and living standards.Several large companies like HLL, ITC, Coca-Cola, LG, Britannia, Philips, Colgate-Palmolive etc., penetrated aggressively into the rural markets and spent heavily inthe rural areas. Some of them even invested money to create separate sales andmarketing teams exclusively for rural markets. They also appointed specialistagencies who could advise them on rural marketing.But all said and done, how far were the companies successful in offering theirproducts to the rural consumers? This remains a big question for the management of these corporate houses. Most of the products purchased by the rural masses were attimes used for some unusual purposes other than what they were basically made ormanufactured for. Like the Godrej hair dye is used by the rural consumers forapplying on their buffaloes to make them look immaculate black before displaying inthe market for sale. Of course, if viewed optimistically, this in one way gave scopefor the companies to market their product in an innovative way and also push up thesales figures further. But what about the fundamental purpose for which it wasmanufactured? There is no correlation between the kind of usage of the product andthe application of the marketer's strategies. It is a disproportionate to the extensiveresearch that a company usually does before entering a new market or launching anew product and the outcome it expects. This also gives scope to raise a query tothe marketer whether he had properly assessed his marketing strategies and thebasic requirements of the customers before planning his strategies. The company
needs to analyze this aspect before it proceeds further with dumping the products onrural consumers and thinks of capturing the rural market in a big way by any means.
The Rural Market Scenario:
The rural markets offered a huge potential to the business houses because of theirenormous spread and rising consumer demands. Around the world, over 4 billionpeople survived in rural areas that came to more than 60 percent of the totalpopulation. In India also, the ratio of rural to urban population was slightly higherthan the world's ratio with 70 percent of them living in rural areas. They domiciled innearly 6,27,000 villages spread over 3.2 million sq. km. This growing affluence alongwith good monsoon and the increased agriculture output, increased the totaldisposable income of rural consumers to 58 percent with two-third of middle incomehouseholds being in the rural market. About 40 percent of the graduates coming outof Indian Universities were from rural areas. As they are eager to earn more and livebetter, their aspirations are similar to the urban youth. It is predicted by industryanalysts that by 2009 – 10, the urban households are projected to grow by 4 percentwhile rural households are expected to grow by 11 percent. If the rural income roseby 1%, then the buying power would correspondingly increase by about Rs. 10,000crore. The colour televisions, refrigerators, air-conditioners and microwaves havebecome a household sight in villages and small townships that was long thought of as a luxury and domain of urbanites.However, rural India had its own set of problems like illiteracy, early childhoodmarriages, lack of access to birth control measures, poverty etc., that wereinterdependent on each other. There are also large numbers of daily wage earnersand most of the people depended on vagaries of monsoon. Inadequate infrastructurelike non-availability of gas supply, frequent power cuts, improper sanitary conditions,inaccessible areas were the other common sight of rural areas.
The paradigm shift:
In most of the rural areas in different parts of the country, there is considerableawareness on various latest products that are available in the market. This has beenpossible due to the penetration of cable and satellite channels that have broughtdown the world at the finger tips of the common man. The media influenced themindset of the rural consumer to such an extent that people who had money startedpurchasing the products unmindful of the costs, just to satisfy their needs as well astheir ego. But, the growth of rural market could be attributed to many other reasonsthat in one way increased the sales as well as the profits of the companies. Some of the important causes for the growth of rural markets are –* The rise in disposable income of the rural families* The economic boom* Timely rains* Rural population involved themselves in business other than agriculture* Increase white-collar jobs in nearby towns* Commercialization of agriculture* Saturation of the urban markets* Media penetration in rural areas (particularly satellite channels)* Globalization* Economic liberalization
* Revolution in the Information Technology* Women empowerment* Improving infrastructureHowever, there was a significant role of the corporate enterprises simultaneously inthe development of rural market. Their timely intervention into the rural areas, theirappropriate planning, their perception and identification about the growth of ruralmarkets and the use of marketing strategies all have equally contributed for theprogress of rural markets. Even though corporate houses were hedged with so manyproblems in the rural areas, they saw a galore of opportunities in the rural marketand converted all the pessimistic characteristics of the rural market into affirmativeattributes. They satisfied themselves with the availability of limited infrastructure,saw a sign of prosperity rather than fear during the entry of competitors into therural markets, showed excitement at the availability of satellite channels in the ruralhouseholds, visualized their cash bells ringing with the increase in purchasing powerof the rural masses that came equivalent to their urban counterparts. They traced aconstant rise in the demand for those products that were once confined mostly to theurban houses. But, blame it on the kind of awareness created by the companies –people started using the products for other purposes as seen earlier.In many villages, one can see today the alternate use of the products other than fortheir actual purpose. People in the state of Bihar feed the cattle with Horlicks as ahealth drink to fatten them! Similarly, people in Punjab use washing machine not forwashing clothes but to make frothy lassi in huge quantities! Animals are rubbed withIodex on their skins to relieve them from muscular pains after a day's hard work.Paints meant for houses are used on the horns of cattle for easy identification andtheft prevention! The weavers in North India wear condoms on their fingers asgloves to weave fine threads while its lubrication allows them fine control on threadsand protect their sensitive fingers! If companies felt happy with their increased salesand profits through this means and thought that they captured the rural markets,then it is time for them to review their marketing strategies. They should understandthat these results do not coincide with the application of the marketing tools and thetechnical expertise that are generally used to satisfy the customers as well as thecompany objectives. The implications of 4 Ps of marketing mix or the use of 4 As forsuccessful rural marketing have produced wrong results.All companies usually claim that they provide the right product at the right place atright price with right kind of promotion. Then why was a right product accepted bythe rural consumer used for different purpose? Why did he afford to spend eithermuch or less on the product that has not derived him the kind of benefit as claimedby the manufacturer? Why did the place of offer differ than to where and to whom itactually was supposed to be available? Why the right promotion has created wrongawareness in the minds of the target customers?There was something missing in the marketing strategies of the companies whileserving the rural markets. Otherwise, the results should have been more astonishingwhere the sales turnover or the balance sheet would have shown much more thanwhat is presently achieved. Though, only few products were used by the consumersin this way, that use might be the result of the accidental or wrongful application bythe rural consumers. The marketer's planning about the product and thecommunication with the target customers should be perfect that produces thedesired results.

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