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CHAPTER 1INTRODUCTION
Increasingly, more companies are turning to rural markets to expand the scope of their operations and also to pre-empt competition. Rural markets are tomorrow’s markets andthe marketer should know how to penetrate these markets. This is not just because 70 percent of India’s population still lives in rural areas, but because of the sweeping changesthat are occurring here.Rural markets are today important for all consumer product companies. This is becausemost urban markets are getting saturated. The intensity in competition in these marketsimpacts the profitability of firms. The rural markets have also gained prominence becauseof the socio-economic changes, which are sweeping rural India. The cables and satellitetelevision as also by the Internet and telecommunication are fueling these changes. Thishas enhanced rural consumer’s awareness and aspirations. Also concerted attempts are being made by self-help groups to generate incomes in the poor areas, which, in turn ishelping create demand for product and services.Ten years ago, foreign consumer products were scarce in India and only available to theaffluent. Import restrictions prevented or severely hindered foreign consumer goods fromentrance to India. With the economic liberalization that ensued, foreign brands are now prevalent across India (Luce, 2002). For the rural consumer, access to product or serviceis more critical then just its ownership. Rural marketing therefore requires an innovativeapproach. It involves changing the value paradigm by altering product’s price- performance relationship. It also involves designing products that can deliver in suboptimal condition and despite infrastructural constraintsToday, multinational corporations view emerging markets such as India as primeopportunities for growth. According to Shanthi Kanaan, writer for The Hindu, ruralmarkets are growing twice as fast as the urban markets (2001). With a rural populationequal to just under 2.5 times the population of the entire United States as of the 20001
 
census, the potential consumer base is astounding. But generally speaking, success inIndia’s rural markets for multinational corporations has been mediocre at best. It is fromthese struggles and failures, however, that multinational corporations seeking to enter therural Indian market can learn how to do so more wisely.The marketer has three strategicoptions, namely extension of urban strategy to rural markets and finally innovate for ruralmarket success. The challenge today lies in developing relationship-marketing programmefor rural buyers especially since various banks have already issued 41 million kisan cards.
JUSTIFICATION OF RESEARCH
2
 
There are two schools of thoughts persists. The first school believed that theproducts/services, marketing tools & strategies that are successful in urban areas,could be transplanted with little or no more modifications in rural areas.However, the second school saw a clear distinction between urban & rural India,& suggested a different approach, skills, tools & strategies to be successful in ruralmarkets.To have a close look over rural market scenario and marketing strategies followed by different corporate firms and types of product and service offered to consumersof rural market are the major factors, which motivate us to do this research. Here we explore the basic 4A approach which is necessary to penetrate in to the ruralmarket and distribution system of product delivery.Thus, in a large rural economy like India’s, rural marketing has emerged as animportant & distinct internal sub-division within the marketing discipline. Thissub-division clearly highlights the differences between rural marketing &mainstream marketing. Further market could be explored on the basis of income,infrastructural & socio-cultural factors..
CHAPTER OBJECTIVE
3
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