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28289259 Rural Marketing

28289259 Rural Marketing

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IT IS A BRIEF OVERVIEW OF RURAL MARKET.
IT IS A BRIEF OVERVIEW OF RURAL MARKET.

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Published by: omlata_choudhary5061 on Sep 14, 2010
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10/31/2011

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Chapter.1 Profile of Rural Marketing1.1Introduction to Rural Marketing1.2Definition of Rural Marketing1.3Statistical Approach to Rural Marketing1.4Evolution of Rural Marketing1.5The Reasons to Prefer the Rural Areas1.6Characteristics of Rural Marketing1.7Classification of Rural Marketing
 
Profile Rural Marketing
1.1Introduction to Rural Marketing:
The rise in rural marketing provided volume growth to all leading companies inthe beginning of 90’s. Rural markets are facing many challenges to target rural markets.Higher rural incomes driven by agricultural growth have increased the purchasing power to consume branded and value-added products in rural areas. Marketers andmanufacturers are increasingly aware of the purchasing power, size and demand base of the Indian hinterland. Efforts are been made by them to understand the attitude of ruralconsumers.Marketers want to follow the principle of WALK THEIR WALK and TALK THEIR TALK. Marketing mix is framed according to rural tastes and lifestyles.For example: MIRC ELECTRONICS, which owns the Onida television brand, launchedIGO, which was positioned as a value-for-money brand targeted at rural markets,especially customers who were upgrading their black-and-white TVs, which constitutes65%
 
of the total colour television buyers. The ad campaign screamed loudly in rurallexicon: “kasam se, kya TV hai!”
1.2Definition of Rural Marketing:
According to Prof. Ramkishen Y
,
“Rural marketing is the process of developing, pricing, promoting, distributing rural-specific goods and services, leading toexchanges between urban and rural markets, which satisfies consumer demand and alsoachieves organizational objectives.”Let us understand this definition and its implications: -
Rural marketing involves a two way marketing process.
Every want is backed by an ability and willingness to buy. These are knownas ‘demands’. Marketers are now trying to satisfy the rural demands bycustomizing the products and manufacturing the products as per the demand.
1.3Statistical Approach to Rural Marketing:
Government agencies like IRDA (Insurance Regulatory and Development Authority)and NCAER (National Council for Applied Economic Research) define ‘rural’ as“villages with a population of less than 5,000, with 75% of the male populationengaged in agriculture, etc.”
Two-thirds of the country’s consumers live in rural areas, which are around 700million people, and almost 26% of the National income is generated there.
10 consecutive monsoons have led to 26% of GDP as returns from agriculture. Thishas increased their purchasing power.
India is divided into 597 districts, and has 6,38,667 villages, of which 32% can bereached as they are connected by pucca roads.
 
However, 68% of the rural market lies untapped due to various reasons ranging frominaccessibility to lack of awareness.
In all there are more than 3.8 million retail outlets in rural India, averaging 5.8 shops per village.
The rural market has been growing at 3-4% per annum, adding more than 1 millionnew consumers every year.
It now accounts for close to 50% of the volume of consumption of fast-movingconsumer goods (FMCG) in India. As a result Rural India is becoming an important part of the marketdevelopment strategies of all FMCG and consumer durables companies as well as servicecompanies.
1.4Evolution of Rural Marketing:
The Glorious Past (1940-1990):
 
In 1949, Asian Paints was the first company to enter rural markets. In 1960HLL saw rural markets as an opportunity and entered with lifebuoy soap. Today HLLdominates rural markets and have its presence in more than 1 lakh villages. Major playerslike Colgate and Dabur followed in. in 80’s companies like Nirma
,
Cavinkare, andMarico entered
 
rural markets. MNC’s like P&G (Proctor & Gamble) also found potentialin rural markets.The Pulse of the Present (1990-2000):
 
Around 70% of the population lives in rural India, which is almost700 million in number. A 1% increase in their purchasing power can lead to an increaseof Rs.10,000 crores in the government revenues. Cos. Are launching a range of productsto cater to the changing lifestyles in rural India. MNC’s like LG, Samsung, Revlon andinsurance biggies like Birla Sun life, Max New York Life and Prulife are entering ruralmarkets in a big way. But till today these have altogether tapped only 1-lakh villages outof the 6-lakh odd villages.
1.5The Reasons to Prefer Rural Areas:
 
Presently, companies operating in India are left with only two options,i.e. either to go Global or to go Rural. The cost of going global is very high and also it’stough to penetrate markets in other countries. Rural India is emerging as a large marketfor a number of goods and services. So, it’s better to target the rural market. Marketersfind a similarity between the criticality of rural as well as urban markets. Some reasonsfor the same are listed below: -a)Saturation of urban markets: There is cutthroat competition in urban markets. Dueto the wide variety of choices of products, it becomes difficult for existingcompanies to maintain their market share. Compared to urban markets, the ruralmarkets provide better opportunities.

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