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Our country is endowed with a good degree of ethnic and regional diversity. About three-fourth of the total population resides in the rural areas and majority of them are dependent upon agriculture for their subsistence. Agriculture contributes about 24.7% to the Gross Domestic Product (GDP) of the country. It also contributes about 13.1% to the total Indian exports. This sector provides employment to 58.4% of the country's workforce and livelihood to more than 650 million people. Despite this fact, the condition of these people has not shown any significant improvement. The development of the nation largely depends upon the development of the rural population. Mahatma Gandhi had once said: "India's way is not Europe's. India is not Calcutta and Bombay. India lives in her several hundreds of villages".
Rural Market Potential
India is an agro-based economy and the growth of most of the other sectors of economy is driven by rural demand. Urban market is reaching towards the saturation point, thus bringing in and urgent need to focus on rural development. Moreover, more than 70% of India's population lives in villages and constitutions a big market for industry because of increasing disposal incomes and awareness level. In comparison to just 5,161 towns in India there are 6,38,365 villages in India. This in itself is an indicator where the real India resides. Companies are realizing slowly but surely that the key to gain true market leadership lies in tapping the rural potential. However, the rural sector in India suffers from different kinds of problems. Some areas are having enough money but their level of awareness and hence consumerism is very low. But there are many areas where economic empowerment, education, health etc., are major problems.
Challenges in Rural Marketing
Though rural markets are a huge attraction to marketers, it is not easy to enter the market and take a sizeable share of the market, in the short time due to the following reasons.
There are not enough opportunities for education in rural areas. The literacy level is as low (36%) when compared to all- India average of 52%.
Demand for goods in rural markets depends upon agricultural situation, as agriculture is the main source of income. Agriculture to a large extent depends upon monsoon and, therefore, the demand or buying capacity is not stable or regular.
the market has to undertake specific sales promotion activities in rural areas like participating in melas or fairs. Distribution An effective distribution system requires village-level shopkeeper. Buying Decisions Rural consumers are cautious in buying and decisions are slow and delayed. therefore. reach of formal media is low in rural households. Media for Promotions Television has made a great impact and large audience has been exposed to this medium. hence if Indian industries concentrate on rural markets their sales will increase. Communication Problems Facilities such as telephone. do they buy the product. can restore their profits in the rural sector.Transportation Many rural areas are not connected by rail transport. Prosperity of India lies in the prosperity of every Indian. New tend of rural market Markets which are not able to face the stiff competition posed by MNCs. they gave way to prosperity.level wholesaler or preferred dealer. Reasons for improvement of business in rural area Socio-economic changes (lifestyle. fax and telegram are rather poor in rural areas. However. Kacha roads become unserviceable during the monsoon and interior villages get isolated.. distributor or stockiest at district level and company-owned depot or consignment distribution at state level. Mandal/ Taluka. even rich and educated class of farmers does not wear jeans or branded shoes. For example. economic status) Literacy level (25% before independence ± more than 65% in 2001) . They like to give a trial and only after being personally satisfied. habits and tastes. If rural markets are brought into the limelight of development. Traditional Life Life in rural areas is still governed by customs and traditions and people do not easily adapt new practices. hence no rural segment should be left untapped. Radio reaches large population in rural areas at a relatively low cost. The presence of too many tiers in the distribution system increases the cost of distribution. The market share of urban market when compared to the rural market is low.
40% villages have been connected by road.1 12. Investment in formal savings instruments is 6. 977 billion resulting in tremendous liquidity. 50% are in small towns / villages.3 82. as do 59 per cent of consumer durable sales. electricity.2 Rural 35.Percentage of BPL families declined from 46% to 27%.0 FMCGs Shampoo Toothpaste Rural infrastructure Urban 66. Current scenario of rural market LIC sold 55% of its policies in rural India.4 33. Opportunities Infrastructure is improving rapidly -In 50 years only.Rural literacy level improved from 36% to 59%. 60% are from small towns. Of the 20 million Rediffmail sign-ups. Social indicators have improved a lot between 1981 and 2001 -Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to 23%). 5. said its head Pradeep Kashyap at the seminar.2 55.42 million rural households (HHs) are availing banking services in comparison to 27 million urban HHs. 50% of transactions from these towns are on Rediff online shopping site. Of two million BSNL mobile connections. so there are many marketing opportunities Durables CTV Refrigerator Urban 30. the specialist rural marketing and rural development consultancy has found that 53 per cent of FMCG sales lie in the rural areas. Low penetration rates in rural areas.9 Total (% of Rural HH) 44.22 lakh have a Village Public Telephone (VPT).6 million HHs in rural and 6.2 44.5 Rural 4. in next 10 years another 30% would be connected. More than 90% villages are electrified.8 3. with cumulative credit of Rs. Rural telephone density has gone up by 300% in the last 10 years.0 lakh villages.6 .41 million Kisan Credit Cards have been issued (against 22 million credit-plus-debit cards in urban). media) Increase in income Increase in expectations MART. every 1000+ pop is connected by STD. Infrastructure facilities (roads. though only 44% rural homes have electric connections.5 Total (% of Rural HH) 12.7 million HHs in urban. Of the 6.
000 Proliferation of large format Rural Retail Stores. colleges.000 3. . Jobs will be more in rural areas.they want to use all technical facilities and technical improvement means opening FMCD market and availability of products. may have few challenges to promote or extend the business for traditional factors but most of then we can ignore . Lead the life with urban people s life style. road. Lastly we can say now fmcd have a growing market in rural areas with fmcg.and for it need developed communication . Now central govt taken new new project to developed rural areas and investing more money to developed rural infrastructure.because life have been changed of rural people. Changing life style give a hungrily of modern technology.000 32.000 42. RURAL areas people are more depended on agriculture but now they are getting another income sources so developing their economic condition its result can effort to bring modern technology to their home. computers . 40 crore FMCD S OPPERTUNITY Above the current data we can understand that the rural market is growing market.v program.internet. They are using now internet. increasing school. which have been successful also DSCL Haryali Stores M & M Shubh Labh Stores TATA / Rallis Kisan Kendras Escorts Rural Stores Warnabazaar.38.Post Offices Haats (periodic markets) Melas (exhibitions) Mandis (agri markets) Public Distribution Shops Bank Branches 1. Maharashtra (Annual Sale Rs.80.by the telecom services network is working so increasing the demand for mobile phone . with all facilities people life style will be change more an more. hospital etc and opening new branch of every department. using mobile to contact with cities.000 25. Subsidiaries of government to developed the rural business have given more scope to expend the business . So their develop need and wants also increased more expectation . which will bring demand of fmcd products. Now people are being educated. they keep information about the national and international market. Being educated also growing their interest to learn more.000 7. watching t.
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