India's rural market keeps high potential for increased consumer buying, as per the reports prepared by the NCAER. This newspaper explains the probable of the rural market and the issues of nervous about regard to rural marketing.
Rural markets have become very important to reasons of economic growth in these areas and increasing interfirm rivalry in urban market. The rural buyer is less informed, price very sensitive, more traditional and is also keen audience of T. V and video tutorial programs. Products for rural marketplaces have to be simpler, simple to use, aesthetically identifiable, affordable, communicated in an interesting style and offered by the customers' door step.
Rural consumer behavior is an extremely complex phenomenon, which needs more initiatives to understand, explain & predict. In order to get a understanding of the same, every marketing consultancy should recognize that consumer behavior is, in fact, an assumption every marketing supervisor must make, if he blueprints to hit the rural market.
The marketing program consists of numerous decisions on the mixture of marketing tools to work with. These tools consist of 4P's of marketing i. e. product, price, place and advertising. The marketing combination is considered as the sole vehicle for creating and delivering customer value.
India's rural market holds high potential for increased consumer buying, according to the reports prepared by the NCAER. This newspaper explains the potential of the rural market and the problems of concern with regard to rural marketing.
Rural markets have become important for reasons of financial expansion in these areas and increasing interfirm rivalry in urban market. The rural buyer is less informed, price hypersensitive, more traditional which is keen viewer of T. V and video recording programmes. Products for rural marketplaces need to be simpler, easy to use, visually identifiable, affordable, communicated within an interesting style and offered by the customers' door step.
Rural consumer behaviour is an extremely complex trend, which needs more efforts to understand, make clear & predict. In order to get a clear understanding of the same, every marketer should realize that consumer behaviour is, in truth, an assumption every marketing administrator must make, if he projects going to the rural market.
The marketing program contains numerous decisions on the mix of marketing tools to make use of. These tools contain 4P's of marketing i. e. product, price, place and advertising. The marketing mixture is considered as the only real vehicle for creating and providing customer value.
What Rural Means??
"Typically, from an Indian census viewpoint, rural has been identified with a 'deprivation' orientation, rural being truly a landmass without usage of continuous electricity, drinking water, the stock market. There has been a modification in this view, however. Marketers today define rural as people living a new lifestyle instead of that of those who have resolved in the larger cities and cities. Rural is thought as pastoral in characteristics so that a mass of men and women who connect their income carefully to the lands they till or use to improve their cattle and livestock".
"The Census of India defines urban India, " says Gupta of TSMG. "Urban India constitutes places with a human population of more than 5, 000, a populace denseness above 400 per square kilometer, all statutory towns, that is, all places with a municipal corporation, municipal table, cantonment mother board, notified area council, etc. and with 75% of the male working human population involved in non-agricultural career. All non-urban is rural. "
In simple words, we can say that rural India is a less developed countryside where the infrastructure is primitive, homes are of dirt or brick but seldom painted well, the principal way to obtain livelihood is agriculture, occupations in the organized sector are negligible, eating alternatives are restricted to home-cooked, simple food, academic institutions are far away, health facilities are rudimentary.
It refers to a set of actions, techniques, tools or variables a company uses to market and markets its brand and product in the marketplaces. The 4P's of marketing combine are:
Product: refers to whatever is capable of or can be offered to gratify need or want?
Price: identifies the amount customers have to pay in order to get a product or services.
3 C's of pricing
Cost of Company
Place: identifies point of sale
Promotion: This refers to all the actions undertaken to make the product or services recognized to and preferred among the consumers.
The Rural Market Environment in India
"The marketing man is a decider and an designer- a mixing machine of materials, who sometimes follow a recipe, produced by others and sometimes prepares his own recipe. And, sometimes he adapts his formula to the ingredients that are plentiful and sometimes invents some new substances, or tests with elements as nobody else have exhausted before. "
This newspaper is emphasized on understanding the marketing environment as it's the success key to effective marketing management for rural marketing. The rural market environment requires a separate assessment as it differs significantly from that of the urban market. The rural customer shows distinctive characteristics making him/her not the same as urban buyers.
1. The Rural Consumer:
Size of Rural Consumer Group: We all know that the center of India lives in its villages and the Indian rural market with its huge size and demand bottom offers great opportunities to marketers. 12. 2% of the world lives in Rural India and to successfully touch this growing market is every marketer's fantasy.
Characteristics of Rural Consumer Group
Location design:-Though the aggregate size is large, individual subsets of this market tend to be alternatively small and disparate. Geographical, demographical, statistical, logistical variations are very clear. Each one of these market sections differs and requires different ways of be formed. The facial skin of Indian agriculture is changing from dried land and irrigated agriculture into high-tech and low-tech agriculture. Farmers in says like Maharashtra and Andhra Pradesh have reaped the great things about adopting new age farming practices. It has radically improved the economics of farming, with the investment in these systems bringing down the price tag on cultivation, increasing produces due to included crop management tactics and reducing the reliance on rainfall. Because of this, disposable income is continuing to grow sharply. The aspirants are becoming climbers displaying a sustained financial upturn as purchasing vitality is increasing in the rural market segments. Further, because of the diversity of this market, marketers need to think, plan and action locally. Hence, it is necessary to develop a precise Marketing Mixture for reselling to rural India.
Socio-economic position: - The unexpected lure of rural India can be related to the socio-economic changes sweeping rural areas today. Increased production meant more income in the hands of the farmer who now wished to buy the same products as his/her urban counterpart did. The process of income generation & creating expect better specifications of living was also accelerated by companies and banking institutions implementing villages for an integrated rural development. So, while fertilizers companies' affinity for adopting villages place in increasing consumption of the products, companies like TISCO, TELCO & ITG made it an integral part of their social commitment. The Integrated Rural Development Program encompasses education, health, modern farming techniques, land development & co-operative marketing of produce.
Culturally a Diverse and Heterogenous Market:-The rural market isn't only a spread market, but is also diverse & heterogenous. Rural consumers are diverse in conditions of religious, public, ethnical & linguistic factors. Various tiers can be found, with regards to the earnings like those of Big Landlords, Trades, Small Farmers, Marginal Farmers, Laborers' & Artisans.
State to State Variation in Magnitude of Development:-There is also great deal of difference between different claims in degree of development. The study provided by IMRB demonstrates each sate have different various parameters such as availability of health & education facilities, option of public move, electricity, TV transmission, post office buildings and water resource & so on.
Literacy Level:-It has been approximated that rural India has a literacy rate of 28% weighed against 55% for your country. The picture has been changing over the years. For e. g. a decade ago, the literacy rate in rural India was only 20%. The adult literacy programmes launched in the rural areas are bound to enhance the rural literacy rate in the a long time.
Lifestyle:-The rural consumers are marked by the conservative and traditional bound lifestyle. But the fact is that the approach to life is undergoing a substantial change. The change can be related to several factors such as:
Growth of income & change in income distribution
Growth in education
Enlarged multimedia reach
Growing conversation with urban communities
Marketers' efforts to attain out the rural market.
Buying Behaviour Undergoes Major Change
In recent years, some convergence in aspirations seems to be taking place between your urban and rural marketplaces. The trend seems to be stronger among younger generations. It really is been discovered that aspirations of children are same in both metropolitan & rural market, the sole difference is that rural youth are still not in a position to follow their dreams as that of metropolitan youth.
No stereotype Rural Consumer: - The low purchasing electric power/ low per capita income & low literacy level are the common qualities of rural consumers. Rural consumers are traditional-bound, with religious beliefs, culture & traditions highly influencing their ingestion habits. But still, the rural consumers do not discuss the buying behavior. You will find consumers who are able high-priced brands and are also ready to buy. There is certainly thus great range and dependence on segmenting the rural market based on buying action.
2. The Rural Demands
Steady Development: - The recent NCAER publication "THE FANTASTIC Indian Middle Class" further reveals that the Indian middle income consisted on 10. 7 million homes or 57 million people of which 36 per cent resided in rural areas. No surprise, the rural market segments have been a essential source of expansion for some companies. For a number of FMCG companies in the united states, over fifty percent their annual sales result from the rural market. Although with the large improvement in purchasing electric power, increasing brand awareness, changing consumption design and rapid get spread around of communication network rural india offers various opportunities for marketing expert.
Composition of Rural Demand:- Many new products have entered the consumption basket of the rural consumer, they may have began buying and utilizing a variety of modern products, that have been mysterious in the rural market. There are many products that have already more developed in the rural market such as packed tea, bath soaps, washing soaps, detergents, basic safety razor cutting blades, scooters, motorcycles etc. On the other hand there are many products, the rural market has overtaken the metropolitan as the demand of motorcycles is also more in the rural market than the metropolitan market.
Product: Product for the rural market must be built or improved to suit the approach to life & needs of the rural customers. The rural market is not really a homogenous set of customers with choices frozen in time.
The company should keep in head that before expanding the merchandise for rural market, marketers must identify the typical rural specific needs. Urban products cannot be dumped onto rural marketplaces without modifications. For instance, shampoos or soaps with distinctive, strong rose or jasmine perfumes are incredibly popular with the rural ladies in South India. The urban women do not identify as highly with these perfumes. Sachetization is also a distinctly rural-driven phenomenon. As demand in a number of categories has been created, intensity useful is quite low. Typically, rural folk would use a shampoo only once weekly. Habits take time to change and making unit sachet packs affordable is the main element to inducing trial and buy. Systematic, in-depth research that will help understand the depths of the mind of the villagers, their buying conditions, purchase patterns and purchasing ability are an important input while growing rural specific products.
In the rural market product creators should target at removing all the cost-adding features, i. e. , features which a rural consumer is unwilling to cover as he sees no obvious electricity. This might "redefine value" in the heads of the buyer and immensely increase product acceptability.
The product ways of be implemented in rural market:
Newly/ Modified product
Utility Oriented product
Avoiding complex packaging
Application of Value Engineering
Small device packaging
Induce rural customers to buy and try the new product i. e trial by low device packs, Sachets(HLL), Cavin Good care -Chik, P&G-Vicks Vaporub, Godrej with 6ml sachet, One Rasna sachet can make six eyeglasses Sociable & Cultural variations
Combi- Packages - Colgate offers toothbrush with small toothpaste
Family Packs-Britannia, Priyagold
Price: The villagers because of the price sensitivity are very cost sensitive. This will not mean that a rural consumer is a miser. He is not simply looking for the cheapest product rather he recognizes and demands value for money in every purchase that he makes. Pricing therefore is a direct function of factors including cost-benefit benefits and opportunity cost. Rates wanted to consumers should be for value offerings that are affordable.
The consumer wants tangible price advantages today. It is assumed that rural consumers believe in "smart buying". A study revealed that the average rural consumer takes approximately 2 years to select buying a watch! He will not achieve this unless he's totally confident that he is getting affordability. Impulse buys and purchases are incredibly rare when considering the "affordability" factor that reigns supreme generally in most rural purchase decisions.
It must be kept in mind that the rural consumer doesn't have a budget problem. He has a cash flow problem. It is because the community folk receive cash only twice yearly. At these times, he is with the capacity of making high size buys. So, when there's a cash flow crunch, marketers need to provide financial loans, schemes or alternatives that suit the needs of the rural society.
The Pricing Ways of be implemented in rural market
Large volume- low emerging
Overall efficiencies and passing on advantages to the consumers
Low cost/value for money products
Low volume-low price
Low cost products i. e Clinic-plus in 50 paisa, one rupee, two rupee pack, Colgate at Rs. 50 /-
HLL derives 50% of its revenue from rural areas, sells Lux hair shampoo in a four milliliter sachet coming in at 50 Paisa and six-milliliter sachet priced at one rupee
Place: A village as a speed of promotion, circulation and use is completely different from town and city. The most crucial link in ensuring the success of rural marketing work is distribution. In Rural India, the choice and use of circulation stations is a headache. As with Rural India's 3 million shops are situated in 6. 3 lakh villages. Thus, marketers are confronted with the situation of feeding 3 million outlets located in vastly diverse areas each which records an average sale of only Rs. 5, 000 per wall socket. Further problem is that even this sales is mostly on credit. The diversity in the syndication of shops is the self-limiting element in terms of servicing the rural circulation network.
Rural distribution has a rigid hierarchy of market segments that make channel decisions relatively organised. It is essential for rural marketing companies to comprehend this hierarchy. Rural folk are habituated to touring once a week for their each week buys to a satellite town. For durables where the outlay involved is normally large, the purchase would be produced in an set up market for reasons of preference and availability of adequate cash flow. It is therefore not necessary for a marketing expert of TV sets to consider their distribution route all the way down to the town shop. A Television will not be sold there as the cash flow will not exist at that point in the hierarchy of marketplaces. A tv set distributor must be present at assembly market segments which can be much smaller in number, more controllable, much easier to reach and service. Keeping the hierarchy at heart will help decide the optimum level of penetration required to reach a crucial mass of rural consumers.
Haats will be the nerve centre of Rural India. They can be a readymade syndication network embedded in the textile of rural contemporary society for over 1000 years. Right from enough time of Chandragupta Maurya, Haats have emerged as a location for social, ethnical and economical interchange. One in every five villages with a human population of over 2000 has a haat. A whole lot of re-distribution also occurs through haats. This is because, a large number of vendors and sub-wholesalers obtain haats for his or her village stores. What's most attractive to marketers is that 90% + of sales in haats are on cash basis. Usually, in village outlets a whole lot of credit sales take place due to the fact that in a little geographic part of a village, everyone knows everybody. Apart from the 90% cash sales, 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit. Also attractive to companies wishing to use the machine is the reduced selling overheads. Contribution fees at haats are a set Re. 1 to Rs. 5 per stall which rate is common to a huge like Hindustan Lever and the smallest local retailer.
Distribution costs must be reduced through most effective usage of the network. Thus, making use of haats in the distribution strategy of the rural marketing organization advertising consumer goods and FMCG products (typically once a week purchase items) is a tremendous opportunity. Perhaps the other most important factor to consider while developing rural distribution strategy is that the move from transactional marketing to romance marketing is most apparent in the village market. A strong bond must be created with every consumer even in the remotest villages and smallest town.
The distribution strategies to be used in rural market:
Covering of villages having population above 2, 000
Distribution to feeder market or mandi town
Direct contact with rural retail.
Example: Samsung truck displays all the merchandise, the business has tied up with local distributors to showcase the Samsung range in local melas.
Promotion: Campaign aspects always build a obstacle in rural areas as they have a very thin population denseness but are spreaded in the large remote area.
There are a whole lot of barriers that militate against homogenous mass media and note delivery. The rural consumer loves to touch and feel a product before making an option. Demonstrations are doubtlessly the most effective promotional tool that patterns purchase decisions of the rural populace. In today's information era, it is very important for companies to wise-up on growing technologies. It includes in fact become a medium to draw in larger followers for a product demonstration. Technology can be used to prepare a data source of customers and their requirements. The use of training video using mobile vans and even large screen video wall surfaces at situations should be assemble. Several aesthetic communication and non-verbal communication are used by the companies to attain the rural audience as large proportion of the rural population cannot read or write. Moreover, in rural India, the word of oral cavity is the main element influencer. Intermediaries will be the groundwork to rural syndication. In case the intermediary understands and is constantly reminded about your product, then the end user will never be allowed to forget. The re-use capacity and color of the box where the product is crammed is also an essential factor. Infact, reusable packaging is considered a serious assist in promoting sales for products in the rural market. Consumer and Trade strategies such as discounts, off season discounts, free samples, etc. encourage spending. Lucky draws and gift schemes are a significant hit generally in most states. The use of local idioms and colloquial expressions are a great way to hit a rapport with the rural consumer and must be borne in mind when developing press plans and public relations programmes. The rural consumer is very right down to earth but evenly discerning and marketers need to step in to the shoes of the rural folk while creating product campaign promotions. Another unique feature of rural market segments is that your choice making process is collective. The people mixed up in purchase process - influencer, decider, buyer, one who pays off can all be different. So marketers must talk about brand emails in their promotions at several levels. Aside from regular household goods, several agribusiness companies have also started providing gift strategies with offers for free jewellery that affects the girls to pressure the farmers to get agricultural inputs from select companies. This advertising strategy thus makes women influence purchase decisions that they might ordinarily not be involved in.
Youth power is becoming increasingly apparent in villages. Rural youth bring brand knowledge to the homeowners. This has compelled several companies to change the emphasis and positioning with their products and services towards this portion that keeps growing in absolute quantity and relative effect.
The promotional strategies to be implemented for advertising in rural market
1. Motion pictures on products like Vicks, Lifebuoy, Colgate and Shampoos are shown in rural cinemas halls.
2. LIC and Private insurance firms have been showing short videos in rural theatres to make awareness about life insurance
People:-An essential component to any service provision is the use of appropriate personnel and folks. Consumers make judgments and deliver perceptions of the service based on the employees they connect to, therefore it is necessary for the firms to provide proper training to their staff. Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying for.
Process:- It identifies the systems used to aid the company in delivering the service. Banking institutions that send out Credit Cards automatically when their customers' old you have expired again require an efficient process to recognize expiry schedules and renewal. A competent service that replaces old bank cards will foster consumer devotion and confidence in the business.
Physical Evidence:- Physical Facts is the aspect of the service combine which allows the consumer again to make judgments on the company. If you head into a restaurant your anticipations are of any clean, friendly environment.
Physical evidence is an essential element of the service mixture, consumers can make perceptions predicated on their vision of the service provision that may have an impact on the organisations perceptual plan of the service.
When Coca -Cola re-entered the Indian Market in the middle-1990's, it got the high highway to marketing and got nowhere. Recently it re-invented itself and its own TV commercial exhibited Bollywood star Amir Khan first as a Punjabi Farmer and also in other rustic tasks in different elements of India. Coca -Cola offered by Rs. 5 a container Result was within weeks Coke could reach out to rural people in good sized quantities around India.
When Arvind Mills uncovered even the cheapest brand cannot make dent in the rural marketplaces. It created ready-to-stitch Ruf&Tuf Denim jeans with price as low as 195 a Piece The Jeans were allocated using local shops in villages with society up to 5, 000. Tailors were trained and given Machine accessories needed to stitch heavy denim In about 12 months and a half Arvind sold 50 Lakh Rug & Tuf kits because it had beaten the lowest-priced organized sector jeans around Rs. 300 at that time
Today, the rural market is blooming with the increase in the disposable earnings of the households. By nature, rural marketing is sophisticated and studying the conception of rural consumers is often a difficult process unlike that of metropolitan consumers. An effective communication not only provides information about products, but also educates the consumers regarding the use of products. Therfore, it is necessary that rural consumers need to be thoroughly studied in order to have better understanding of rural marketing and work out appropriate marketing strategies.
The fact of modern marketing theory is to satisfy the customer, and in a natural way all the marketing activities should revolve around the clients and their buying behavior. The consumers need to be guided in the correct direction in order to make a decision. There's a necessity to raise the emotional participation of consumers to be able to prevent brand defection.
The marketers must know that rural marketing is generally developmental marketing & must be inclined to take an approach of 'market seeding' in the initial stages.
It is often said that marketplaces are created, not found. This is particularly true of the rural market of India. It really is a market meant for the truly creative internet marketer.