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140164385 Parle Essay

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The Overview…

In our country over 70% of the total population live in villages. There are states like U.P, M.P, Bihar, Rajasthan and Orissa where rural population varies form 80 to 90 per cent. Agriculture and agriculture related activities contribute to about 75% of the income in rural areas. Over 6,31,307 villages, 700 million people a myriad of languages many traditions and a rich culture. A vibrant land with a long History. Rural Indian people are known as much for their warmth as their diversity. The real “BHARAT”.


Till recently, the focus of marketers in India was the urban consumer and by large no specific efforts were made to reach the rural markets. But now it is felt with the tempo of development accelerating in rural India, coupled with increase in purchasing power, because of scientific agriculture, the changing life style and consumption pattern of villagers with increase in education, social mobility, improved means of transportation and its various satellite channels have exposed rural India to the outside world and hence their outlook to life has changed. Because of all these factors, rural India is attracting more and more marketers.

Increase in competition, saturated urban markets, more and more new products demanding urban customers, made the companies to think about new potential markets. Thus, Indian rural markets have caught the attention to many companies, advertisers and multinational companies. According to a recent survey conducted by National Council for Applied Economic Research (NCAER), the purchasing power of the rural people has increased due to increase in productivity and better price commanded by the agricultural products. By and large this rise in purchasing power remains unexploited and with growing reach of the television, it is now quite easy for the marketers to capture these markets.

Rural marketing has become the latest mantra of most corporate. Companies like Hindustan Lever, Colgate, Palmolive, Britannia, and even Multinational Companies (MNCs) like Pepsi, Coca Cola, L.G., Philips, and Cavin Kare are all eyeing rural to capture the large Indian Market.

Coming to the frame work of Rural Marketing broadly involves reaching the rural customer, understanding their needs and wants, supply goods and services to meet their requirements, carrying out after sales service that leads to customer satisfaction and repeat purchase/ sales.

Concept of Rural Marketing…

Rural marketing is a process of developing, pricing, promoting, distributing rural-specific goods and services leading to exchange between urban and rural markets which specifies consumer demand and also achieves organizational objectives.

Rural marketing involves a two-way marketing process, however, the prevailing flow of goods and services from rural to rural areas cannot be undervalued.

Since demands’ of urban and rural folks are different, companies should manufacture products to suit the rural demand rather than dump urban products on rural consumers.

The process should be able to straddle the attitudinal and socio-economic disparity between the urban and rural consumers.

Distinctiveness of Rural Markets…

The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages, which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc. The features of Indian rural markets are: Major income from agriculture: Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with agricultural prosperity. Low standard of living: The consumer in the village area do have a low standard of living because of low literacy, low per capita income, social backwardness, low savings, etc. Traditional Outlook: The rural consumer values old customs and tradition. They do not prefer changes. Diverse socio-economic backwardness: Rural consumers have diverse socio-economic backwardness. This is different in different parts of the country. Infrastructure Facilities: The Infrastructure Facilities like roads, warehouses, communication system, and financial facilities are inadequate in rural areas. Hence physical distribution becomes costly due to inadequate Infrastructure facilities.

Rural V/S Urban…

Population Density
Trade, Industry, and Services.
Close and less monetized.
Open and Monetized.
Poor and Weak.
Abundant and Strong.
Attitude to Modernization
Tradition bound.
Ready for adaptation and change.
Family Structure
Possession of House hold assets
Attitude towards Life
Manufacturing Activity
Distribution Outlets

Profile of Rural Consumers…
Importance of customs
This however raises a fundamental problem of fathoming the differences between urban and rural markets in India. This is of paramount importance in the Indian marketing environment as rural and urban markets in our country are so very diverse in nature that urban marketing programmers’ just cannot be successfully extended to the rural markets. The buying behavior demonstrated by the rural Indian differs tremendously when compared to the typical urban Indian. Further, the values, aspirations and needs of the rural people vastly differ from that of the urban population. Basic cultural values have not yet faded in rural India. Buying decisions are still made by the eldest male member in the rural family whereas even children influence buying decisions in urban areas. Further, buying decisions are highly influenced by social customs, traditions and beliefs in the rural markets. Many rural purchases require collective social sanction, unheard off in urban areas. Another contrasting feature is the precision in the assessment of purchasing power of the consumers. In urban markets, income levels are generally used to measure purchasing power and markets are segmented accordingly. However, this measure is not adequate for defining the purchasing power in rural areas because of the single fact that rural incomes are grossly underestimated. Farmers and rural artisans are paid in cash as well as in kind. However, while reporting their incomes, they report only cash earnings, which then affect the calculation of their purchasing power. This is the reason why marketers are often surprised to find that their products are sometimes consumed by people who, according to their surveys and estimates do not have the purchasing power to do so. Every marketing manager must therefore make an attempt to understand the rural consumer better so that he can plan his strategies in such a manner that they produce the desired results.

Problems Related To Rural Marketing…

Although the rural market does offer a vast untapped potential, it should also be recognized that it is not that easy to operate in rural market because of several problems. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems. The major problems faced are:

Underdeveloped People and Underdeveloped Markets: The number of people below poverty line has not decreased in any appreciable manner. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. Vast majorities of the rural people are tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices.

Lack of Proper Physical Communication Facilities: Nearly fifty percent of the villages in the country do not have all weather roads. Physical communication of these villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon.

Media for Rural Communication: Among the mass media at some point of time in the late 50's and 60's radio was considered to be a potential medium for communication to the rural people. Another mass media is television and cinemas. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres, which is far less when compared to the number of villages.

Dispersed Market: Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. Seven Indian states account for 76% of the country’s rural retail outlets, the total number of which is placed at around 3.7 million. Advertising in such a highly heterogeneous market, which is widely spread, is very expensive.

Many Languages and Dialects: The number of languages and dialects vary widely from state to state, region to region and probably from district to district. The messages have to be delivered in the local languages and dialects. Even though the number of recognized languages is only 16, the dialects are estimated to be around 850.

Low Per Capita Income: Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. Hence the per capita incomes are low compared to the urban areas.

Low Levels of Literacy: - The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy.

Prevalence of spurious brands and seasonal demand: - For any branded product there are a multitude of ‘local variants’, which are cheaper, and, therefore, more desirable to villagers.

Different way of thinking: - There is a vast difference in the lifestyles of the people. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices.

Hurdles Faced…

With the change in the economic policies of the government, many companies have ventured into the rural markets. However, their efforts have not been sufficiently rewarded.

The various constraints can be enumerated as:-

Lack of Infrastructure: The basic facilities like roads, transport facilities, electricity, telecommunication, etc are missing in most of the rural areas of India.

Market Planning and Awareness: Lack of awareness and understanding of consumer behavior in rural markets, creates problems in formulating strategies and plans.

Designing the Products: There is a drastic difference in the utility value in the urban and rural market. A product with a particular design and pattern may not find acceptance in rural markets, but may be a success in urban areas.

Inadequacy of Channels of Distribution: Due to comparatively less focus on rural markets – the exploitation of the rural market to the fullest extent has not taken place.

Communication: With the given level of literacy and awareness of rural population, communication constitutes a major hurdle in exploiting rural markets. Various factors like language, religion, superstitions, rigidity etc make communication in rural markets more difficult.

Right to Decision: In most rural families, it is the head of the family who decides what to buy and when to buy. Consequently his purchase decisions are influenced by his own personality traits, rather than the aptitude and perception of the actual consumers of these goods.

Pricing of the Product: Price factor is more crucial in rural areas than in urban markets. The consumer must feel satisfied and benefited after paying the price for a particular product.

Role Of Media…

The past two decades have seen a dramatic expansion of exposure to mass media in rural areas. Since these are, almost, by definition urban media at present is an overwhelmingly urban portrayal of life and values, their impact on attitudes and behavior has been profound. Radio is the medium with the widest coverage. Studies have recently shown high levels of exposure to radio broadcasting both within urban and rural areas, whether or not listeners actually own a set. Many people listen to other people's radios or hear them in public places. Surveys indicate that in rural areas more than a one third of the married women of reproductive age have listened to a radio within the last week. Television, video and films expose viewers to a common window on styles of life and behaviour, an impact increased by the supranational reach of the media. Television is extremely popular where it is available. Television increasingly exposes viewers to a wide range of national, regional and international viewpoints. Rural exposure to television has been lower by far than radio. The mass media brings change wherever they go; but change does not have to be random. Successful media campaigns have changed attitudes and behaviour in a variety of areas, from basic literacy to health care and family planning. But Advertising to rural consumers continues to be a hit and miss affair. At best, it is an exercise where communicators grapple with issues of language, regional and religious affiliations and local sensitivities. Most often finding the right mix that will have a pan-Indian rural appeal is the greatest challenge for advertisers. But more often than not, marketers throw in the towel going in for simplistic solutions: such as going in for a mere transliteration of advertising copy. The result: advertising that is rooted in urban sensitivities and do not touch the hearts and minds of the rural consumer.

Various other reasons making the mass media ineffective are: - 1. The Indian society is a complex social system with different castes, classes, creeds and tribes. The high rate of illiteracy added to the inadequacy of mass media impedes reach almost to 80% of India's population who reside in village.

2. Mass media reaches only 57% of the rural population. Generating awareness, then, means utilizing targeted, unconventional media including ambient media.

3. Mass media is too glamorous, interpersonal and unreliable in contrast with the familiar performance of traditional artist whom the villager could not only see and hear, but even touch.

4. The communication and the design of marketing mix needs to be different,...

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