Rural Markets- WHT WHY

8/8/2019 Rural Markets- WHT WHY

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Rural Consumer insightsRural India buys :-

* Products more often (mostly weekly) ;* Buys small packs, low unit price more important than economy ;

* In rural India, brands rarely fight with each other; they just have to be present at theright place ;* Many brands are building strong rural base without much advertising support, likeShampoos, detergent etc.* Fewer brand choices in rural areas; number of FMCG brands in rural areas is half that ofurban.* Buys value for money, not cheap products

Exposure of Rural Markets in India.

* 630 million people ;

* According to a study by the Che

nnai-based Francis Kanoi Marketing PlanningServices, estimated annual size of market is -

FMCG Rs. 65,000 CroreConsumer Durables Rs. 5000 CroreAgri Inputs (e.g., Tractors) Rs. 45,000 Crore2/4 Wheelers Rs. 8,000 croreTotal Rs. 1,23,000 Crore

* In 2001-02, LIC sold 55% of its policies in rural India.

* Of the two million BSNL mobile connections, 50% are in small towns / villages.

* Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT).

* 42 million rural households are availing banking services in comparison to 27 millionurban households.

* Investment in formal savings instruments: 6.6 millions households in rural and 6.7 millionin urbanIndia.Importance of Rural Market

* Large Population: Approximately 75% ofIndia's population resides in around 6,38,365

villages ofIn

dia spread over 32 lakh square kilometer. 41% ofIn

dia's middle class residesin rural areas. ;

* Higher Purchasing Capacity: Purchasing power of rural people is on rise;

* Market Growth: Market is growing at a rate of 3-4% per annum.

Major Initiatives of Some Market Players


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* Hariyali Kisaan Bazaar , was set up by DCM Shriram Consolidated Ltd. to facilitatesale of agri-inputs such as fertilizers, pesticides, farming equipment, seeds, animal feed,etc.

* ITC 's internet-enabled rural interface to help sale of agri outputs, e-Choupal, ispresently operational in 6 states and there are 5200 kiosks.

* TRIVENI KUSHALI Bazaar, a rural agri-inputs store run by Thriven EngineeringIndustries Ltd. in the sugarcane belt of U.P., is also used to sell cement and FMCGproducts.

* HUL's Project SHAKTHI - Through the state governments and NGOs involved in micro-finance, women entrepreneurs in villages are identified to act as local distribution and salespoint for HUL products.Challenges Faced by Marketers in Rural Market

* Low literacy rate.

* Traditional outlook of rural consumers due to which they are resistant to change. Theirbuying decision is low and delayed.

* Demand in rural market depends on the agricultural situation as it is the main source ofincome. Again agriculture depends on monsoon. So buying capacity of rural consumersvaries and it becomes difficult to predict demand.

* Lack of infrastructure facilities.

* Retailers pushing imitation or fake products in place of branded ones for bettercommission.

* Communication problems.

* Problems related to distribution and channel management

The journey of markets to the rural markets has indeed been one of surmounting onehurdle after another; these include the 4 As - Availability, Affordability, Acceptance &Awareness - adopting themselves to the rural atmosphere marketers. So, in the context ofgrowth aspects of the Rural markets and their adoption and application by major MNCs andIndian companies, I want to take this Project as my Research Project so that I could go in tothe in-depth study of the rural markets- their future scope, challenges etc. in the context ofIndia

'Rural markets are future battlegrounds'

Objectives of the study"Any task without sound objectives is like Tree without roots". Similarly in case ofany research study undertaken, initially the objectives of the same are determined andaccordingly the further steps are taken on.


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* In 2001-02, LIC sold 55 % of its policies in rural India.* Of two million BSNL mobile connections, 50% in small towns/villages.* Of the six lakh villages, 5.22 lakh have a Village Public Telephone (VPT).* 41 million Kisan Credit Cards issued (against 22 million credit-plus-debit cards in

urban) withcumulative credit of Rs. 977 billion resulting in tremendous liquidity.

* Of 20 million Rediffmail signups, 60 % are from small towns. 50% transactions fromthese towns on

Rediff online shopping site.* 42 million rural HHs availing banking services in comparison to 27 million urban HHs.* Investment in formal savings instruments: 6.6 million HHs in rural and 6.7 million in

urban

* Dr. Venkatesh Tamlurkar, Assessing the Marketing for Rural India ;indianmba.com/facultycolumn/articles : In many villages, one can see today the alternateuse of the products other than for their actual purpose. People in the state of Bihar feed thecattle with Horlicks as a health drink to fatten them! Similarly, people in Punjab use washingmachine not for washing clothes but to make frothy lassi in huge quantities! Animals arerubbed with Iodex on their skins to relieve them from muscular pains after a day's hard

work. Paints meant for houses are used on the horns of cattle for easy identification andtheft prevention.

* Pankaj Dhingra, Rural Paradise for Corporates - Get, Set and Go;indianmba.com/facultycolumn/articles :This article published some facts about RuralMarkets validating the notion of its potentiality:-

* Low Penetration rates in rural markets facilitates opportunitiesDurables Urban Rural Total

(%of rural House hold )Colour TV 30.4 4.8 12.1

Refrigerator 33.5 3.5 12FMCGs Urban Rural Total

(%of rural House hold )Shampoo 66.3 35.2 44.2

Toothpaste 82.2 44.9 55.6* According to a study by the Chennai-based Francis Kanoi Marketing PlanningServices, estimated annual size of market is -

FMCG Rs. 65,000 CroreConsumer Durables Rs. 5000 CroreAgri Inputs (e.g., Tractors) Rs. 45,000 Crore2/4 Wheelers Rs. 8,000 croreTotal Rs. 1,23,000 Crore

References

* Jha Neeraj, Gung-ho on rural marketing;The Financial Express, June 19, 2000.


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* The Marketing Mastermind Case study HLL- Rural Marketing Initiatives ICFAI Press,PP. 62, Feb 2003.* Bargal Hitendra, Dr. Pithadia Vijay, Promotion of Brand in Rural Market of India;indianmba.com/facultycolumn/articles.* Ramanathan V, Sudhamathi S, Brand Building Exercises Adopted by Life InsuranceCompanies in Indian Rural Markets; Icfai University Journal of Rural Management.

* Khan N. A. , Building Competitiveness in Small-Scale and Rural Industries in India; IcfaiUniversity Journal of Rural Management.* Dr. N. Rajendhiran, Rural Marketing - A Critical Review; Icfai University Journal ofRural Management.* Ariff Peer Mohamed, Babu Dhinesh, Emerging Trends in Rural Marketing ;indianmba.com/facultycolumn/articles.* Dr. Naik C.N. Krishna, Going Rural: The New Marketing Mantra; -indianmba.com/facultycolumn/articles.* Dr. Venkatesh Tamlurkar, Assessing the Marketing for Rural India ;indianmba.com/facultycolumn/articles.* Pankaj Dhingra, Rural Paradise for Corporates - Get, Set and Go;indianmba.com/facultycolumn/articles.* Soumen Banerjee, Rural Marketing: Challenges in Distribution & Channel Management;

coolavenues.com/knowledgezone.* The Economic Times* www.hill.com* www.rediff.com/money/2005/jun/02inter.htm

Ms. Charu BhartiLecturer

Amity School of Business, Amity UniversityNoida

Mr. Ashu JainLecturer

Amity International Business School, Amity UniversityNoida

Rural Markets- WHT WHY

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