India?s vast rural market offers a huge potential for a marketer facing stiff competition in the urban markets. The rural market environment is very different from the familiar surroundings of the urban market. Rural consumers have customs and behaviors that the marketers may find difficult to contend with.
The opportunities in the rural market are demonstrated by comparing consumption levels in urban and rural market for different product categories. Their volumes and growth show the importance of the market.uhderstanding demographic profile of consumers and their response to brand offering is a useful approach to analyses the rural market.
The use of an existing network of channels in the rural market is the key to connecting with the rural heartland. Haats and melas that are unique to rural markets, supplement the retailer route to the rural market. The interactions between consumers and these unique institutions provide information for use in marketing decision.
CORPORATES INTEREST IN RURAL MARKETING
When rural customers discover the new and exiting choice f brands available in urban markets, a demand for these brands is created in rural areas. When Titan found rural consumers purchasing their Sonata brand of quartz watches, they formulated a marketing strategy tailored to the requirement of the large rural market.
GROWING IMPORTANCE OF RURAL MARKETS
? Hindustan Motors (HM) launched a utility vehicle the RTV (Rural Transport Vehicle), aimed at the rural market. One way of meeting the intense competition in the passenger car segment by HM is through increased efforts in rural markets. It has over40% of this rural market, expoiting the low prices, reliability and time tested rugged aspect of the Ambassador brand.
? Titan industries the country?s largest watch maker is now set to aggressively woo the rural consumer. Titan intends to make in roads into the Indian hinterland with Sonata. The company?s watches are available in towns with a population of 20,000. Rural consumers who come to larger towns have access to Titan products.
REASONS FOR INTEREST
? Untapped Potential:-
Rural markets offer a great potential for marketing branded goods and services for two reasons. First one is the large number of consumers. A pointer to this is the larger volume of sales of certain products in rural areas as compared to the sales of the same products in urban areas. The second one is large untapped market which is yet to be discovered.
? Market size and penetration:-
The estimated size of India?s rural
Market stated as the percentage of world population is 12.2 percentage. This means 12.2 percentage of the world?s consumers live in rural India. In numbers this works out to about 120 million households. In India the rural households form about 72 percentages of the total households.
? Increasing income and purchasing power:-
The agricultural development programmes of the government have helped to increase income in the agriculture sector. This in turn has created greater purchasing power in rural markets. The road network has facilitates a systemized product distribution system to village.
CHANNEL VARIANTS IN RURAL MARKET
The distribution in rural markets is different from urban markets for multiple reasons. One of the main reason is that the cost of reaching the outlets is higher for rural markets because of the geographical spread. There is also a difference due to the type of channel available to the marketer. A distinct feature of the rural market is the presence of haats and rural fairs.
Haats are periodic markets. Periodic markets mean that people assemble at a particular place at least once a week in order to buy and sell products. Haats operate in a weekly cycle. They may vary in the intensity of their transactions depending upon the season but they seem to have a fairly stable periodicity. They serve the village in which it is located and also the surrounding village. Each haat caters to the needs of a minimum of 10 to maximum of 50 villages from where an average of 4000 persons come to buy a range of daily necessity and services
Consumers and traders who form a major part so the population attending these markets do not necessarily attach much importance to the population of the village in which the market is held. In their view. The importance of a market is based on the number of stalls it haates specially the number of stalls selling urban consumer goods.
COMPETITION IN RURAL MARKET
Competition in rural markets is varied in nature and a marketer faces competition not only from other brands but also from substitutes, especially in places where the product is new to the consumer. Such situations are quite common in rural markets. Competition for existing brands can be from other brands, from new player?s small unorganized sectors, duplicates and imitation. The task for a new player entering in the market is difficult given the advantage that entrenched brands have in rural markets.
Entry strategy for a new player
The entry of a new brand in the rural market is a difficult proposition. This is because in rural markets the pioneer creates a lasting impression and loyalty to such brands is higher. In the case of the organization entering in the rural market for the first time the sheer size of the market in geographic terms poses a formidable challenge in accessing retailers. Entry strategy in such situation includes,
? Efforts to create shelf space for the product
? To establish a symbiotic relationship with an existing marketer.
Consumer pull creates a space for the brand on the retail shelf that is difficult to replace. In such a situation competitive efforts that rely on positioning alone are unlikely to create a sufficient impact.
Rural markets are for marketers with perseverance and creativity. The market is extremely attractive with its vast potential but also provides challenges. It is a classic case of risk return situation. It is a high risk area but with the promise of a large customer following as the prize for those who succeed. The key to reducing the risk is to understand the market, the consumer need and behaviors.
A marketer need to understand that rural consumers are not a homogeneous lot. The rural market is not synonymous with the farmer. The consumer groups here differs by occupation, income, social and cultural grouping. The rural marketer will find it useful to identify consumer groups who require products purchased in the urban market.
Adaptation to consumer needs of the rural market is reflected in products offered and the message used. Understanding and communication in the language that the rural consumer comprehends is a challenge the market has to face. The communication strategy that allows flexibility and autonomy to meet the local situation is important. Consumer purchase behavior is also reflected in distribution decisions. The periodic markets are an imortantsocial institution that marketers can user to supplement reaching the rural consumer.