Rural Marketing Charecters Challenges And Strategies Marketing Essay

Rural Marketing Charecters Challenges And Strategies Marketing Essay Rural markets have acquired significance in India as the overall growth of the economy has resulted in substantial increase in the purchasing power of rural communities. As urban markets are getting saturated and competitive, companies focus themselves in capturing the vast rural market. Go Rural is the slogan of marketing gurus after analyzing the socio-economic changes in villages. Rural markets accounts for 54% of FMCG and 60% of durable goods. Rural consumption is getting high as the technology is advancing everywhere and also buying pattern and demand of the rural consumers have changed from basic low-priced product to luxurious ones due to their increased income. Dynamics of rural markets differs from other market types and similarly its strategies also differ from the marketing strategies aimed at the urban consumers. A firm seeking the share of this rural market has to work for it as the market includes variety of problems such as physical distance, communication risks due to illiteracy, differed tastes and attitudes of rural consumers, risks in setting suitable pricing and distribution strategy etc. considering the environment in which the rural market operates and other related problems, it is possible to evolve effective strategies for rural marketing. Thus future is very promising for those who can understand the dynamics of rural markets. Character of rural market: 1. The households belonging to the middle-income and above categories that constitute the bulk of the consuming class had been increasingly steadily over the years. 2. The rural income is seasonal in nature and to a great extent influenced by non-controllable factors such as draughts and floods, crop failures due to pests, and similar factors 3. The rural market in India is vast and scattered and offers various opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby the maximum number of consumers. 4. The steps taken by the government of India to initiate proper irrigation, infrastructural developments, prevention of floods, grants for fertilizers, and various schemes to cut down the poverty line have improved the conditions of rural masses resulting in increased rural consumption. 5. During the last decade the rural consumers were in need for low end products which would meet their basic demands and necessities. But of lately due to change in technology and rather advancement in technology, the demand for people have also changed and the buying pattern which initially comprised of basic products have now shifted to luxurious products. 6. Media reach is a strong reason for the penetration of goods like cosmetics, mobile phones, etc., which are only used by the urban people. Increasing awareness and knowledge on different products and brands accelerate the demand. 7. Sales will be higher in rural areas during harvesting periods as the income will be higher during that period. Characteristics of rural consumers People in rural areas have poor job opportunities than urban. The rural consumer is very conscious about getting value for money. He understands symbols and colors better, and looks for endorsement by local leaders or icons. He doesnt like to pay extra for frills he cannot use. He has a very high involvement in any product purchased especially when he decides to buy high-end products, which cost a few hundreds or thousands of rupees. The rural market of India is a geographically scattered market. Rural consumers continue to be marked by low purchasing power. The rural consumers are marked by a conservative and tradition-bound lifestyle. Rural consumers buy small packs, as they are perceived as value for money. There is brand stickiness, where a consumer buys a brand out of habit and not really by choice. The rural consumers of India are a tradition bound community; religion, culture and even superstition strongly influence their consumption habits. Challenges There are several difficulties confronting the effort to fully explore rural markets. The concept of rural markets in India is still in evolving shape, and the sector poses a variety of challenges. Unlike urban markets, rural markets are difficult to predict and possess special characteristics 1. Difficulty in Payment- collection: The majority of rural population is still unbanked. Non cash collections are not possible and even cash collections are also difficult as technical advancements in banking sector has not yet reached in rural areas. 2. Understanding the Rural Consumer: Unlike urban consumers, rural consumers taste and preferences are difficult to understand as their choices were influenced by many factors. 3. Poor Infrastructure: Lack of buildings, electricity, water supply etc affects the basic business functions. 4. Physical Distribution: Poor road connectivity is often a big challenge for the rural marketers to transport their products or services to the rural consumers. Only 40% of the villages in India have proper road connections. 5. Shortage of retail outlets: Non-availability of adequate retail outlets is a major problems faced by the marketers. 6. Illiteracy: Rural folks do not understand clever, gimmicky, quick (fast-paced), suggestive and hi-tech ad films. And also it is very difficult to make the rural consumers to understand the promotion campaigns and its theme and also the usage of a product. 7. Inadequate storage facilities and warehousing leads to inadequate stocking of products. 8. Highly credit driven market and low investment capacity of retailers. A rural consumer generally poses the habit purchasing goods for credit due to their low income. But financially unsound retailers cant give credit. 9. Dispersed or scattered rural population: it is very expensive to conduct market promotion campaigns and to meet other expenditures over scattered market. 10. Large number of intermediaries leading to higher costs. Due to physical distance, a producer needs the help of so many intermediaries in selling his product to the rural consumers. High intermediation increases price. Strategies Marketers need to understand the psyche of the rural consumers and then act accordingly. Rural marketing involves more intensive personal selling efforts compared to urban marketing. Firms should refrain from designing goods for the urban markets and subsequently pushing them in the rural areas. To effectively tap the rural market, a brand must associate it with the same things the rural folks do. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriad rituals, celebrations, festivals, melas, and other activities where they assemble. Considering the environment in which the rural market operates and other related problems, it is possible to evolve effective strategies for rural marketing. The strategies discussed here though not universally applicable depend upon product characteristics, the targeted segment of the rural market, the choice of the rural area and its economic condition. A. Product strategies Meaningful product strategies for rural market and rural consumers are discussed here. 1. Small unit and low priced packing: Larger pack sizes are out of reach for rural consumers because of their higher price and usage habits. This method has been tested by other products like shampoos, biscuits, pickles, Vicks five gram tins, etc. the objective of giving smallpackagings is to keep the price low so that the entire rural community can try. This may not be possible in all types of products except some products such as shampoo, soaps and other cosmetics etc. 2. Designing new innovative and attractive products: A close observation of rural household items indicates the importance of redesigning or modifying the products. The manufacturing and marketing men can think in terms of new product designs specially meant for rural areas keeping their lifestyles in view. The new products should be designed in such a way that it should suit the lifestyle, needs and anxiety of the rural consumer. 3. Designing strong and sturdy products: Sturdiness of a product either in terms of weight or appearance is an important fact for rural consumers. Generally a rural consumer handles every product roughly. Thus the product meant for rural areas should be sturdy enough to stand rough handling and storage. People in rural areas like bright flashy colors such as red, blue, green etc., and feel that products with such colors are sturdy but they are more concerned with the utility of the item also. 4. Creating a good brand name The rural consumers are more concerned with the brand name of the product than its utility. The brand name awareness in the rural areas is fairly high. A brand name and logo are very essential for rural consumers for it can be easily remembered and identified. Because rural consumers often used to stick towards a particular product by considering its brand name. B. Pricing strategies Pricing strategies are very much linked to product strategies. Some of these strategies are mentioned here. 1. Low cost/cheap products: This is a common strategy being adopted widely by many manufacturing and marketing men. Rural consumers wont like to have high-priced commodities due to their low income. So Price can be kept low by small unit packing resulting in higher sales. 2. Avoid sophisticated packing: Simple package can be adopted which can bring down the cost as it is presently being done in the case of biscuits. Some innovation in packing technology is very necessary for rural markets. Sophisticated packing can be avoided as it bears extra cost which may losses the number of consumers due to high price. 3. Refill packs/reusable packaging: The packaging material used should preferably lend itself for reuse in rural areas. An ideal example in this direction can be the packing of fertilizers. Now companies have started packing fertilizers in LDPE or HDPE sacks, which are not only tamper proof but also reusable. But it would be applicable only in case certain products. 4. Application of value engineering: This is a technique which can be tried to evolve cheaper products by substituting the costly raw material with the cheaper one, without sacrificing the quality or functional efficiency of the product, for example in food industry, Soya protein is being used instead of milk protein. Milk protein is expensive while Soya protein is cheaper but the nutrition value is same. This technique yields itself for application in many engineering or product designed areas so that the price can be kept at an affordable level. These areas have to be explored by manufacturing and marketing the pricing strategy for rural market will depend upon the scope for reducing the price of the product to suit the rural incomes and at the same time not compromising with the utility and sturdiness of the product. 5. provision of free frills or products along with the selling product will make an impression among the rural buyers that the price they are paying for the product is not high, as they are getting extra free products or services. c. Distribution strategies Rural India is widely populated and so it is obvious that the distribution costs are high. Here, one needs to deploy innovative approaches in order to bring down the costs. Most manufacturers and marketing men do have a distribution arrangement for village with a population of at least 5000 people. While it is essential to formulate specific strategies for distribution in rural areas, the characteristics of the product, its shelf life and other factors have to be kept in mind. The distribution strategies that are specifically designed for rural areas are through co-operative societies, public distribution system, multi-purpose distribution centers, etc.some other distribution strategies that can be adopted in rural marketing were: 1. Using Delivery vans to deliver products to nook and corner of villages. 2. Localized way of distributions such as melas, street outlets etc: To succeed in Indian rural market the producers or marketers have to reach the nook and the corner of the country. They have to reach the local Paan wala, Local Baniya only then they can succeed. MNC shoe giants, Adidas, Reebok, and Nike started with exclusive stores but soon they realized that they do not enjoy much Brand Equity in India, and to capture the market share in India they later preferred Local market shoe sellers. 3. Conduction of special sales programmes through temporary street stalls or showrooms in rural areas: This is one of the strategies widely adopted by automobile marketers. This strategy is suitable for high end products. 4. Direct distributions by opening outlets in villages avoiding intermediaries that will also reduce price 5. By offering certain discounts, the local rural distributors can be made to brainwash the consumers about the new product as rural consumers believes the word of the familiar person in purchasing a product. Thus risk involved in sales and distribution of the new product can be somewhat reduced. D. Promotion strategies Mass media is a powerful medium of communication. It could be television, cinema, print media, and radio and so on. The other means of mass media available are hoardings/wall paintings, shanties/hats/melas, non-price competition, special campaigns etc. Besides these, other mass media like hand bills and booklets, posters, stickers, banners of the schemes etc. Following are some of the promotion strategies that can be applied in order to promote a new product in the rural market: 1: advertising with local ambassadors is a right choice and also advertisements can be made colorfully as rural people like that. 2: providing the new product as a free product along with some other products that were already going in the market. So that, the consumers will be aware of the new product. 3: making a tie up with the ongoing market retailers in order to enhance proper distribution and to expand the business in the initial promotion stage. After gaining some goodwill and market, the producer can either continue with the ongoing retail distribution or it can open its own retail shops. 4: In the promotional stage, the goods and services can be given at low prices that would attract the rural consumers as they often prefer low-priced commodities with higher utility. In addition to all these strategies, there are some other strategies that a marketer should follow or implement in order to promote and succeed in rural market. They are as follows; BY TARGET CHANGING PERCEPTION If one go to villages they will see that villagers using Toothpaste, even when They can use Neem or Babool sticks or Gudakhu, villagers are using soaps like Nirma rose, Breeze, Cinthol etc. even when they can use locally manufactured very low priced soaps. Villagers are constantly looking forward for new branded products. What can one infer from these incidents, is the paradigm changing and customer no longer price sensitive. Indian customer was never price sensitive, but they want value for money. They are ready to pay premium for the product if the product is offering some extra utility for the premium. Thus a marketer has to design his marketing trend according to the changing perception of the rural consumers. BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. They do not see any value in frills associated with the products. They aim for the basic functionality. However, if the sellers provide frills free of cost they are happy with that. They are happy with such a high technology that can fulfill their need. Motorola has launched, seven models of Cellular Phones of high technology but none of the rural consumers preferred it as they dont even know or wants or cannot use such advanced technologies in that models. On the other hand, Nokia has launched a simple product 1100, which has captured the wide rural market. BY DEVELOPING RURAL-SPECIFIC PRODUCTS Many companies are developing rural-specic products. Keeping into consideration the requirements and necessities of the rural consumers, products can be ultimately designed which aptly suits the rural necessities.for example; some bike manufacturers are designing their product very toughly which will suit the poor road facilities of rural India. (Hero Honda splendor) PAINTINGS A picture is worth thousand words. The message is simple and clean. Rural people like the sight of bright colours. COKE, PEPSI and TATA traders advertise their products through paintings.thus advertising through paintings can be made. Conclusion: Indian rural marketing has always been complex to forecast and consist of special uniqueness. However many companies were successful in entering the rural markets. They proved that with proper understanding of the market and innovative marketing ideas, it is possible to bag the rural markets. It is very difficult for the companies to overlook the opportunities they could from rural markets. As two-thirds of the Indian population live in rural areas, the market is vast than expected. For the companies to be successful in rural markets, they have to overcome certain challenges such as pricing and distribution. Thus by following the above stated innovative strategies, companies can capture markets and withhold in rural areas. AUTHOR: Pradeep kumar.B, SIIMS, Pollachi. EMAIL ID:[emailprotected] PHONE NUMBER: 9787077523