RURAL MARKETING
ABSTRACT
70% of the Indian population lives in rural areas. This segment, commonly referred to as the 'bottom of the pyramid', presents a huge opportunity for companies. Companies in India, understands the importance of rural marketing. “The future lies with those companies who see the poor as their customer”-C.K.Prahalad. On account of green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has emerged. Rural markets are attractive as in 2001-02; LIC sold 55% of its policies in rural India. Of two million BSNL mobile connections, 50% are in small towns / villages. Opportunities present in rural marketing are increasing in a rapid manner in India. Now villages have been connected by road. More than
90% villages are electrified. Rural density has gone up by 300% with increasing number of “pucca” houses in India. When we consider the scenario of India, , there is a picture that comes
out, huge market for the developed products as well as the labor support. This has led to the change in the mindset of the marketers to move to these parts of the world .The marketers are looking for extending their product categories to an unexplored market i.e. the rural market. Among the current steps taken by the corporate world in india is by Idea Telecom Company which has used Abhishek Bacchan in one of the advertisements shown as a “sarpanch” just to have a positive appeal among the rural customers. Rural Markets constitute an important segment of not only in india but also in overall economy, for example, in the USA out of about 3000 countries, around 2000 counties are rural that is, non-urbanized, with population of 55 million.
Introduction to rural marketing
“India having6,38,677 villages,597 districts,700millon people, myriad of language, many traditions and rich culture .A vibrant land with a long history. Rural India people are much for
their warmth as their diversity. Welcome to the land of mysticism. The Real Bharat”
EXPLORE THE RURAL MARKET, DO NOT EXPLOITE THEM
“The future lies with those companies who see the poor as their customers.” – C. K. Prahalad. India is a country of diverse cultures, languages and rituals. In these circumstances it has become
a challenge for manufacturers to differentiate their offerings according to the Indian market. With about 70% of Indian population residing in rural areas the need of the hour for the
marketers is penetrating this market. Driven by green revolution, rural population’s purchasing power has grown tremendously over the years. Accordingly rural demand for industrial and
urban related products is also growing. In this context, a special marketing strategy, namely, rural marketing has emerged. But often, rural marketing is confused with agricultural marketing.
While latter denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers. The reasons why companies are going rural The reasons why companies are going rural are manifold. Marketers and manufactures are increasingly aware of the burgeoning purchasing power, vast size and demand base of once neglected Indian hinterland. Efforts are now on to understand the attitude if rural consumer, and to walk their walk and talk their talk. The other reason is the infrastructural development that is been taken care in the rural areas such as Of the 6.0 lakh villages, 5.22 lakh have a Village Public Telephone (VPT). 50 years only, 40% villages have been connected by road, in next 10 years another 30% would be connected. More than 90% villages are electrified, though only 44% rural homes have electric connections. Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to 23%). Rural literacy level improved from 36% to 59%. And finally most important low penetration rates in rural areas, so there are many marketing opportunities. In the present scenario companies operating in India will have only two options: either to go global or go rural. As due to the competition in the urban market, the market is more than or as saturated as most of the capacity of the purchasers has been targeted by the marketers. So the marketers are looking for extending their product categories to an unexplored market i.e. the rural market. We can think of HLL (now, HUL) initiatives in the rural India. One of such project is the Project Shakti, which is not only helping their company attain some revenue but also helping the poor women of the village to attain some money which is surely going to increase their purchasing power. Also this will increase their brand loyalty as well as recognition in that area. We can think of the ITC E-Chaupal, which is helping the poor farmers get all the information about the weather as well as the market price of the food grains they are producing. These activities are also helping the companies increase their brand value shown by the success of HUL and ITC initiatives.
Industry’s role in building market linkages To make an effective market linkage, industries have to play as an engine of
market, which can generate a brand image of the rural products. This initiative of industries will also strengthen the backward and forward linkages of the rural market, besides, accelerating the
innovations of the rural products. Definitely, this strategy will also give a remarkable dividend to the industries & profit making companies. industries can develop an ecosystem of Self Help
Groups (SHGs) by involving the local communities through village level empowerment. It is nothing less than the next phase in the democratization of commerce. Under this paradigm,
industries can create a network with viable marketing channels covering all the linkages from villages to the global level. This architecture provides the right value of procurement through the
village procurement centers and rural entrepreneurs can sell their products faster with better price realization. This model is also capable of generating a consumer business and an output business
in a win-win scenario, where rural producers can get a wide marketing horizon and the industries shall get a new, lower cost ‘sales force’. ITC e Choupal is the best example in this context.
Through creative use of Information Technology, ITC eChoupal has been creating sustainable stakeholder value by reorganizing the agri-commodity supply chains simultaneously improving the competitiveness of small farmer agriculture and enhancing rural prosperity.
Scope & opportunities
The basic scope is the mutual benefits of the rural entrepreneurs and industries. These models of marketing linkages demonstrate a large corporation which can play a major role in reorganizing
markets and increasing the efficiency of a rural product generation system. Moreover, the prime scope of this model is the creation of opportunities for the rural entrepreneurs for product differentiation and innovation by offering them choices. Because of this sustainable market linkages, rural producers can participate in the benefits of globalization and will also develop their capacity to maintain global quality standard. And subsequently, they become part of the
firms’ core businesses. The involvement of the private /industry sector at the rural product and market development can also provide opportunities for the development of new services and
values to the customers, which will find application in the developed markets. Through industry’s intervention will also empower the rural mass (producers, farmers & entrepreneurs) to cope with socio-economic problems in the rural society and will ensure economic self –reliance.
Present position
In recent years, rural markets have acquired significance in countries like India. As the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities . On account of the green revolution in India, the rural areas are consuming a large quantity of industrial and urban manufactured products. When we consider the scenario of India,
there is a picture that comes out,huge market for the developed products as well as the labor support. This has led to the change in the mindset of the marketers to move to these parts of the
world. As there is intense competition in the urban market, the market is more saturated as maximum capacity of the purchasers has been targeted by the marketers. So the marketers are
looking for extending their product categories to an unexplored market i.e. the rural market. Many of the corporate have taken initiatives in acquiring their name in the rural market. Indian
companies like Godrej Consumer Products Ltd (GCPL), COCA-COLA India, ITC, Chennai based CavinKare Products, HLL(Hindustan level limited), HYUNDAI, The Rural Tourism
Network Enterprise (RTNE), Amul “the taste of India”, BSNL mobile, Health Insurance in Rural India, GlaxoSmithKline, PepsiCo, IDEA, etc.
An Invitation to FMCG in Indian rural market
The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian economy. This Sector touches every aspect of human life. The FMCG producers now realize that there is a lot of
opportunity for them to enter into the rural market. Globally, the FMCG sector has been successful in selling products to the lower and middle income groups, and the same is true in India. Over 70% of sales are made to middle class households today and over 50% is in rural India. MART, the specialist rural marketing and rural development consultancy, has found that 53per cent of FMCG sales and 59 per cent of consumer durable sales lie in the rural areas.
*Of two million BSNL mobile connections, 50 per cent went to small towns and villages.
* Of the 20 million Rediffmail sign-ups, 60% are from small towns. 50% of transactions from these towns are on Rediff online shopping site.
According to a study by Chennai-based Francis Kanoi Marketing Planning Services Pvt Ltd, the rural market for FMCG is worth Rs.65,000 crore, for durables Rs 5000 crore, for tractors and
agri-inputs Rs.45,000 crore and two- and four-wheelers, Rs.8000 crore. In total, a whopping Rs.123,000 crore.
Impulse to go Rural
There are somereasons that has urged the FMCG companies to enter the rural market they are been discussed below:
1. Large Population
The rural Indian population is large and its growth rate is also high. Over 70% India’s one billion plus population lives in around 627,000 villages in rural areas. This simply shows the great
Potentiality rural India has to bring the much needed volumes and help the FMCG companies to bank upon the volume driven growth.
Area Household Population Rural 71.4 74.6 Urban 28.6 25.4 All-India 100 100 Percentage distribution of households and income.
2. Rising Rural Prosperity
India is now seeing a dramatic shift towards prosperity in rural households. As per the National Council for Applied Economic Research (NCAER) study, there are as many ‘middle Income and
above’ households in the rural areas as there are in the urban areas.
Distribution of people income-wise According to NCAER projections, by 2006 – 07, the lowest income class will shrink by more than 60%. The higher income classes are likely to double by 2006 – 07. This apparently is the result of development work, which happened under the five years plans and other special
programme such as land reforms, rural electrification rural communication, and rural credit facilities, etc.
3. Growth in Market
The purchasing power in rural India is on steady rise and it has resulted in the growth of the rural market. The market has been growing at 3-4% per annum adding more than one million new
consumers every year and now accounts for close to 50% of volume consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than urban markets. In product categories like toilet soaps, talcum powder, cooking oil, vanaspati ghee, tea,
cigarettes and hair oil, the share of rural market is more than 505. The estimated annual business from rural markets was Rs1,23,000 crore, comprising Rs 65,000 crore of FMCG, Rs 5,000 crore of
durables, Rs45,000 crore of agricultural inputs including tractors and Rs 8,000 crore of twowheelers and four wheelers.
"We therefore have to look at the rural market very seriously for future expansion," said Mr. Nandakumar while inaugurating the Business Line Club and delivering the keynote address on
the topic, `
REFFERACNE- Brand Building beyond the Urban' under the auspices of the Departments of Business Management and Commerce of the Auxilium College
4. Effectiveness of Communication
An important tool to reach out to the rural audience is through effective communication.’ A rural Consumer is brand loyal and understands symbols better. The rural audience has matured
enough to understand the communication developed for the urban markets, especially with reference to FMCG products. Television has been a major effective communication system for rural mass and, as a result, companies should identify themselves with their advertisements. Advertisements touching the emotions of the rural folks, it is argued, could drive a quantum jump in sales.
5. IT Penetration in Rural India
Today there are over 15 million villagers in India who are aware of the Internet and over 300,000.Villagers have used it! Ten years back, history was created with Public Call Office phone booths, opening in every corner of the country. This experiment was an instant success and contributed to hundreds of thousands of jobs. Consumerism has altered rural buying behavior in recent years. Spending patterns of those who spend are now adapting to face the
technology bug. Today's rural children and youth will grow up in an environment where they have 'information access' to education opportunities, career counseling, job opportunities, government services, worldwide news information,” land records, mandi prices”, weather forecasts, bank loans, livelihood options. If television could change the language of brand communication in rural India, affordable Web connectivity through various types of
communication hubs will surely impact the currency of information exchange. As the electronic ethos and IT culture moves into rural India, the possibilities of change are becoming visible.
6. Impact of Globalization
The impact of globalization will be felt in rural India as much as in urban. But it will be slow. It will have its impact on target groups like farmers, youth and women. Farmers, today 'keep in
touch' with the latest information and maximize both ends. They keep their cell phones constantly connected to global markets. Surely, price movements and products' availability in the
international market place seem to drive their local business strategies. On youth its impact is on knowledge and information and while on women it still depends on the socio-economic aspect.
The marketers who understand the rural consumer and fine tune their strategy are sure to reap benefits in the coming years. In fact, the leadership in any product or service is linked to leadership in the rural India except for few lifestyle-based products, which depend on urban India mainly. Company experiences in Going Rural It becomes amply clear that rural India has to be the hot target in future for FMCG companies as it presents a plethora of opportunities, all waiting to be harnessed. Many of the FMCG
companies are already busy formulating their rural marketing strategy to tap the potential before competition catches up. All biggies in the industry be it HLL, Marico, Colgate-Palmolive or
Britannia, are showing deep interest in rural India. However not everything is all rosy and there exist some gray areas in the rural strategies also. To increase sales, growing the consumer
pie rather than sharing it, has emerged as one of the key strategies being used by FMCG majors. Offering more product variants, categories, price points, sizes and different marketing and distribution channels, all form part of a FMCG corporate strategy.
E-CHOUPAL
India is second most populous country in the world. Majority of its population lives in villages & earns their livelihood through farming. Agriculture is the backbone of Indian economy. It contributes around 26% of the total GDP. 65% of Indian population lives
mainly in its 600,000 villages.
E-choupal is a Hindi word which means “village meeting place”. Market is a meeting place where vendors and customers come together to do transactions. E-choupal is a virtualmarket place where farmers can transact directly with a processor and can
realize better price for their produce. e-choupal has the advantages of the market but spans very large varieties of vendors and customers. Geographical distances do not restrict participation in the e-choupal. The main attractiveness of e-choupal is that it can be
used for connecting large producers/small producers and small users/large users, thereby eliminating the need for hierarchy of brokers. Internet is used as a low transaction cost backbone for communication. The idea of creating and leveraging an electronic
market place came from thebrainstorming session done by senior executives of ITC-IBD. ITC believes in using abusiness model that does good to society and helps in improving the standard
of living ofstakeholders as well as add value to the shareholder wealth.
Initial goals were following:
Helps enhance farm productivity by
Latest information on district level weather forecasts for
short & medium terms
Best practices in farming (generic as well as specific)
Supply of quality inputs (seed, herbicide, fertilizer, pesticides etc) in the village itself
Helps improve price realization for farm produce by
Making available live data on markets viz. Location / Buyer wise prices offered
International market prices of relevant agri-commodities
Historical & Up-to-date information on supply & demand
Expert opinion on expected future price movements
Helps minimize transaction costs in marketing farm produce by
Buying output at the farmers’ doorstep
Through transparent pricing & weight management practices.
The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, who block critical market
information from passing to the farmers and use that information for getting a big margin for themselves.
Features of the E-Choupal Web Site –
Weather - Users can select their district of interest by clicking on the appropriate region of a map. Localized weather information is presented on regions within a 25 kilometer range. Typically 24- to 72-hour weather forecasts are available along with an advisory.
Pricing - The e-Choupal Web site displays both the ITC procurement rate and the local mandi rates. ITC’s next day rates are published every evening.
News- For the soyachoupal Web site, relevant news is presented from various sources. In addition to agriculture related news, this section also includes entertainment, sports, and local news.
Best Practices - Best farming practices are documented by crop. Here again, the information presented is action-based. For instance, this section not only highlights what kind of fertilizers to use but also how and when to use them.
Q & A - This feature enables two-way communication. Here a farmer can post any agriculture related question he needs answered.
THE E-CHOUPAL SYSTEM
E-Choupal Supply Chain -
Pricing
The previous day’s mandi closing price is used to determine the benchmark Fair Average Quality
(FAQ)price at the e-Choupal.
Inspection and Grading
To initiate a sale, the farmer brings a sample of his produce to the e-Choupal. The sanchalak inspects theproduce and based on his assessment of the quality makes appropriate deductions (if
any) to thebenchmark price and gives the farmer a conditional quote.
Weighing and Payment
The farmer takes the note from the sanchalak and proceeds with his crop to the nearest ITC procurementhub, ITC’s point for collection of produce and distribution of inputs sold into rural
areas.
Hub Logistics
After the inspection and weighing are complete, the farmer then collects his payment in full at thepayment counter. The farmer is also reimbursed for transporting his crop to the procurement
hub.
THE SOCIAL IMPACT OF E-CHOUPAL
A major impact of the e-Choupal system comes from bridging the information and service gap of ruralIndia. Agricultural research centers (such as the Indian Council for Agricultural Research),
universities,and other agencies in India have developed several practices and technologies to improve productivityand crop quality.
Some areas about which information and services are provided by the e-Choupal Web site and ecommerce system include:-
• Weather. This is a very popular section on the Web site because it provides localized weather information at the district level. Other public sources generally provide only aggregated statelevelweather information.
• Agricultural Best Practices. Scientific practices organized by crop type are available on theWebSite.
• Customized Quality Solutions. After sale of a crop is completed, ITC performs laboratory testingof the sample collected.
Pricing
Inspection & Grading
Weighing & Payment
Hub Logistics
• Intelligent Product Deployment. Inputs such as fertilizers and pesticides are not generic in their application. The optimal application is relative to the soil and crop.
• Children are using computers for schoolwork and games.
• Sanchalaks use the Internet to chat extensively among themselves about the status of operations and agriculture in their villages.
• Villagers access global resources to learn about agriculture in other parts of the world and are taking action to compete in the world outside, not merely in the local mandi.
• Youngsters in the village use computers to research the latest movies, cell-phone models, and cricket news.
CHALLENGES
The e-Choupal system faces multiple continuing challenges. The first is the possibility that radical shiftsin computing access could fundamentally alter community-based business models.
That is one of thereasons ITC seeks to build and control its own ICT infrastructure.
Main challenges are –
Underdeveloped people and underdeveloped markets
lack of proper physical communication facilities
Multi language and dialects
Small and marginal farmers
Traditional mind not to reach new ideas
Lack of ICT knowledge and skills
Financial cost
Infrastructure
Security.
The e-Choupal model shows that a large corporation can combine a social mission and an ambitious commercial venture;. e-Choupal has been most successful initiative to wire rural India and to involve the farmers in learning. E-choupal has been one of the best ICT application platforms that has been scaled replicated and sustained. This is due to the fact that it was specifically designed for that specific business. The success of e-Choupal has given new lessons
to the corporates in the India and abroad.
Initiatives taken by the corporate sector in India
*Godrej Consumer Products Ltd (GCPL) did something that it hadn't done before; it introduced smaller Pack sizes of some of its soaps and put them on the market for Rs 5.
*HLL has just launched a green variant of Lifebuoy soap, which, it hopes will be a winner in the rural Areas. In 2003, about 6000 such sub stockists were appointed to service 50,000villageswith a total population of 250 million.
* COCA-COLA India has embarked on a plan to cater to the rural population through its rural marketing initiative in Maharashtra.2010 Coca-Cola has begun selling a powder-based beverage called Vitingo at Rs 2.50 per sachet across villages in Orissa
* The Thums Up Chowfulla seeks to provide wholesome family entertainment. The Chowfulla is largely based on the concept of the folk dance - Lavni - and has already taken place in several
villages of Maharashtra. This promotional scheme entails one to buy a 600 ml bottle of any of the Coca-Cola products and get a free ticket to the Thums Up Chowfulla.
* The rural marketing initiatives of Hero Honda Motors Limited, a leading two wheeler company in India. In late 2007, Hero Honda started putting emphasis on the rural markets. In December
2007, the company started 'rural vertical'. In fiscal year 2008-09, the sales of Hero Honda from the rural market amounted to 40 percent of the total sales compared to 35 percent during the fiscal year 2007-08.
* ITC: Creative use of Information Technology, ITC eChoupal has been creating sustainable stakeholder value by reorganizing the agri-commodity supply chains thereby improving the competitiveness of small farmer agriculture and increase rural prosperity.
*Chennai-based CavinKare Products which makes hair dyes, organizes live demonstrations in remote areas where villagers get a free tinge of jet black or blonde or red – free of cost.
*Tobacco and foods major ITC is focusing on the rural segment to bring down its transaction costs.
*NOKIA:The Finnish telecom major is also looking at launching a limited number of sets at the Rs 500 price point.
*HYUNDAI: Hyundai Motors India has launched a new marketing initiative to tap the huge and largely ignored India rural car market. The marketing initiative title “Ghar Ghar Ki Pehchaan” aims at tapping the rural market for Hyundai’s compact offering, The Santro. Through this special rural scheme HMIL plans to touch base with at least 58% of Indian villages with a population of 500 or more.
*Incredible India: A private initiative to rural tourism:-
One can experience the rustic charms of rural India in a predominantly natural environment, where seasonality and local events blend with its culture, heritage and traditions. The Rural
Tourism Network Enterprise (RTNE) is here to make life simple, yet attractive. RTNE, a social enterprise, is offering tourist retreats to those who cannot afford to spend more than Rs 300 a
day.
*Amul “the taste of India” has also taken initiative in development of rural sector simultaneously inculcated new ways of money making in coordinating the prosperity of the poor or the rural
people. Established telecenters and enhance technology in village to purchase all milk the the farmers produce. Implementation of GIS(Geographic information system) which helps in tracking movement at milk collecting centers.
* Of two million BSNL mobile connections, 50% are in small towns / villages
*Rural markets are attractive as in 2001-02; LIC sold 55% of its policies in rural India.
*Health Insurance in Rural India:- Around 70 per cent of India’s population lives in villages. Of these, less than 2 per cent are insured. Though the rural health insurance market is huge, it has so
far remained untapped. Today significant portion of the rural population which is engaged in pure agriculture is slowly withdrawing from it.
* GlaxoSmithKline is rolling out Asha a milk food drink from Horlicks for rural consumers in Andhra Pradesh.
* Nestle is promoting Maggi noodles at Rs 4 and Maggi seasoning at Rs 2 for low-income group consumers beginning with Mumbai’s Dharavi slum.
* PepsiCo’s global chairman & CEO Indra Nooyi has announced that the company is working on a beverage or snack priced between Re 1 and Rs 5 for people ailing from malnutrition and
deficiencies.
* TATA TEA:- During the time of recession Tata Tea also took the course to rural India and reported increased sales. Tata Tea’s unique rural marketing initiative “Gaon Chalo” in UP drove
it’s all India share from 18 percent in January-March 2006 to 21.4 percent in January-March 2008.
* MARUTI SUZUKI:- The industry posted a growth rate of 11 per cent from April to October 2007 which fell to just 3 per cent in 2008. The sale of small cars (the entry-level segment) also
decreased in the face of the credit squeeze. To compensate for the loss, Maruti now planned to tap the rural market
*IDEA:-Sarpanch is one such opinion leader who can influence rural consumers purchase decision. Idea Telecom Company has used Abhishek Bacchan in one of the advertisements
shown as a sarpanch just to have a positive appeal among the rural customers.
VIRTUAL MARKETING
In the course of the last forty years, major social, political, demographic and technological developments have placed commercial organizations in the front line of change. Marketing
academics often point to the shifting character of marketing in a changing world and frequently emphasize the need for new conceptual and practical approaches in managing the
marketing process. How significant is Internet marketing to businesses? Today, the answer to this question varies
dramatically for different products and markets. For companies such as electronics equipment manufacturer Cisco (www.cisco.com), the answer is ‘very significant’ – Cisco now gains over
90% of its multi-billion dollar global revenue online. It also conducts many of its other business processes such as new product development and customer service online. However, the
picture is quite different for the manufacturers of high-involvement purchases such as cars or fast-moving consumer goods (FMCG) brands. The FMCG manufacturer finds that consumers are spending an increasing proportion of their time on the Internet and less time
using other media so the Internet has become an effective way of reaching its target markets.
The Internet can be used to increase the frequency and depth of interactions with the brand, particularly for brand loyalists who are the advocates of these brands. The Internet can be applied by companies as an integral part of the modern marketing
concept since:
It can be used to support the full range of organisational functions and processes that deliver products and services to customers and other key stakeholders.
It is a powerful communications medium that can act as a ‘corporate glue’ that integrates the different functional parts of the organisation.
It facilitates information management, which is now increasingly recognised as a critical marketing support tool to strategy formulation and implementation.
The future role of the Internet should form part of the vision of a company since its future impact will be significant to most businesses.
Without adequate information, organisations are at a disadvantage with respect to competitors and the external environment. Up-to-date, timely and accessible information about
the industry, markets, new technology, competitors and customers is a critical factor in an organisation’ s ability to plan and compete in an increasingly competitive marketplace.
These factors still provide a timely reminder of traps that should be avoided when embarking on Internet marketing.
1. Wrongly defining which business they are in.
2. Focusing on: products (many web sites are still product-centric rather than customer-centric); production;
technology (technology is only an enabler, not an objective);
selling (the culture on the Internet is based on customers seeking information to make informed buying decisions rather than strong exhortations to buy);
customer needs (the need for market orientation is a critical aspect of web site design and Internet marketing strategy); and
market opportunities (the Internet should not just be used as another channel, but new opportunities for adding value should be explored).
3. Unwillingness to innovate and ‘creatively destruct’ existing product/service lines.
4. Shortsightedness in terms of strategic thinking.
5. Giving marketing only ‘stepchild status’ , behind finance, production and technology.
4P’S IN VIRTUAL MARKETING
Product
The Web site is the prime online product and brand of the online organization. The customer should become aware, develop interest and be persuaded to search for the site/product before going on looking into the company’s detailed online offering.
Price
The majority of commercial sites function as price lists for the company’s physical product assortment. Besides that, the Web site is perceived by the online prospect and customer as a cost element (due to connectivity cost, transaction costs, time and opportunity cost).
Promotion
The Web site is the promotional medium as well as the promotional content. The communicational and emotional impact of the Web site is an important part of the Web experience and a major factor in attracting and retaining online customers.
Place
For the majority of E-Commerce cases involving any form of online interaction/transaction, the Web site is the counter, helpdesk and sales outlet where the actual commercial or noncommercial
transaction takes place. Moreover for products delivered in digital form (music, information, software and online services) the site fulfils even the task of the physical distributor by allowing the product delivery online.
Internet marketing refers to the use of Internet technologies, combined with traditional media, to achieve marketing objectives. Electronic business is a broader term referring to how technology
can benefit all internal business processes and interactions with third parties. This includes buy side and sell-side e-commerce and the internal value-chain.
Strategies for Improving Rural Marketing
Considering the environment in which Indian rural market operates there is need of the hour to evolve more effective strategies for rural marketing which would be in sync with rural physique.
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.
Client and Location specific promotion involves a strategy designed to be suitable to the location and the client
New product designs -A close observation of rural household items indicates the importance of redesigning or modifying products consumed by rural population. The manufacturing and marketing companies can think in terms of new product designs like small packs (e.g. sachets) specially meant for rural areas keeping their lifestyles in view.
'Bundling of inputs'-Denote a marketing strategy, in which several related items are sold to the target client, including arrangements of credit, after-sale service, and so on.
Sturdy products-Sturdiness of a product is an important factor for rural consumers. The product meant for rural areas should be sturdy enough to stand rough handling and storage. Nokia 1100
has positioned itself in the similar manner.
Brand name-The rural consumers being value for money customers are more concerned with the utility of the products. Being mostly semi literate, a brand name and/or logo which can be
easily remembered is very essential for rural consumers.
Unique Selling Propositions (USP)-Involve presenting a theme with the product to attract the client to buy that particular product. For examples, some of famous Indian Farm equipment
manufacturers have coined catchy themes, which they display along with the products, to attract the target client, that is the farmers. English version of some of such themes would read like:
The heartbeats of rural India
With new technique for a life time of company
For the sake of progress and prosperity
Pricing strategies:-
Pricing strategies are very much linked to product strategies. Some of these strategies are mentioned here.
1. Low cost/cheap products:-
Pricing strategy for rural market will largely depend upon scope for reducing price of the product to suit the rural incomes and at the same time not compromising with utility and sturdiness of the
product.
2. Avoid sophisticated packing:-
Adopting cheaper yet durable & aesthetic packaging can bring down the cost, as it is presently being done in the case of biscuits. Some innovation in packaging technology is very necessary
for rural markets.
3. Refill packs/reusable packaging:-
Such measures have a significant impact on the rural market as it helps in reducing price. Packaging material used should preferably lend itself for reuse. An ideal example in this direction can be the packing of fertilizers.
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.
Distribution strategies:-Most manufacturers and marketing companies have distribution arrangement for village with a population of at least 5000 people. Distribution strategies that are
specifically designed for rural areas are: through co-operative societies, public distribution system, multi-purpose distribution centers, distribution up to feeder markets/mandi towns
shanties/hat/jathras/melas, agricultural input dealers etc.
Promotion strategies:- Mass media is a powerful medium of communication. It could be television, cinema, print media,
and radio. Other means of mass media available are hoardings/wall paintings, shanties/hats/melas, non-price competition, special campaigns etc.
SWOT ANALYSIS
Strength
*700 million population uncovered.
*72% population contributes of half of India’s GDP
*Approximately size of rural market is 123000crores
*Rural India has seen growth in income due to rise in agricultural prices
*Less exposure to various brands so less competition
*Rise in expenditure is 9% since 2002
*Government initiatives like Bharat nirman, NAREGA and loan waivers have made rural India approachable and very marketable.
Weakness
*Low literacy rate.
*Lack of infrastructure like power, roads, etc.
*Fake Product in the market.
*No common language across area.
*Sparsely located population.
*Low earning per household.
Opportunities
Government spending in rural india is on increase
41 million kisan credit cards issued providing a cumulative credit of 977 billion to rural india.
Bharat nirman and Pradhamantri Grameen sadak yojna has resulted in increase in rural connectivity.
90% of villages are electrified.
Schemes like Rural Employment grantee act NEGA and loan waiver have pumped liquidity.
Rural markets are ripe and fresh a new brand can enter easily as
competition is low.
Rural India resistance to change gives established brand a
leverage
Threats
*Creating products for rural India is tricky.
*Only corporate with deep pockets can enter as huge infrastructure is required.
* Tough rural terrain requires extra handling.
*To reach sparsely located population a very scattered distribution network is required.
*Low availability of infrastructure facilities can cause loss of investment.
*Initial entrants in Rural India are exposed to more risk.
*Rural population is mostly illiterate; communication to them is a real challenge.
Conclusion
Prime Minister Manmohan Singh recently talked about his vision for rural India: "My vision of rural India is of a modern agrarian, industrial and services economy coexisting side by side, where people can live in well-equipped villages and commute easily to
work, be it on the farm or in the non-farm economy. There is much that modern science and technology can do to realize this vision. Rural incomes have to be increased. Rural infrastructure
has to be improved. Rural health and education needs have to be met. Employment opportunities have to be created in rural areas."
'Go rural' is the slogan of marketing gurus after analyzing the socio-economic changes in villages. The Rural population is nearly three times the urban, so that rural consumers have become the prime target market for consumer durable and non-durable products. Two-thirds of Indian consumers live in rural areas and almost half of the national income is generated here.
Rural India buys small packs, as they are perceived as value for money. Brands rarely fight for market share; they just have to be visible in the right place. Even expensive brands, such as
Close-Up, Marie biscuits and Clinic shampoo are doing well because of deep distribution; many brands are doing well without much advertising support such as Ghadi, a big detergent brand in
North India, is an example By 2012 it is expected that every village will be connected by an all weather road, every village will have internet connectivity, and almost every home will have
electricity and possess a mobile phone.
There is huge potential and definitely there is lot of money in rural India but the smart thing would be to weigh in the roadblocks as carefully as possible. Ultimately the winner would be the one with the required resources like time and money and also with the much
needed innovative ideas to tap the rural markets. This process should ensure the participation of rural people as consumers and producers in the globalization mechanism, with better livelihoods
and global access to markets. The real challenge of building a sustainable market linkage starts here.
Bibliography:-
1. Dixit Kavadeep, (August 2007), “Rural Marketing Issues and Strategies”, Marketing
Mastermind, Vol-VII, Issue-8, The ICFAI University Press, Hyderabad.
2. WIKIPEDIA.
3. www.investorwords.com
4. Dogra Balram, Karminder Ghuman, (2008), “Rural Marketing Concepts and Practices”,
Tata Macgraw-Hill Publishing Company Limited, New Delhi.
5. Work of prof.v.r.kishore kumar(M.a,M.phil)
6. Sukhpal Singh. Rural Marketing Management from K L K Rao, Ramesh G Tagat. Rural
Marketing: A Developmental Approach.
7. http://www.ibef.org
8.http://www.icmrindia.org/casestudies/catalogue/Marketing1/Unilever%20-%20Rural%20Marketing.htm
9. http://signaturebag.com/blog/?p=1047
10. http://www.scribd.com/doc/26876309/4-p%E2%80%99s-of-Rural-Marketing
11. http://ideasmarkit.blogspot.com/2008/11/tata-teas-rural-marketing-initiative-in.html
AUTHOR:-
Balprit singh,
NSHMCollege of Management & Technology
ArrahShivtala, Durgapur 713212
Mobile No. 9732372022
e-mail ID: balprit08@gmail.com,
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