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Rural Marketing in India: Issues & Challenges | |||||||
Paper Id :
15986 Submission Date :
2022-04-19 Acceptance Date :
2022-04-20 Publication Date :
2022-04-25
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Abstract |
In India's rural economy, the concept of marketing has always fought for a prominent place in people's daily lives. As rural India comprises the majority of India's clients, the market or rural India nation generates higher profits within the country. In India, the rural market generates over half of the country's revenue. Because of its complexity, rural marketing in India has always been difficult to grasp. However, a number of businesses have been able to enter the rural Indian market. With the support of sophisticated selling strategies, they entered the rural sector with a thorough grasp. Corporations find it challenging to keep track of all of the significant opportunities available in India's rural sector. Regional, linguistic, economic, and cultural diversity are also present in the rural market. Growing purchasing power has piqued the interest of large firms such as ITC, HUL, Godrej, Colgate, BPCL, and Nokia, who are looking for more cost-effective distribution channels. The present paper brings in review of rural market Environment and major problems in India.
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Keywords | Rural Market, Marketing Strategies, Challenges, Opportunities, Untapped Population. | ||||||
Introduction |
India is a land of diversity and about 70% of the population lives in villages. Villages contribute significantly to the nation's economic development through producing food grains, vegetables, and fruits, among other things. The export of these agricultural products provides financial and foreign exchange revenues. "India is not Calcutta and Bombay, but India is seven hundred thousand villages," Mahatma Gandhi declared more than half a century ago. This phrase is as true today as it was back then. According to the 2011 Census, India has 640,867 villages with a population of 833.1 million people, accounting for 66.46 percent of the country's total population. Villages in India have long been overlooked, and they have never attempted to market their products to urban consumers. However, due to rising affluence among Indian urban consumers and increasing awareness as a result of technology advancements, the Indian consumer market has grown in recent years, making it appealing to both Indian and foreign businesses.
Rural product marketing is still in its infancy in today's market, thus it's a difficult task to sell a rural product, and getting rural items into the urban market is difficult. However, with the right marketing plan, this can be accomplished. Exploring the urban market for rural products has become a necessity for rural business growth and expansion.
Markets can be divided into two categories: urban and rural. The urban markets offer huge prospects for rural products, assuming that the rural items are properly formulated using the marketing mix.
Rural: The NSSO defines rural as any territory which has population density of up to 400per km2, have no municipal board and minimum 75% of male working population is involved in agriculture and allied activities.
The definition of rural is closely tied with the urban definition which is as follows:
Urban: As per the Census of India 2011, the term urban has been defined as:
1. All places having a municipality, corporation, cantonment board etc
2. All places having a minimum population of 5000 and at least 75 of the population in engaged in non agricultural activities; and
3. An area where density of population is at least 400 persons per sq. km.
Rural marketing is a developing concept, and businesses have recognized the value of an underserved market. With the intention of expanding into rural areas, the companies have upgraded their infrastructure and reach. Consumer awareness of the various brands accessible in the market has increased as a result of economic liberalization, resulting in a market size expansion. The definition given by American Marketing Association can be equally applicable in relation to rural segments.
The word rural has to be added to the definition given by AMA for marketing, Hence, Rural marketing can be defined as a process of planning, and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchange that satisfy individual and organizational objectives. The word implies that marketing activities are undertaken in rural areas to satisfy rural segments.
The selling of agricultural products from rural to urban regions and the marketing of manufactured goods and services in rural areas are the two major sectors of marketing. Rural marketing is a two-way marketing process in which items from rural markets are sold in urban markets, while goods and services from urban markets are sold in rural markets. It also include the movement of products and services within rural areas. Agricultural items such as food grains, oilseeds, cotton, sugarcane, tobacco, and others are traded from rural to urban areas. Fertilizers, pesticides, seeds, tractors, consumer durables such as mobile phones, bicycles, computers, and electrical and electronic items, as well as FMCG products, are all covered by urban to rural exchanges.
The following are the steps in the rural marketing process:
1. Urban to Rural: An urban to rural transaction involves urban marketers selling items and services in rural areas. Pesticides, automobiles, bicycles, refrigerators, and laptop computers are just a few examples.
2. Rural to Urban: A rural producer sells his agricultural produce in the urban market in a rural to urban transaction. This can be done in a direct or indirect manner. In direct transactions, the rural marketer sells directly to consumers in Mandis and Haats, whereas in indirect transactions, middlemen, agencies, government co-operatives, and other intermediaries play a key role in the sale of agricultural products such as fruits, vegetables, grains, pulses, handicrafts, and other items.
3. Rural to Rural: It is a process which includes selling or exchange of agricultural products, tools, cattle, carts and others to another village in its proximity.
Product marketing is a difficult endeavor in today's competitive marketplace. Companies compete fiercely for the right to sell their products. Identifying new markets has become a must for any company's growth and expansion. Markets are divided into two types: urban and rural. Urban marketplaces have become increasingly competitive and have achieved saturation. Rural marketplaces provide a great deal of business possibilities. The bulk of people in both emerging and developed countries reside in rural areas. As a result, there is a lot of room for product promotion in rural areas. Today's businesses have fully grasped the possibilities of rural markets. As a result, they begin to concentrate on rural markets.
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Objective of study | 1. To understand the nature of rural markets in India.
2. To evaluate the existing rural marketing scenario and improvement in same.
3. To discuss various issues involved in Rural Marketing in India. |
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Review of Literature |
Prof. C.K. Prahlad (2007) enumerates that the future lies with those companies who see the poor as their customers. He further explains that what is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable.
“India‟s rural market is a gold mine, but largely remains untapped by the Indian corporate sector. During recent times, some companies and organizations have implemented innovative projects to tap the rural market and deliver value added services to the doorsteps of the rural people through Internet-based marketing initiatives.” Suvadip Chakraborty, (2010).
Hagargi S. and Anil Kumar (2011) in their research study 'Rural Marketing in India: Some Opportunities and Challenges’ has said that there is little doubt that rural India provides a significant opportunity for any organization to grasp, according to ' Companies, on the other hand, confront numerous obstacles in dealing with rural markets, including understanding rural customers' demands, establishing trustworthy distribution methods, and comprehending some of the fundamental reasons for effective marketing communication to reach rural clients. These businesses can increase their profit, market share, and other metrics by implementing innovative distribution and marketing tactics in rural India.
Based on a percentage assumption of GDP growth, Mishra S. and Vinay Kumar (2012) concluded in their research study 'Rural Marketing in India Challenges and Opportunities' that the NCAER estimates that the number of poor households will be more than halved from the current million1 million, with middle-income families doubling and wealthy families. In rural India, the population has tripled in a decade. This upward trend from poverty to affluence in rural areas will boost purchasing power. Today, a big number of poor consumers in rural areas will enter the market as first-time purchasers. Gaining a substantial portion of the rising rural pie might lead to a fundamental shift in management thinking, moving away from high profit margins, high value unit sales, and capital efficiency to high volume, capital efficiency, and one-size-fits-all mindsets and toward market innovation. To compete in the dynamic rural market, businesses are adopting special steps. Many studies in the context of the Indian market in rural areas have demonstrated that the unpredictability of low-value prospective supply, such as rural India marketing, is crucial.
Rural marketing in India and several other developing economies is ever growing and complex to understand. Its suggested by the author to enhance the understanding of the rural consumer of the product being sold to them, Rural markets do not have ever growing fast paced trends and what influences their buying behavior is the brands awareness and presence in a market. Before launching a product, its advice that any brand tests and executes its product on a trial basis for a better understanding and to measure how the audience responds (Singh, 2017).
The 4As model of rural marketing has been a more consumer-oriented approach towards understanding the rural consumer, the 4As of Rural Marketing are an effort for sustainability in the rural markets, this model is more suitable and successful for rural markets. For acceptance the products need to be of good quality high value and of maximum utility in a rural environment. The rural customer is concerned over the pricing of the products as they do not earn equally to their urban counter parts hence need to be able to afford products for their maximum value and minimum price available. Awareness should be done with keeping in mind the rural perspective and their point of view, and acceptability means to introduce distribution methods whose implemented along with the help of rural consumers can be successful is benefiting the consumers as well as the companies (Naidu, 2017).
A study on SWOT in Rural Marketing state how the rural market has changed in the past decades, it was not a target market area earlier but today it has a consumption growth rate higher than the urban market; Rural market is expecting an increase in demands. The authors conduct the study in southern-part of Tamil Nadu in India. In the SWOT analysis, it is found that between traders and farmers there are some differences with regard to certain variables. The personal efforts by the marketers are the strengths, the weakness is the challenges which a marketer faces in the rural market (Nadarajan & Rangith, 2018). |
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Main Text |
Problems in Rural
Marketing Traditional Life Traditional life in rural
areas is still controlled by old beliefs and practices, and many people are
resistant to change. Farmers who are well-educated and well-dressed, for
example, never wear modern attire or branded footwear. Low Literacy In these places,
effective educational facilities are lacking. When compared to the national
literacy average of 52, the education level is quite low (36 percent). Communication Problems In these locations,
technologies such as the telephone, fax, and message are few. Rural areas are
unable to benefit from such opportunities, but owing to the correct application
of information technology, this situation is extremely volatile. Unawareness In the Indian markets,
there is a lack of awareness and knowledge of client buying behavior, which
causes problems in developing methods and selling tactics. The market's need
for a product is based on the farming environment, as farming is one of the
most important sources of money. Language Barrier Another challenge that
merchants must deal with is the variety of languages spoken in rural
communities across different geographies. Inadequate banking and credit
facilities: Lack of adequate banking and credit facilities also hinders
distribution in rural areas. Rural outlets require banking assistance to
facilitate remittances, stock replenishment, and credit transactions in
general, as well as to acquire credit from the bank. In the absence of suitable
credit facilities, retailers are unable to carry optimal stock levels. Transportation There are certain regions
where transportation systems, such as rail and road, are not adequately
connected. In the rainy season, Kacha routes are impassable, and the inner
communities become isolated. Scattered Market In certain sections of
India, about a quarter of the population lives. Rural areas account for 80-90
percent of the overall population density in some places. "Demand is
dispersed and unfocused, making marketing communications challenging." Purchasing Decisions Rural buyers are always
cautious when determining what to buy, and the process is tedious and
drawn out. They prefer to gain some early experience with the goods and will
only purchase it once they have reached a satisfactory degree of satisfaction. Rural Markets and Sales Management When compared to urban
marketing, rural marketing requires more personal selling effort. The rural
salesman must also be able to assist rural customers in making product selections.
It has been noticed that salespeople in rural areas do not appropriately
motivate their customers. Because his consumers are very traditional, the rural
salesman must be a patient listener. To get a favorable response from him, he
may have to spend a lot of time on consumer visits. In rural marketing, channel
management is likewise a difficult task. Village distribution networks are
longer and involve more intermediaries, resulting in higher consumer pricing. Warehousing Problems Many agricultural goods
are seasonal in production, but demand is constant. The storing function
compensates for differences in quantity and timing. Rural areas face unique
challenges in warehousing as well. The top tier of public storage in our
country, the central warehousing corporation and state warehousing, have not
expanded their network of warehouses to rural areas. In the absence of suitable
storage facilities, effective distribution in interior outlets is nearly
impossible. Stocks are only kept in towns due to a lack of adequate and
scientific storage facilities in rural areas. Rural Marketing
Opportunities 1.
The Indian government has taken a number of steps to provide and
renovate infrastructure in some areas, which will help to increase the factor
impact in the distribution of products, goods, and other services, resulting in
increased income as a result of increased consumption. 2.
Multinational corporations such as Flipkart, Snapdeal, and Paytm
have inked Memorandums of Understanding (MoUs) with the Indian government to
prosper in places where regional centers are built in villages as part of the
'Digital India' plan. Some Suggestions to Improve
Rural Market 1.
Market and warehousing infrastructure should be regulated to
ensure fair prices. 2.
To reach the ultimate consumer in the shortest time possible at
the lowest cost, an efficient marketing and distribution system is required. 3.
Public weighing machines, one in each rural market, to ensure
that farm and non-farm arrivals are weighed correctly. It's also necessary to
keep the items in cold storage. 4.
Existing marketing staff should be expanded, and adequate
training in farm produce kept in warehouses should be provided.
5.
Proper packaging technology, which determines the quality of
goods, must be enhanced. |
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Methodology | Research methodologies used consists of Secondary Data because of its descriptive nature. |
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Conclusion |
To summarize, marketers in rural areas are known for their ingenuity and endurance. The rural market is quite appealing and has a lot of promise. It's a classic example of a risk-reward scenario. It is a high-risk market that, on the other hand, promises the biggest gains. Understanding the market's needs, goals, and behaviour is critical to lowering risk. The rural consumer groups in this area are diverse in terms of work, economic, social, and cultural affiliations. Consumers in the service industry, whether with the government or the organized sector, make up a sizable portion of the rural market, and this group is a ready market for urban products.
Indian economy is primarily based upon primary sector, which means our dependence upon agriculture sector is more. Rural marketing has an important role to play in a developing country's economic development. The need of the hour is to make a concerted effort to provide essential services to rural consumers. Infrastructure is rapidly developing, and all of these prospects entice businesses to target the rural market. Companies in rural India can achieve more revenues, market share, and other benefits as a result of technological breakthroughs in product delivery and marketing. Marketers have a better future potential in rural areas, where they may take advantage of several chances. |
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