Rural Marketing Challenges & Strategies

The concept of Rural Marketing in India Economy has played an influential role in the lives of people. The rural market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioral factors operating in the country. Rural marketing determines the carrying out of business activities bringing in the flow of goods from urban sectors to the rural regions of the country as well as the marketing of various products manufactured by the nonagricultural workers from rural to urban areas. The rural market in India is vast, scattered and offers a plenty of opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby, the maximum number of consumers.

The rural market has been growing steadily over the past few years and is now even bigger than the urban market. About 70 percent of India’s population lives in villages. More than 800 million people live in villages of India. ‘Go rural’ is the marketer’s new slogan. Indian marketers, as well as multina¬tionals, such as Colgate-Palmolive, Godrej and Hindustan Lever, have focused on rural markets. Thus, looking at the opportunities, which rural markets offer to the marketers, it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage.

Research is based on primary and secondary data .to collect information from websites, other social media and report of rural areas .find out the how rural marketing can help to improve sales. “Rural marketing is now a two-way marketing process. There is inflow of products into rural markets for production or consumption and there is also outflow of products to urban areas”.

Charecterstics of Rural Consumer

Reference Group Typically, in a rural area the reference groups are primary health workers, doctors, teachers and panchayat members, the village trader or the grocer, commonly called ‘Baniya’ or ‘Mahajan’ are an important influencer in the decision making of rural customer. A marketer needs to be aware of these influences that can effect changes in the rural customer’s consumption patterns. Occupation Consumption patterns differ according to income levels. Typically, in a rural area the principal occupation is farming, trading, crafts, plumbing, electric works, primary health workers and teachers. Agriculture and related activities continue to be the main occupation for majority of the rural population. Land is the major source of income for about 77% of the population. Media Habits Rural people are fond of music and folklore. In rural areas a popular form of entertainment is the ‘Tamasha’ and ‘Nautanki’. And then there are television, radio and video films. Rural Electrification The main objective is to provide electricity for agricultural operations and for small industries in rural areas. About 5 lakh villages (77%) have electric supply and this has increased the demand for electric supply and this has increased the demand for electric motors, pumps and agricultural machinery. Other Variables Culture, language, religion, caste and social customs are some other important variables for profiling a rural customer. Rural consumers have a lot of inhibitions and tend to be rigid in their behavior. A company has to take intense care while targeting them.

At present, three out of four of country’s consumers are in rural market and one-half of national income is generated there. A number of corporate units have been trying to get grip on the rural market in a variety of ways. There is no doubt that rural market reveals opportunities and great attraction to marketers. But, it not as easy as it seems on surface. It is not so simple to enter and succeed in this market in a smooth way. This market poses a variety of challenges, and, therefore, the marketer has to work hard to tackle these challenges tactfully. A company planning to enter and/or expand rural market must consider these problems seriously.

Stratergies to Capture Rural Market

The past practices of treating rural markets as appendages of the urban market is not correct, since rural markets have their own independent existence, and if cultivated well could turn into a generator of profit for the marketers. But the rural markets can be exploited by realizing them, rather than treating them as convenient extensions of the urban market.

Marketing Strategy Marketers need to understand the psychology of the rural consumers and then act consequently. Rural marketing involves more exhaustive personal selling efforts compared to urban marketing. Firms should abstain 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

Distribution Strategy One of the ways could be using company delivery van which can serve two purposes - it can take the products to the customers in every nook and corner of the market, and it also enables the firm to establish direct contact with them, and thereby facilitate sales promotion. Annual "melas" organized are quite popular and provide a very good platform for distribution because people visit them to make several purchases. According to the Indian Market Research Bureau, around 8000 such melas are held in rural India every year. Rural markets have the practice of fixing specific days in a week as Market Days called "Haats' when exchange of goods and services are carried out. This is another potential low cost distribution channel available to the marketers. Also, every region consisting of several villages is generally served by one satellite town termed as "Mandis" where people prefer to go to buy their durable commodities. If marketing managers use these feeder towns, they will easily be able to cover a large section of the rural population.

Promotional Strategy Marketers must be very careful while choosing the mediums to be used for communication. Only 16% of the rural population has access to a vernacular newspaper. So, the audio visuals must be planned to convey a right message to the rural folk. The rich, traditional media forms like folk dances, puppet shows, etc., with which the rural consumers are familiar and comfortable, can be used for high impact product campaigns. Radio is also very popular source of information and Entertainment, Adds on radio can also be a helpful tool for marketers Some other Strategies to be followed in Indian Rural Market o Decentralizing rural markets by detaching them from the urban bases. A give-and-take two-way approach should replace the present one-way exploitation. o The salesman in rural markets should be selected from the educated unemployedØvillagers, trained well and appointed as salesmen. The town-to-villages shuttling salesmen are to be replaced by stationary salesman in villages. o Companies should also adequately concentrate on educating the villagers to save themØ from spurious goods and services.

Rural markets are laggards in picking up new products. This will help the companies to phase their marketing efforts. This will also help to sell inventories of products out dated in urban markets. o In rural India, consumers are not brand-loyal, but their purchase patterns can be termed as “brand stickiness” So, more brand awareness and presence in the markets will influence the purchasers. o It is important for any brand to test the campaign before as well as after it is executed to understand and measure the audience consumption patterns

Rural market has an untapped potential like rain but it is different from the urban market so it requires the different marketing strategies and marketer has to meet the challenges to be successful in rural market. A rural consumer seeks a good qualitative product at reasonable price with some additional advantage in terms of quantity of price reduction.

• 1. Wide and Scattered Market: Wide and scattered market is difficult to reach in both the aspects – promotion and distribution. Rural India is spread in the entire county in around 6 lakhs villages of different sizes while urban population is concentrated in around 3200 cities. Most of villages are extremely small with population less than 500 people. Only one percent (6300) villages have a population of more than 5000. It is challenging tasks to choose target markets and to serve them effectively.
• 2. Problem of Designing Products: Products sold successfully in urban markets, may not necessarily be successful in the rural markets due to difference in utility value of the products. Mind-set of rural segments seems quite astonishing and different. Existence of considerable heterogeneity among rural folks poses challenges for marketers to incorporate their uneven expectations in the products.
• 3. Transportation Bottleneck: Transportation is the nerve centre for any type of business. Most of villages are not properly connected with main roads. Every year during monsoon thousands of villages are disconnected for a longer time. Lack of proper transportation hinders marketing activities. Agro-based products cannot be sent to marketing centers, and industrial products cannot be supplied to rural population safely in time. In certain areas, even construction of road or railway is difficult to construct and maintain.
• 4. Seasonal and Irregular Demand: Rural demand is characterized as seasonal and irregular. So, companies cannot concentrate on rural segments as it is difficult to plan. In the same way, demand depends on income of rural customers, and income is quite uncertain because they depend on agriculture, and agriculture depends on monsoon.
• 5. Uncertain and Unpredictable Market: Market response is difficult to scale. They don’t have stable and predicted behaviour. In such a situation, the effective marketing strategies do not make a sense. Rapid changes are difficult to incorporate and, hence, there are more chances to suffer. Overwhelming response of rural population to some products experiences sudden fall. Market planning remains ever challenging in rural segments.
• 6. Low Living Standards: Rural customers have low income, low purchasing power, low literacy rate, and, therefore, low standard of living. But, picture is now changing and marketers can have better opportunities than ever. Low standard of living restricts their buying ability and pace of adopting products.
• 7. Lethargic Life Style: Lack of desire for a new lifestyle is most critical issue for a marketer. They cannot be easily convinced to try, use and adopt certain products with better qualities and innovative features Product modification does not create desirable and positive effects on rural folks. Customs, established beliefs, superstitions, etc., restrict their behaviour. Unfortunately, their opinion leaders lack scientific approach. Innovative and superior products are difficult to be introduced successfully in rural areas.
• 8. Language Problem: Language is a main constrains in communication strategies. Multiplicity of languages spoken in rural areas makes marketing activities difficult. Languages differ from state to state, and area to area in the same state. While designing advertising, personal selling, and publicity strategies, marketers cannot fulfill linguistic expectation of all rural people. Promotion programme always lacks versatility.
• 9. Urban Marketers v/s Rural Customers: The executives in companies cannot understand the consumer psychology of rural markets. Lack of awareness and understanding about consumer behaviour in rural markets create problems in formulating marketing strategies. Rural and urban customers significantly differ in terms of habits, tastes, uses, preferences, and other such aspects. So, any attempt to satisfy rural customers with urban mind (marketing executives born and brought-up in urban climate) results into vain endeavor.
• 10. Backwardness: Rural customers are economically backward. More than 30 percent of the rural masses live below the poverty line. Poverty confines them to spend even for basic necessities. Backwardness also affects their mentality to change. Their poor purchasing power and rigidity are main constraints for marketers to serve them.
• 11. High Inventory Costs: Since rural demand is limited and uncertain, an effective inventory management is difficult. Besides, the retailers serving in rural areas don’t have adequate knowledge and aptitude to decide optimum inventory. Unnecessary stocks cut their profit margin, and they lose customers in case of inadequate stocks.
• 12. Inadequate Marketing Support: Normally, producers and wholesalers do not extend full support to rural retailers in terms of liberal credit, financial assistance, and other facilities that they offer to traders of urban areas. In same way, rural customers and retailers are not given adequate space in designing overall marketing programme.