RURAL MARKETING - A CRITICAL REVIEW

Rural Marketing - A Critical Review
ByDr. N. RajendhiranMBA, PhDDirectorPeriyar Institute of Management StudiesPeriyar UniversitySalem.

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 co-existing 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 realise 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, food, construction, electrical, electronics, automobiles, banks, insurance companies and other sectors besides hundred per cent of agri-input products such as seeds, fertilizers, pesticides and farm machinery. The Indian rural market today accounts for only about Rs 8 billion of the total ad pie of Rs 120 billion, thus claiming 6.6 per cent of the total share. So clearly there seems to be a long way ahead. Although a lot is spoken about the immense potential of the unexplored rural market, advertisers and companies find it easier to vie for a share of the already divided urban pie.
The success of a brand in the Indian rural market is as unpredictable as rain. It has always been difficult to gauge the rural market. Many brands, which should have been successful, have failed miserably. More often than not, people attribute rural market success to luck. Therefore, marketers need to understand the social dynamics and attitude variations within each village though nationally it follows a consistent pattern looking at the challenges and 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. A radical change in attitudes of marketers towards the vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.
What rural market buys?
Rural India buys 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. 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 — Ghadi, a big detergent brand in North India, is an example.
Why Rural Market?
The Indian rural market has a huge demand base and offers great opportunities to marketers. Two-thirds of Indian consumers live in rural areas and almost half of the national income is generated here. The reasons for heading into the rural areas are fairly clear. The urban consumer durable market for products like colour TVs, washing machines, refrigerators and air conditioners is growing annually at between 7 per cent and 10 per cent.
The rural market is zooming ahead at around 25 per cent annually. "The rural market is growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989 -crore(Rs billion) Videocon Appliances. "The urban market is a replacement and up gradation market today," adds Samsung's director, marketing, Ravinder Zutshi.
Reasons for improvement of business in rural area
Socio-economic changes (lifestyle, habits and tastes, economic status)
Literacy level (25% before independence – more than 65% in 2001)
Infrastructure facilities (roads, electricity, media)
Increase in income
Increase in expectations
MART, the specialist rural marketing and rural development consultancy has found that 53 per cent of FMCG sales lie in the rural areas, as do 59 per cent of consumer durable sales, said its head Pradeep Kashyap at the seminar. Of two million BSNL mobile connections, 50 per cent went to small towns and villages, of 20 million Rediffmail subscriptions, 60 per cent came from small towns, so did half the transactions on Rediff's shopping site.
Special features of rural market
Unlike urban markets, rural markets are difficult to predict and possess special characteristics. The featured population is predominantly illiterate, have low income, characterized by irregular income, lack of monthly income and flow of income fluctuating with the monsoon winds.
Rural markets face the critical issues of Distribution, Understanding the rural consumer, Communication and Poor infrastructure. The marketer has to strengthen the distribution and pricing strategies. The rural consumer expects value for money and owing to has unsteady and meager status of weekly income; increasing the household income and improving distribution are the viable strategies that have to be adapted to tap the immense potential of the market.
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. The rural audience are however critical of glamorous ads on TV, and depend on the opinion leaders who introduce the product by using it and recommending it.
Opinion leaders play a key role in popularizing products and influence in rural market. Nowadays educated youth of rural also influences the rural consumers. Rural consumers are influenced by the life style they watch on television sets. Their less exposure to outside world makes them innocent and fascinated to novelties. The reach of mass television media, especially television has influenced the buying behaviour greatly
Creating brands for rural India
Rural markets are delicately powerful. Certain adaptations are required to cater to the rural masses; they have unique expectation and warrant changes in all four parameters of product, price, promotion and distribution.
A lot is already emphasized on adapting the product and price in terms of packaging, flavouring, etc and in sachets, priced to suit the economic status of the rural India in sizes like Rs.5 packs and Re.1 packs that are perceived to be of value for money. This is a typical penetration strategy, that promises to convert the first time customers to repeated customers.
The promotion strategies and distribution strategies are of paramount importance. Ad makers have learnt to leverage the benefits of improved infrastructure and media reach. The television airs advertisements to lure rural masses, and they are sure it reaches the target audience, because majority of rural India possesses and is glued to TV sets!
Distributing small and medium sized packets thro poor roads, over long distances, into deep pockets of rural India and getting the stockiest to trust the mobility is a Herculean task. Giving the confidence those advertisements will support. Sales force is being trained to win the confidence of opinion leaders. Opinion leaders play an important role in popularizing the brand. They sometimes play the role of entry barriers for new products.
The method of promotion needs to be tailored to suit the expectations of the market. Techniques that have proved to be successful are Van campaigns, edutainment films, generating word of mouth publicity through opinion leaders, colourful wall paintings. The Wide reach of television has exposed the other wise conservative audience to westernization. Panchayat televisions in Tamilnadu carries message that are well received and contribute to community development.
Dynamics of rural markets differ from other market types, and similarly rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial consumer. This, along with several other related issues, have been subject matter of intense discussions and debate in countries like India and China and focus of even international symposia organized in these countries.
Rural markets and rural marketing involve a number of strategies, which include:
* Client and location specific promotion
* Joint or cooperative promotion
* Bundling of inputs
* Partnership for sustainability
Client and Location specific promotion involves a strategy designed to be suitable to the location and the client. Joint or co-operative promotion strategy involves participation between the marketing agencies and the client. '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. Media, both traditional as well as the modern media, is used as a marketing strategy to attract rural customers. Partnership for sustainability involves laying and building a foundation for continuous and long lasting relationship.
Innovative media can be used to reach the rural customers. Radio and television are the conventional media that are reaching the rural audience effectively. But horse cart, bullock cart and wall writing are the other media, which can carry the message effectively to the rural customers.
Rural marketing is an evolving concept, and as a part of any economy has untapped potential; marketers have realized the opportunity recently. Improvement in infrastructure and reach, promise a bright future for those intending to go rural. Rural consumers are keen on branded goods nowadays, so the market size for products and services seems to have burgeoned. The rural population has shown a trend of wanting to move into a state of gradual urbanization in terms of exposure, habits, lifestyles and lastly, consumption patterns of goods and services. There are dangers on concentrating more on the rural customers. Reducing the product features in order to lower prices is a dangerous game to play.

Stones thrown at minority institutions

MANGALORE: The Canara Organisation for Development and Peace (CODP) at Nanthoor, the Noorani and Noor-ul-Islam mosques, an orphanage, a house and a shop adjoining the mosques in Kumpala were damaged in stone-throwing by suspected Hindutva activists early on Sunday.
At the CODP, which is the social service organisation of the Mangalore Catholic Diocese, the attackers threw stones and damaged a stained glass with an image of Mary as well as windowpanes of the building. The incident came to light at daybreak.
Around 2 a.m., a string of Muslim institutions were targeted at Kumpala. The attackers are suspected to have been travelling on motorcycles. They first threw stones at the Noorani mosque, then moved on to a neighbouring cellphone shop and damaged it. They then damaged a concrete fence of a house next door before throwing stones at the adjoining Noor-Ul-Islam mosque and the orphanage run by it.(Source: THE HINDU, FEB 01,2010)

Plan to expand Salem airport

SALEM: Demands for the upgradation of landing aids, expansion of surface area and infrastructure and the introduction of cargo handling facilities at the Salem airport have gained momentum.
After 16 years of hibernation, the airport has become active with Kingfisher Airlines operating a flight between Chennai and Salem from November 15, 2009.
But facilities at the airport remain inadequate. The 6,000-feet runway that can handle smaller aircraft such as ATRs, which Kingfisher is operating now, needs to be expanded. The installation of sophisticated computerised systems for operational functions is also a need.
Highly placed sources told The Hindu that at present the airport was depending on an outdated beacon-type navigational system. Flights could not land at Salem in two instances owing to foggy conditions. As fly-by-wire systems now rule the sky, the installation of computerised navigational systems such as instrument landing systems has become imperative. (Source:THE HINDU,Feb 04,2010)

BT BRINJAL

As social activists, environmental researchers and a section of the agricultural scientists point out, it is for the first time that a genetically modified vegetable is being permitted to go through the field trials without studying the problems and consequences of introducing a vegetable carrying an alien genetic material. For the current scientific literature on the effect of GM (genetically modified) food on human health is not sure and clear about the nature and extent of the effect exerted by the genetically engineered food on the human well being.
Everything is going as planned and Bt.brinjal is expected to hit the market in a year’s time. But then what gives an ominous tone to the introduction of Bt.brinjal is the recent scientific study in Australia, which says that consumption of GM food could be one of the contributing factors to the increasing incidence of infertility.
In Europe, where there is a strong public opinion against the GM food, US agrochemical giants have not been able to make much headway in promoting their genetically engineered food products. For instance, in Switzerland, the moratorium on introducing genetically engineered food was extended on public demand. In Italy and Austria, government-funded studies have gone to show adverse impact of growing and consuming GM food.
Scientists at the Hyderabad-based Centre for Sustainable Agriculture wonder why there are no independent studies aimed at evaluating the impact of GM food from a variety of angles or an effort at labeling GM food products in India. Not labeling the products would imply that consumers will be left with no choice in so far as picking the food products is concerned.
Significantly, the research and field studies for the development of Bt.brinjal is done in Bangalore and Dharwad in Karnataka. Meanwhile, reports appearing in a section of the media point out that Maharastra Hybrid Seed Company(Mahyco), which is the Indian marketing arm for the US agrochemical and biotechnology giant Monsanto, has already received approval for the seed production of Bt.brinjal. However, the claim that Bt.brinjal would help end poverty is being questioned by experts familiar with the GM crops. Experience with Bt.cotton has already gone to show that with a heavy input cost including the purchase of seeds every sowing season, the farmer stands to gain little
The controversy over granting approval to Bt brinjal is set to deepen. Questions are being asked about the composition and functioning of the 16 member expert committee that granted approval to Bt brinjal.

Public Health System in India

Public health system in India suffers from many problems which includes insufficient funding, shortage of facilities leading to overcrowding and severe shortage of trained health personnel. There is also lack of accountability in the public health delivery mechanisms. These are some of the reasons which have placed India at the lowest rank in the Human Development Index. India however holds top position in migration of physicians to developed countries like UK and the US. According to Planning Commission the country has a shortfall of six lakh doctors, 10 lakh nurses and two lakh dental surgeons. This has led to a dismal patient-doctor ratio in the country. For every 10,000 Indians, there is just one doctor.
The much publicized National Urban Health Mission is yet to see the light of day. The scheme plans to monitor and improve the health of 22 crore people living in urban slums in 429 cities and towns. It was to be launched mid 2008 but the mission is yet to become functional.NURM is aimed at providing accessible, affordable, effective and reliable primary health care facilities especially to urban poor. Even for NHRM there is limited progress due to lack of standardization of medical facilities.
Female feticide continues to tarnish India�s image.The child sex ratio (0-6 years) was 945 (1991 census) and this declined to 927 girls per thousand boys (in 2001 census).The figures are alarming in prosperous states like Punjab(798),Haryana (819),Chandigarh (845),Delhi (868),Gujarat (883) and Himachal Pradesh (896).

Number of PHCs,CHC and SCs
Year	CHC	PHC	SC
2007	4,045	22,370	1, 45,272

Infant Mortality Rate
Year	Rural	Urban	Total
2007	61	37	55

Number of Health Care Workers
Year	Doctors at PHCs	Specialists at PHC	Health workers	Health workers
			Male	Female
2007	22,608	5,117	62,881	1, 47,439

Higher wages make Kerala the new 'Gulf' for migrant labourers

The high wages, Rs.250-300 a day, for unskilled labour in the construction sector seems to be the main attraction for migrant labourers, say officials and manpower recruitment agencies.The last study on 'Migration in India' by the National Sample Survey Organisation (NSSO) in 2001, estimated the number at one million.While there are around two million Keralites working in the Gulf and many in various parts of India and abroad, the state faces labour shortage in its booming construction sector and the traditional agriculture sector.It is this high wage rate that is attracting labourers here. Kerala is a 'Gulf' for them. In their native place many earn as little as Rs.50 as daily wages while it is Rs.250 or more here.
Migrant labourers from the neighbouring state of Tamil Nadu, Andhra Pradesh and Karnataka have been in the state for a long time. In recent years the state has been witnessing an increased influx of workers from Orissa and West Bengal.On Kerala attracting migrant labourers when the unemployment rate remains high, recruiters say the migrant labourers cost less than the locals.According to the labour department, the average wage fixed for construction workers in Kerala is Rs 232.63.There are different norms for different items of work in the construction sector.
The officials say it is extremely difficult to maintain a close surveillance on the employment of migrant labourers. The labour contractors are required to take a licence to deploy migrant labour. They also have to make a refundable deposit of Rs.1,000 - Rs.2,000 per labourer with the department. This would help us keep track of labour migration. But when migrant labourers come on their own, it is near impossible to know how many are employed here. So the migration is a serious thing that had to be considered by officials to solve this issue.

Trash and Recycling

PHILADELPHIA - Last year 4.7 million students and 1.1 million faculty and staff from 510 participating campuses collectively recycled or composted just over 69.4 million pounds of waste during the 10-week RecycleMania competition.This "friendly" competition pits colleges and universities in a contest with cross town rivals and schools across the nation to see who can reduce, reuse, and recycle the most campus waste. It offers bragging rights and special awards made out of recycled materials to the winning schools.Registration for the competition runs now through January 14, 2010 and is open to students, student organizations, staff, faculty or facility managers at degree-granting colleges and universities and runs now through January 14, 2010. Registration is fast and easy and can be done online at www.recyclemania.org or by contacting the RecycleMania helpline at (843) 278-7686.The contest begins January 17 and continues through March 27, 2010. RecycleMania uses the competitive spirit and campus rivalries to motivate students who might not respond to other environmental messages. Though many schools have had recycling and waste prevention programs for years, studies have found that large volumes of recyclables still end up in the trash. RecycleMania raises both awareness and, at in excess of 80 percent of participating schools, increases recycling levels.