An analytical study on the opportunities of rural marketing in india


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An analytical study on the opportunities of rural marketing in india

  1. 1. INTERNATIONAL JOURNAL OF (2013) – 6502(Print), ISSN (IJM) International Journal of Management (IJM), ISSN MANAGEMENT 0976 – 6510(Online), Volume 4, Issue 1, January- February 0976ISSN 0976-6502 (Print)ISSN 0976-6510 (Online)Volume 4, Issue 1, January- February (2013), pp. 183-189 IJM© IAEME: ©IAEMEJournal Impact Factor (2012): 3.5420 (Calculated by GISI) “AN ANALYTICAL STUDY ON THE OPPORTUNITIES OF RURAL MARKETING IN INDIA” Dr .Anukrati Shrama, Associate Professor , Faculty of Commerce and Management University of Kota ,Kota ,Rajasthan ABSTRACT The Indian rural market has a large demand and has lots of opportunities for marketers. India has almost 5,76,000 villages, 80% of which has population less than 1000 and about 77% of that population is dependent on agriculture or land based activities. There are several reasons why companies and marketers are getting attracted towards the rural markets. Almost every marketer is in the rat race to get a hold and grip on the rural market as a market leader. India’s 70 percent of the population resides in rural areas and 56 percent of the overall consumption comes from there. They study made by Boston Consulting Group (BCG) has found that small town consumers (those residing in their towns) are spending higher on premium products as against their peers in urban lands. Such consumers moved up the value chain during 37 percent purchase occasions as against 31 percent in metros in 2011- 12. The purpose of this paper is to find out the right marketing strategies for rural areas in India and along with this, an attempt has been made to examine the rural market environment, its problems and solutions. Keywords: Rural Marketing, Market, Buying Decision, New Product INTRODUCTION Rural India is getting a noticeable growth. The rural Indians are no more a negligible part for the big companies and MNCs. There could be several reasons for it, like increase in income, rising of agriculture opportunities, technology development and government support etc. The consumption patterns of rural population is certainly changing and it is witnessing a shift of MNC companies to rural India. Rural spending was significantly higher at Rs. 3,75,000 crore (US $67.57 billion) than urban consumption at Rs. 2,99,400 crore (US $53.95 billion) between 2009-10 and 2011-12 wherein rural consumption per person outpaced its urban counterpart by 2 percent. 183
  2. 2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 1, January- February (2013) According to a study by CRISIL and preliminary date released for 2011-12 byNational Sample Survey Organization (NSSO), the consumption of FMCG product, usage oftechnology is also enhanced in rural areas. According to a recent survey in December 2012 ofIMRB and Internet and Mobile Association of India (IMAI), “the number of claimed internetusers has witnessed a Compounded Annual Growth Rate (CAGR) of 73 percent sinceDecember 2010. As of June 2012 there are 3.6 million mobile internet users in rural India.This has grown 7.2 times in the past two years. The penetration of the computer literatesamong the rural population is 8.4 percent while the penetration of claimed internet users hasgrown from 2.68 percent in 2010 to 4.6 percent in 2012. The penetration of active internetusers has enhanced from 2.13 percent in 2010 to 3.7 percent in 2012. The data clearly shows that increased levels of media, technology and mobilepenetration have caused a shift in the rural buying decisions and purchasing patterns. TheIndian Companies and MNCs are trying to trigger the growth in rural areas. The marketershave noticed that rural people are now very much interested to dispose their income and arein the better position. Other than this the urban markets are matured, competition level is veryhigh, frequent changes in the taste and preferences of the urban consumers, short product lifecycle are also a few reasons which are encouraging marketers to go for the rural markets. Allwhat the marketers need is to make a proper research of the rural market environment andadopt a strategy accordingly.OBJECTIVESThe research paper consists of following objectives: 1. To study the rural market. 2. To analyze the growth potential of rural markets. 3. To recognize the factors to decide the success of rural promotionalstrategies. 4. To throw light on the improvements to make the right strategy for enhancing the rural market opportunities.RESEARCH METHODOLOGY For making this research successful and worthy, a questionnaire was structured.Through the help of the questionnaire, primary data has been collected. Informal interviewshave been taken of 200 respondents. The research also includes secondary data which hasbeen collected from various websites, books etc.REASONS TO GO FOR INDIAN RURAL MARKETS 1. Large Market: 70% of Indian population lived in 6,27,000 villages in rural areas. 2. High Income: Rural Indians have high income levels. By the advanced technology and agricultural opportunities, the income level is also enhanced of villagers. 3. Similar Preferences/Choices: Most of the rural people have similarities in their choice of the products. So it is easy for the marketers to access them. Lack of frequently changing demand is also a supportive factor why MNCs are shifting towards rural markets. 184
  3. 3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 1, January- February (2013) 4. Development of Infrastructure Facilities: Most of the rural areas are connected with roads and railways transportation. By the infrastructural development it is easy to supply the goods and the products to the rural areas. 5. Awareness of Media: Rural people are much more aware nowadays regarding the products available in the markets. They are quite aware about new products, product features, availability, price etc. through the help of media like television, radio, newspaper etc. 6. Rising Educational and Literacy Level: Due to the efforts of Government in India, schools have been established for the education of the rural children. Not only this, the private sector is also establishing and attracting village/rural students to go for higher studies. Most of the Colleges / Institutions are established on National Highways, nearly the village areas. With the development of educational standards there is automatically a great demand to buy and use the new products especially by the young rural people.FEW CHALLENGES FOR MARKETERSWhile going to the rural markets the marketers are facing challenges, few of them are asfollows: 1. Lack of Infrastructure Facilities: The Government is trying their best to provide the infrastructure facilities but still there is lot more needed to make the improvement on that highest level. Still the rural people are not getting proper electricity, banking services etc. 2. Depended on Seasonable Income: Rural people are dependent on the seasons for their income. If the season for agriculture is in their favor they have good income otherwise they are not able to spend amounts for purchasing of many products. 3. Traditional way of Living: Rural people are still living in their own traditional environment. They don’t want to change and are not ready to accept the modern products easily. 4. High but Scattered Market Area: Rural Markets are huge but scattered market area, it creates a difficulty for the marketers to access the rural areas. Due to this, marketers are unable to adopt many of the promotional tools for promoting their products. 5. Lack of Promotional Tools: Marketers can adopt the advertising as a promotional tool for the rural areas, but other than this tool, other tools are very difficult to adopt for marketing like sales promotion, personal selling, which are some of the tools which are successful in the urban markets but the marketers can not adopt it in the rural markets. 6. Uses of many Regional Languages: Rural people are using regional languages which are difficult for the marketers to understand. Most of the rural people fail to understand the languages which are used in the promotional tools like advertising so it is impossible to make them aware about the products. 7. Low Level of Education: The education level of rural people is very low in comparison to urban people. 185
  4. 4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 1, January- February (2013)SAMPLE SIZE The respondents in the sample consisted of rural and sub-urban consumers. 200 (twohundred) respondents around the area of Kota, Bundi (Rajasthan) were interviewed. Theserespondents have certain exposure to the urban lifestyle. The samples are further presented inthe tabulation form with their responses.INFERENCES Through the help of structured questionnaire, the study has been done. Each of thequestion covers the valid reasons to find out the rural environment and its necessities. Theanalysis of the table is as follows: Table 1: Age of Respondents Response Number of Respondents Percentage (%) of Respondents Less than 20 years 24 12 21 – 30 years 32 16 31 – 40 years 65 32.5 41-50 years 49 24.5 50 years above 30 15 Total 200The first question was designed to find out the age of the respondents from rural areas. Theabove table reveals that 32.5% of age group 31-40 years is mainly involved in the researchwork for concluding the right market strategy and to find out the rural market environment. Table 2: Gender of Respondents Response Number of Percentage (%) Respondents of Respondents Male 130 65 Female 70 35 Total 200The above table defines the gender which the researcher has involved into the research work.Male respondents were higher than the female respondents. Table 3 : Monthly Income of Respondents Response Number of Percentage (%) Respondents of Respondents Less than Rs. 2,000 25 12.5 Rs. 2,001 – 5,000 82 41 Rs. 5,001 – 8,000 35 17.5 Rs. 8,001- 10,000 28 14 Rs. 10,001 – 15000 25 12.5 More than 15000 05 2.5 Total 200 186
  5. 5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 1, January- February (2013)It is analyzed that the monthly income of rural people is in between 2,001-5,000 maximumand the range is in between 2,001-15,000 which indicates that the respondents are willing tomake expenditure on the purchasing of products. Table 4 : Education of Respondents Response Number of Percentage (%) Respondents of Respondents Less than Vth 05 2.5 Upto VIIIth 47 23.5 Upto Xth 78 39 Upto XIIth 39 19.5 Graduate 20 10 Post Graduate 11 5.5 Total 200The said table analyzed the education level of the rural respondents who have been involvedin the research. It clearly shows that most of the respondents are having education upto Xthstandard. So it can be concluded that they are able to understand the language of the productand the promotional tools used by media. Table 5 : Preferred Media of Communication Regarding Product Response Number of Percentage (%) Respondents of Respondents Television 62 31 Radio 30 15 Mobile 44 22 Newspaper 12 6 Posters 10 5 Word of Mouth 33 16.5 Drama/Skills 09 4.5 Total 200The table 5 reveals that the most preferred media to get information and details, regarding theproducts, is television. Table 6 : Adoption of Right Marketing Practice Response Number of Percentage (%) Respondents of Respondents Urban 95 47.5 Rural 43 21.5 Both 62 31 Total 200In spite of rural developments, the marketers are adopting marketing strategies for the urbanconsumers. According to the above table the marketers have to focus on both the markets,urban as well as rural but they have to make more efforts for the rural markets. 187
  6. 6. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 1, January- February (2013) Table 7 : Buying Decisions Influencers Response Number of Percentage (%) of Respondents Respondents Content 16 8 Price 68 34 Brand Name 84 42 Celebrity Endorsement 32 16 Total 200Table 7 analyzed that rural people are influenced by the brand name. A brand name can effecttheir buying decisions. If they are familiar with a brand name they prefer that again and again. Table 8 : Purchasing / Buying Decision Response Number of Percentage (%) of Respondents Respondents Self 92 46 Parents 59 29.5 Spouse 32 16 Children 17 8.5 Total 200The above table number 8 highlights that most of the rural people take the buying decisions ontheir own. They prefer to purchase a product with their willingness and own decision.Interference of parents is also there, but the first choice is their own. Table 9 : Thinking and Perception of New Product / Brand Response Number of Percentage (%) of Respondents Respondents No effect of new product 62 31 Try new product 50 25 Try to use after feedback of others 88 44 Total 200The table reveals that most of the respondents prefer to use a new product after getting a feedbackfrom others who have already used the product. It shows there is a hitch of acceptance of a newproduct by the rural consumers. Table 10: Impact of Language in Purchasing Decision Response Number of Percentage (%) of Respondents Respondents Regional/Local 85 42.5 National 50 25 Both of them 65 32.5 Total 200The last table number 10 shows that most of the respondents prefer regional or local languagewhile purchasing a product. The information regarding the product they want is preferred in theirlocal language. 188
  7. 7. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 1, January- February (2013)CONCLUSION The research reveals that most of the people who are engaged in making the decisionof purchasing, are in the age group of 31-40 years. While making strategies for ruralmarketing, the marketers must be aware about the media selection, proper use of the languagewhich is understandable by the rural people. Regional language play an important role inpurchasing decision, other than this rural people started recognizing the brand name whileshopping. They rely on the decisions of other people who have already used that product, sothe marketers need to make a proper marketing strategy. There are several opportunities inrural markets if marketers concentrate properly on the requirements of the rural consumers.Branding, media, usage of language are the few important factors which must be kept inmind, while going for rural marketing.REFERENCES1. Babu, S. Dhineshet al (2008), “Emerging Trends in Rural Marketing”, Del Castello, Ricardo, Maul Braun (2006), “Framework for effective rural communication for development”3. Goswami, Rahul (2009) “Making sense of the rural rush”, Iyer, Vidya (2009-2010), “Rural Marketing”, SIES Journal of Management, Vol. 6, Iss. 2; pg. 110, 4 pgs5. Jha, M., (April 1999) “Rural Marketing: Some Conceptual issue- Rural Scan”, vol. I no.26. Kashyap, Predeep and Raut, Siddhartha (2010 ed.), The Rural Marketing Book7. Lane, Bernard, Kenji Yoshinaga (1994), “Niche markets for the rural world”. The OECD Observer, Paris: Oct/Nov 1994, Issue no. 190; pp. 14Vishwanathan, Gomathi, “Challenges in Rural Marketing”, Dr._Gomathi_Viswanath8. Jha, Neeraj (2000), "Gung-ho on rural marketing", The Financial Express, June 1910. Krishnamurthy, Jagadeesh (2009), “Yeh Rural Kya Hai”? The Challenges and Opportunities of Marketing in Rural India”, EF, December11. Paninchukunnath, Ajith (2010), “3P Framework: Rural Marketing in India”, January – March, pp 54 – 6712. Business World, The Marketing Whitebook -2010-201113. Mirchandani, Rahul (2006), “Evolving a New Marketing Mix for Selling to Rural Indians”14. http://knowledge.wharton.upenn.edu15. 189