Rural marketing


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Rural marketing

  1. 1. RURAL MARKETING<br /> BLOCK 2<br />Project Title <br />A brief Study On Haats (Weekly Bazaar) And Melas<br /> <br /> Submitted To –Mrs KAVITA Shukla <br /> <br /> Submitted by-Arjun kohli<br /> PG20095704<br /> TABLE OF CONTENTS<br />Introduction..….…………………………………………..<br /> Importance ..…….…………………………………………..<br />Reasons for interest in Rural market……………….............<br />Channel variant..………………………………………………<br />Haats……………………………………………………….<br />Advantages of Haats……………………………………….<br />Melas……………………………………………………….<br />Advantages of melas………………….. ….……………….<br />Approach……………………………………………………<br />Competition in rural market …….………………………………..<br />Conclusion………………………………………………….<br />INTRODUCTION:-India’s vast rural market offers a huge potential for a marketer facing stiff competition in the urban markets. The rural market environment is very different from the familiar surroundings of the urban market. Rural consumers have customs and behaviors that the marketers may find difficult to contend with.<br />The opportunities in the rural market are demonstrated by comparing consumption levels in urban and rural market for different product categories. Their volumes and growth show the importance of the market.understanding demographic profile of consumers and their response to brand offering is a useful approach to analyses the rural market.<br />The use of an existing network of channels in the rural market is the key to connecting with the rural heartland. Haats and melas that are unique to rural markets, supplement the retailer route to the rural market. The interactions between consumers and these unique institutions provide information for use in marketing decision.GROWING IMPORTANCE OF RURAL MARKETS• Hindustan Motors (HM) launched a utility vehicle the RTV (Rural Transport Vehicle), aimed at the rural market. One way of meeting the intense competition in the passenger car segment by HM is through increased efforts in rural markets. It has over40% of this rural market, expoliting the low prices, reliability and time tested rugged aspect of the Ambassador brand.• Titan industries the country’s largest watch maker is now set to aggressively woo the rural consumer. Titan intends to make in roads into the Indian hinterland with Sonata. The company’s watches are available in towns with a population of 20,000. Rural consumers who come to larger towns have access to Titan products.REASONS FOR INTEREST<br />• Untapped Potential:-Rural markets offer a great potential for marketing branded goods and services for two reasons. First one is the large number of consumers. A pointer to this is the larger volume of sales of certain products in rural areas as compared to the sales of the same products in urban areas. The second one is large untapped market which is yet to be discovered.• Market size and penetration:-The estimated size of India’s ruralMarket stated as the percentage of world population is 12.2 percentages. This means 12.2 percentage of the world’s consumers live in rural India. In numbers this works out to about 120 million households. In India the rural households form about 72 percentages of the total households.• Increasing income and purchasing power:-The agricultural development programmes of the government have helped to increase income in the agriculture sector. This in turn has created greater purchasing power in rural markets. The road network has facilitates a systemized product distribution system to village.<br />CHANNEL VARIANTS IN RURAL MARKETThe distribution in rural markets is different from urban markets for multiple reasons. One of the main reason is that the cost of reaching the outlets is higher for rural markets because of the geographical spread. There is also a difference due to the type of channel available to the marketer. A distinct feature of the rural market is the presence of haats and rural fairs. <br />TRADITIONAL HAATS AND MELAS IN INDIA There are 47,000 haats and 25,000 melas, which function as the economic, social and cultural nerve centres of rural India. MART undertook the first comprehensive study of these traditional fora for the Government of India in 1995. The objective was to understand the types of products sold, profile buyers, track sales achieved at these haats and melas and corroborate the frequency, location and duration of these marketing fora. The data-rich, path breaking report also provides guidelines to enable poor producers, supported by various government programmes and NGOs, to use haats for product marketing purposes. The report has helped put haats and melas firmly on the marketing maps of corporate. <br />HAATS:-Haats are periodic markets. Periodic markets mean that people assemble at a particular place at least once a week in order to buy and sell products. Haats operate in a weekly cycle. They may vary in the intensity of their transactions depending upon the season but they seem to have a fairly stable periodicity. They serve the village in which it is located and also the surrounding village. Each haat caters to the needs of a minimum of 10 to maximum of 50 villages from where an average of 4000 persons come to buy a range of daily necessity and services Consumers and traders who form a major part so the population attending these markets do not necessarily attach much importance to the population of the village in which the market is held. In their view the importance of a market is based on the number of stalls it haates specially the number of stalls selling urban consumer goods. Sellers at Haats are typically mobile. They sell in one haat on one day and move to another on the next. The reason for this is that villagers in Rural India are paid on a weekly basis. Haats are scheduled on the day that employees get their" Hafta" . Since the payment days differ from village to village, haat sellers also move accordingly. It is therefore said “Hat taa jaata hai haat”! 81% of visitors to haats said that they did not make purchases from their respective villages and regularly visited haats for their requirements. 58% said that they specifically come to buy a particular product and that the purpose of visiting the haat is to complete their “shopping list”. That haat was not seen as a place of fun. What is very surprising is the fact that 58% of people who visited haats said that the same product was available in their own village but that the shops and the village did not offer them the same variety, price and choice of bargains.<br />Advantages of companies marketing through Haats<br /><ul><li>Haats are a readymade distribution network and this large rural marketing system has been embedded in the fabric of rural society for over a 1000 years. A lot of re-distribution also occurs through haats. This is because, a large number of retailers and sub-wholesalers buy from haats for their village stores.
  2. 2. The study estimates that 47,000 haats are conducted in rural India. These rural super markets are much larger than all the world's K-marts and Wal-marts put together
  3. 3. Haats are the nerve centre of Rural India. They have been held on a regular basis across the length and breadth of the country for over 1000 years. Right from the time of Chandragupta Maurya, Haats are seen as a place for social, cultural and economic interchange.
  4. 4. What is most attractive to marketers is that 90% +of sales in haats are on cash basis. Traditionally, in village shops a lot of credit sales occur due to the fact that in a small geographic area of a village, everybody knows everybody. Considering that over 5000 visit a haat from 5 villages, the system gets derelationalised. Apart from the 90% cash sale, 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit.
  5. 5. The efficiency of this system of distribution is evident from the fact that melas have been used for over 1,300 years and have continued to remain popular inspite of India going through so many rulers, invasions and conflicts. This speaks volumes of the rigidity and strength of this rural marketing system.</li></ul>MELAS:-<br />India is a country of melas. Over 25,000 are held every year all over the country. It is seen that 5,000 of these are commercial melas, 2,000 are cultural melas, while the majority of 18,000 are held with religious significance. Exposure of a company’s product at the 500 “big” melas should be sufficient enough to generate product awareness in the rural market. Statistics reveal that the number of visitors per mela is approximately 7.5 lakhs. The largest such mela is held once every 12 years called the Maha Kumbh mela and attracts close to 2.5 crore people. This is the population of Delhi and Bombay put together converging at one place - indeed a tremendous marketing opportunity. On average, 850 outlets are set up in every mela.In fact, the Vali Yatra mela is held from the time of the Ramayan and has over 3,000 stalls. Sales at the Sonepur mela of Uttar Pradesh average Rs.40 crores. <br />The average sale per day at a mela is Rs.25 lakhs. The efficiency of this system of distribution is evident from the fact that melas have been used for over 1,300 years and have continued to remain popular inspite of India going through so many rulers, invasions and conflicts. This speaks volumes of the rigidity and strength of this rural marketing system.<br />Advantages to companies using melas<br /><ul><li>The Statistics presented above clearly indicate that the visitor turnout at melas is very high. In fact, what is more significant is that women and children participate in melas on a large scale. In fact, mela are one place where women have collective social sanction to leave their respective villages. This is very special because rural women are usually restricted from leaving the homes to visit other</li></ul> villages.<br /><ul><li>A high proportion of sales made at melas are of factory made products. The mood at melas is very conducive to making rural folk try out new things.
  6. 6. Sampling at melas is thus very successful in building awareness to new innovations and initiating trials. Visitors to melas are usually cash rich as most melas are held immediately post harvest. 73% of visitors to melas claimed that they came to buy a specific product.
  7. 7. However, the difference here between haats and melas was that only 14% of products purchased at melas were available in the visitor's village. This is because melas are generally used to sell durables, high priced items and new product types
  8. 8. The survey of melas indicated the type of outlets that exist. It presented that the clear distinction between haats and melas become apparent here. Where almost 40% of stalls in haats sold agro related products, only 5.8% of stalls in melas sold such goods. On the other hand, only 24.3% stalls in haats sold manufactured goods. This number increased to 42% of stalls in melas.</li></ul>Except Melas and haats some of different ways to pitch rural clients -<br />APPROACH <br />Corporations and advertising agencies have started working in the rural area with a different approach as compared to urban areas, like puppet shows in Punjab, Folk media like Ragini in Haryana for communicating qualities of Virat cement, Pala and Daskathia in Orissa for promoting safe electricity consumption and tooth pastes of Colgate Palmolive, Baul songs in West Bengal for advertising insecticides are some of the examples. Britannia has entered in to the rural market by participating in rural melas and displaying its down market brand Britannia Tiger Biscuits. These rural melas and weekly haats and melas  have become more popular medium of rural advertising by the media planners.<br />Through this arrangement they can break the saddle of scant geographical distribution of customers in rural markets as people of number of villages assemble together to participate in the fair. It is a good ground for brand awareness building, trial sales and sampling. It provides a wider audience at a fairly low cost. Companies like HLL, Titan and Colgate Palmolive use festivals like Rathyatra, Kumbh mela, and Onam for brand promotion. These companies are following a typical media schedule and are always in a march from one place to the other with our festival calendar and a collapsible arrangement of the exhibition setup. Companies can also use popular forms of entertainment like puppetry, nautanki, ragini, bhangra, qaualli and traditional dance shows to increase the brand experience. The companies can develop a story line relating to the brand and show the characters using the brands for their advantage and even the dresses of the characters can be that of the brand’s packaging.<br />COMPETITION IN RURAL MARKETCompetition in rural markets is varied in nature and a marketer faces competition not only from other brands but also from substitutes, especially in places where the product is new to the consumer. Such situations are quite common in rural markets. Competition for existing brands can be from other brands, from new player’s small unorganized sectors, duplicates and imitation. The task for a new player entering in the market is difficult given the advantage that entrenched brands have in rural markets.Entry strategy for a new playerThe entry of a new brand in the rural market is a difficult proposition. This is because in rural markets the pioneer creates a lasting impression and loyalty to such brands is higher. In the case of the organization entering in the rural market for the first time the sheer size of the market in geographic terms poses a formidable challenge in accessing retailers. Entry strategy in such situation includes,• Efforts to create shelf space for the product• To establish a symbiotic relationship with an existing marketer.Consumer pull creates a space for the brand on the retail shelf that is difficult to replace. In such a situation competitive efforts that rely on positioning alone are unlikely to create a sufficient impact.<br />CONCLUSION:-Rural markets are for marketers with perseverance and creativity. The market is extremely attractive with its vast potential but also provides challenges. It is a classic case of risk return situation. It is a high risk area but with the promise of a large customer following as the prize for those who succeed. The key to reducing the risk is to understand the market, the consumer need and behaviors.A marketer needs to understand that rural consumers are not a homogeneous lot. The rural market is not synonymous with the farmer. The consumer groups here differs by occupation, income, social and cultural grouping. The rural marketer will find it useful to identify consumer groups who require products purchased in the urban market.Adaptation to consumer needs of the rural market is reflected in products offered and the message used. Understanding and communication in the language that the rural consumer comprehends is a challenge the market has to face. The communication strategy that allows flexibility and autonomy to meet the local situation is important. Consumer purchase behavior is also reflected in distribution decisions. The periodic markets are an important social institution that marketers can user to supplement reaching the rural consumer.<br />