Challenges and opportunities of

rural marketPresented by Dr. Apar Singh Mr. Ranu Kumar ( School of Management Studies, PUP Pta)

A. Introduction

• India live in villages is a quoted facts.• A huge proportion of India’s population live

in 63, 30,000 villages.• According to census 2011, nearly 70 per

cent of the country’s population lives in rural areas. .

Rural Market

Definition of Rural area.

• According to the Reserve Bank of India, locations with population up to 10,000 will be considered as rural area and 10,000 to 100,000 as semi-urban.

• According to National Bank for Agriculture and Rural Development (NABARD), all locations irrespective of villages or town, up to a population of 10,000 will be considered as rural.

• According to the Planning Commission, towns with population up to 15,000 are considered as rural.

Impressive Facts About the Rural Sector

• There are 42,000 rural supermarkets in India which exceeds the total number of retail chain stores, i.e. 35,000 in the US. (Kashyap, 2010)

• The FMCG sector in India is the fourth largest in the economy, with a market size of over Rs 1,10,00/- crore.

• India’s per capita GDP in rural regions has grown at a Compound Annual Growth Rate (CAGR) of 6.2 per cent since 2000. The Fast Moving Consumer Goods (FMCG) sector in rural and semi-urban India is expected to cross US$ 20 billion mark by 2018 and reach US$ 100 billion by 2025.

• In the consumables market, the rural share is larger than the urban, so there are immense opportunities for those who don’t have difficulties in logistics, supply and storage while catering to rural customers.

• The main challenge and dilemma in the rural market is – large number of intermediaries leading to higher costs, dearth of suitable dealers, low density of shops, inadequate stocking of products, credit-driven market and low investment capacity of channel members and poor display of products on rural shop shelves.

REVIEW OF LITRATURE

• Kumar, S et al (20014) – Investigate the superior performance of local retail shop compared to out shopping in periodic markets is contrary to observation in literature developed in the context of urban out shopping. – Retail chains need to develop a separate program for location of outlets that serve rural areas as access influences retail performance. In rural areas marketers can use traditional periodic markets in addition to conventional retail store given the limited inter-format retail competition. 

• Patel, SK (2013) This research describes the challenges and strategies of rural marketing in India. there is huge potential and substantial growth opportunities in the rural markets, yet there are some challenges too, which caused hurdles in tapping rural markets. This study is a step forward in exploring various strategies to be adopted in the rural market along with the current scenario of rural marketing, highlighting key challenges related to rural marketing.

3. Objectives of the Study

• To find out the problems associated with rural market.

• To highlight the Challenges and Opportunities of Rural Marketing in India

4. DATE COLLECTION

• SECONDARY DATA

• Data is collected from various Published & unpublished Journals, Articles available in various websites, popular Journals, Text Books etc.

5. Problems & challenges of rural Market

• Indian Rural Market has always been complex to forecast and consist of special uniqueness. However many companies were successful in entering the rural markets. They proved with proper understanding of the market an innovative marketing idea, it is possible to bag the rural markets. The peculiarities of rural markets and rural consumers pose challenges to marketers in reaching them effectively. There are a large number of small villages which are not easily accessible because of all weather roads. The main challenges of rural marketing are discussed below ( show in figure 1)

4 A Approach

• Source : Rural Marketing in India written by Sumesh Raizada And Umesh Agarwal

2. Lack of per capital income

• This is the most crucial challenge which is faced by most rural people who has small lands or landless. Rural employment depend on agriculture.

• Although 30% of GDP (Gross Domestic Product) generated from rural areas. It is shared by 70% of the population so there are low per capital income(TP Gopalswami 2009).

3. Traditional Life:

• Life in rural areas is still governed by customs and traditions and people do not easily adapt new practices. For example, even rich and educated class of farmers does not wear jeans or branded shoes.

4. Low Literacy rate

• The literacy rate is low in rural areas as compared to urban areas. Marketers face communication problem. due to the lack of literacy rate rural consumers can’t different between counterfeits and original products and Print medium is not much effective and it is irrelevant since its reach is poor. So, low level of literacy becomes challenge for marketers in rural areas. The literacy level is as low (36%) when compared to all-India average of 52%.(Malick et al 2014)

5. Seasonal Demand:

• Income of rural people come from agriculture so here demand for goods in rural markets depends upon agricultural situation.

• Agriculture to a large extent depends upon monsoon and, therefore, the demand or buying capacity is not stable or regular.

6. Media Mix

• Media have lots of problem in rural areas.

• Television has made a great impact and large audience has been exposed to this medium.

• due to non-availability of power as well as television sets, majority of rural population cannot get the benefits of various media.

7. Language Barrier

• India is a country of many languages language become a barrier in effective communication.

• The number of languages vary from state to state, region to region, and probably from district to district(TP Gopalswami, 2009) 

8.Cultural Factors:

• Culture play important role in business.

• Culture is a system of shared values, beliefs and perceptions that influence the behavior of consumers.

• Rural consumers purchase product according to cultural their aspect.

9. Distribution and Warehousing

• The problems of physical distribution and channel management adversely affect the service as well as the cost aspect.

• , there are no facilities for public as well as private warehousing. Marketers face problem of storage of their goods

Opportunities of rural market

• India's rural population comprises of 12% of the world's population presenting a huge, untapped market .

• Infrastructure is improving rapidly.• Increase communication resources. • Increase in rural credit .• Rural Literacy level improved (After the 2011 census,

literacy rate India 2011 was found to be 74.04%.) .• Rural Development programs.• Percentage of BPL families declined (29.5 % of India's

population was poor in planning commission report 2011-12).

Conclusion

• There are many problem in rural market but opportunities more than problems. So marketers or business players should tripe rural market.

Thank you