rural haat

8/10/2019 Rural Haat

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Opportunity andChallenges

in

Indian Rural Markets

Presented by :

Group-1


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INTRODUCTION

Rural marketing is defined as managing allthe activities involved in assessing,stimulating and converting the purchasingpower of the rural consumers into effectivedemand for specific products and servicesand moving them to the people in ruralareas to create satisfaction and a better

standard of living and thus achievingorganizational objectives.


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MARKETING MYTHS UNDERMINED

Marketing Myth 1: Rural consumers are not worthbothering about since they they buy loose , unbrandedproducts rather than the branded variety.

Marketing Myth 2 :It's okay if you're Nirma. Ruralconsumers will only buy really cheap mass market brands.

Marketing Myth 3: Rural consumer will take what's givento them. Marketers often believe that if they have solidsales in rural areas, those are secure.


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Cont.

Marketing Myth 4: One family, one brand. Marketersoften expect rural households to be homogenous inconsumption - there's one brand for the whole

households.

Myth 5: Distribution drives rural sales. Rural marketing isonly about distribution. Only if you can crack logistics -

and many companies can't be bothered - well you sell inrural areas.


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WHAT MAKES RURAL MARKET ATTRACTIVE?

Rural India is generating more than half of the nationalincome.

India's 58% disposable income comes from its rural parts(source: Rural Marketing By Balram Dogra )

No. of villages in India - 6,40,867 (Census, 2011).

Population in Rural in India -833,087,662(68.84%)(Census,2011).

53% of all FMCGs and 59% of all consumer durables aresold in the rural market.

42 million rural households availing banking services incomparison to urban households.

Indian rural market is almost twice as compared to theentire market of USA and Russia.


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Cont.

50% BSNL mobile connection in small villages.

Estimated annual size of rural market:- FMCG Rs. 75,000 crores

Durables Rs. 6,500 crores

Agri-inputs and Tractors Rs. 55,000 crores

2/4 wheelers Rs. 10,000 crores 46% of soft drinks sales come from rural areas.

49% of motorcycles sales come from rural areas.

Rural India accounts for 59% of cigarettes sales.

In 20 years, rural Indian market will be larger than thetotal consumer markets in countries such as South Koreaand Canada and almost 4 times of the size of todaysurban market.

Close to 10% of Maruti Suzukis sale come from rural


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OPPORTUNITIES

LARGE POPULATION: 742 million Indiansconstituting 138 million households reside in6,40,867 villages (Census, 2011). The size of ruralmarket itself speaks of its potential

GROWTH IN MARKET: The market has been growingat 3-4% per annum adding more than one millionnew consumers every year.

TECHNOLOGY USED BY RURAL INDIA: Today's ruralchildren and youth will grow up in an environmentwhere they have 'information.


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Cont.

INCREASING INCOME AND PURCHASING POWER:The agricultural development programs of thegovernment have helped to increase income in theagricultural sector. These in turn have createdgreater purchasing power in rural markets.

The average annual growth in monthly per capita consumption expenditure(MPCE) between 2005 and 2010 in real terms stood at 1.4% as per the 66th roundof the survey, it grew by around 9% between 2010 and 2012 (NSSO)


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Cont.

INCREASE IN LITERACY RATE :Literacy rate isincreasing in rural areas. According to census 2011 it stoodat 68.9% (2001 census 58.7%).


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Cont.

INFRASTRUCTURE IMPROVING RAPIDLY :In 50years only, 40% villages have been connected by roads, innext 10 years another 30% would be connected. Ruraltelephone density has gone up by 30% in the last 10 years.

Post Offices - 1,38,000

Haats (periodic markets) -42,000 Melas (exhibitions) -25,000

Mandis (agri markets) -7,000

Public Distribution Shops -3,80,000

Bank Branches -32,000


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Cont.

MARKET SIZE AND POTENTIAL :The size of India srural market is stated as 12.2 % of the worlds consumersleave in rural India . In India, rural household farm about72% of total household constitutes a huge market by anystandard.

REDUCTION OF RISK DURING RECESSION: It hasbeen observed that companies which cater both urbanand rural markets tackle the recession in the better way.

The demands for goods in the urban market often followa cyclic whereas in the rural market it is steady. Socompanies can safeguard themselves from the harmfuleffects of recession after entering in the rural market.


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Cont.

ACCESSIBILITY OF MARKETS: The road network hasfacilitated a systemized product distribution system tovillages. An increasing number of companies are supplyingvillage markets directly. Increasing direct contacts to villageshelps product promotion and availability of the product in

the village shop.

CONSUMER BEHAVIOUR CHANGES: Increased literacyand greater awareness in rural markets create new demands

and discriminating buyers. This is observed more in theyounger generation. In villages today, this segment of buyersconsumes a large variety of products, both durables and12non-durables. There is a visible increase in the consumptionand use of a variety of products , which is easily observed.


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Cont.

INCREASE POPULATION AND HENCE INCREASE INDEMAND :The Rural market in India is vast andscattered and offers a plethora of opportunities incomparison to the urban sector. It covers the maximumpopulation and regions and thereby. the maximum

number of consumers. More than eighty percent of ruralmarkets in India still do not have access to any sort oforganized marketing and distribution.


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Cont.

FACTOR INFLUENCE BUYING BEHAVIOR Geographic Location (For example , nearness to feeder towns andindustrial projects influenced the buying behavior of the consumers in respectivecluster of villages)

The way the consumer uses the product (For exampleLack of electricity automatically increase the purchase of batteries byrural consumers.: since the rural consumers cannot use washing powders/detergents powders that much, as they wash their clothes in streams orponds , they go is more for washing bars and detergents cakes.)

LOW PENETRATION RATE

COMPETITION IN URBAN MARKETING LOW PROMOTIONAL EXPENSES

NEW INCOME DUE TO AGRICULTURAL /RURALDEVELOPMENT/OTHER SOURCES OF INCOME


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CHALLENGES

LIFESTYLE :-The rural consumers are marked by aconservative and tradition-bound lifestyles. But thislifestyle of a sizeable segment of rural consumers hasalready changed significantly in recent years .The changescan be attributed to several factors such as:

Growth in income and change in income distribution .

Growth in education.

Enlarged media reach ( particularly television).

Growing interaction with urban communities.

FACTOR INFLUENCE BUYING BEHAVIOR

Rural consumers perception of products are strongly influenceby cultural Factors . (For example-the preference in respect ofcolour, size and shape is the result of cultural factors.)

- Tradition ,Family , Media etc.


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Cont.

MANY LANGUAGES :India is a country of many

languages. Language becomes barrier in effectivecommunication in the market efforts. The number oflanguages vary from state to state, region to region anddistrict to district, etc.

SEASONAL DEMAND :Seasonal demand is mainproblem of rural market. Agriculture situation plays asignificant role in the demand of commodities in the rural

market because it is the main source of income. Againagriculture depends on monsoon so buying capacity ofrural consumers varies. Despite this, many rural areas arenot connected by rail transport. Kuccha roads become

unserviceable during monsoon.


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Cont.

Segmentation and targeting. Physical distribution(problem in Transportation and

warehousing )

Channel management.(Distance betweenProduction point and Rural Market,

Poor viability of theoutlets , Non-Availability of Dealers ,Added multiplecost.)

Marketing communications.(language barrier,no adequate media coverage )


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References

http://censusindia.gov.in/Data_Products/Library/Indian_perceptive_link/Ce

nsus_Terms_link/censusterms.html http://www.yourarticlelibrary.com/society/10-major-differences-between-

rural-and-urban-societies/23390/

https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDIQFjAD&url=http%3A%2F%2Fwww.answers.com%2FQ%2FWhat_is_the_Difference_between_rural_and_urban_market&ei=TcF_VKKLCI6wuATYyoDYAw&usg=AFQjCNFehOm0ws-19Dg1uDAKzx31IYirig&bvm=bv.80642063,d.c2E

Rural Development Management - Google Books

Rural Marketing - Balram Dogra - Google Books

A Textbook on Rural Consumer Behaviour in India - A Study of FMCGs - Dr.

A Sarangapani - Google Books Marketing Management: Text and Cases Indian Context - Tapan K. Panda -

Google Books

Challenges and Opportunities of Indian Rural Market | Kumar | InternationalJournal of Marketing Studies
http://censusindia.gov.in/Data_Products/Library/Indian_perceptive_link/Census_Terms_link/censusterms.htmlhttp://censusindia.gov.in/Data_Products/Library/Indian_perceptive_link/Census_Terms_link/censusterms.htmlhttp://www.yourarticlelibrary.com/society/10-major-differences-between-rural-and-urban-societies/23390/http://www.yourarticlelibrary.com/society/10-major-differences-between-rural-and-urban-societies/23390/http://censusindia.gov.in/Data_Products/Library/Indian_perceptive_link/Census_Terms_link/censusterms.htmlhttps://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDIQFjAD&url=http://www.answers.com/Q/What_is_the_Difference_between_rural_and_urban_market&ei=TcF_VKKLCI6wuATYyoDYAw&usg=AFQjCNFehOm0ws-19Dg1uDAKzx31IYirig&bvm=bv.80642063,d.c2Ehttps://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDIQFjAD&url=http://www.answers.com/Q/What_is_the_Difference_between_rural_and_urban_market&ei=TcF_VKKLCI6wuATYyoDYAw&usg=AFQjCNFehOm0ws-19Dg1uDAKzx31IYirig&bvm=bv.80642063,d.c2Ehttps://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDIQFjAD&url=http://www.answers.com/Q/What_is_the_Difference_between_rural_and_urban_market&ei=TcF_VKKLCI6wuATYyoDYAw&usg=AFQjCNFehOm0ws-19Dg1uDAKzx31IYirig&bvm=bv.80642063,d.c2Ehttps://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDIQFjAD&url=http://www.answers.com/Q/What_is_the_Difference_between_rural_and_urban_market&ei=TcF_VKKLCI6wuATYyoDYAw&usg=AFQjCNFehOm0ws-19Dg1uDAKzx31IYirig&bvm=bv.80642063,d.c2Ehttps://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDIQFjAD&url=http://www.answers.com/Q/What_is_the_Difference_between_rural_and_urban_market&ei=TcF_VKKLCI6wuATYyoDYAw&usg=AFQjCNFehOm0ws-19Dg1uDAKzx31IYirig&bvm=bv.80642063,d.c2Ehttp://books.google.co.in/books?id=-ayIya-QXRQC&pg=PA176&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCcQ6AEwAghttp://books.google.co.in/books?id=HsS3DKe0eBAC&pg=PA2&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CBsQ6AEwAAhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://www.ccsenet.org/journal/index.php/ijms/article/view/23573http://www.ccsenet.org/journal/index.php/ijms/article/view/23573http://censusindia.gov.in/Data_Products/Library/Indian_perceptive_link/Census_Terms_link/censusterms.htmlhttp://www.ccsenet.org/journal/index.php/ijms/article/view/23573http://www.ccsenet.org/journal/index.php/ijms/article/view/23573http://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0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19/20

Rural Marketing: Its Potential, Importance, Problems and

Distribution Strategy Marketing to rural India | Business Standard News.

Rural Marketing - Balram Dogra - Google Books

ZIBEMR VOLUME - 04 ISSUE - 06 (JUNE,2014)

Zenith Research Rural Marketing 2ndedition by Pradeep Kasyap ,page no. 21 table No.2.7

A Textbook on Rural Consumer Behaviour in India - A Study ofFMCGs - Dr. A Sarangapani - Google Books

Marketing Management: Text and Cases Indian Context - Tapan K.Panda - Google Books
http://www.yourarticlelibrary.com/marketing/rural-marketing/rural-marketing-its-potential-importance-problems-and-distribution-strategy/29892/http://www.yourarticlelibrary.com/marketing/rural-marketing/rural-marketing-its-potential-importance-problems-and-distribution-strategy/29892/http://www.business-standard.com/article/management/marketing-to-rural-india-113070700506_1.htmlhttp://books.google.co.in/books?id=HsS3DKe0eBAC&pg=PA12&lpg=PA12&dq=income+percentage++of+rural+marketing+in+national+income+of+india&source=bl&ots=BNcuoqb7EX&sig=j9-NuHlrVX588gA_Y9kOFB886Qk&hl=en&sa=X&ei=lGmAVJC4BY6JuwSl94CgBQ&ved=0CCsQ6AEwAghttp://www.zenithresearch.org.in/past-issue-zibemr/193-zibemr-volume-04-issue-06-june2014.htmlhttp://www.zenithresearch.org.in/http://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=ZG9jm1V_6MMC&pg=PA723&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CCEQ6AEwAQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg=PA9&dq=difference+between+rural+marketing+and+urban+marketing+in+india&hl=en&sa=X&ei=xsN_VOKNGMvjuQTZpoDYAg&ved=0CEwQ6AEwCQhttp://books.google.co.in/books?id=mh2rxi_d2U4C&pg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