Getting The Rural Fever On High
The concept of Rural Marketing in India Economy has played an influential role in the lives of people. The rural market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioral factors operating in the country. Rural marketing determines the carrying out of business activities bringing in the flow of goods from urban sectors to the rural regions of the country as well as the marketing of various products manufactured by the non-agricultural workers from rural to urban areas. The rural market in India is vast, scattered and offers a plenty of opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby, the maximum number of consumers. The marketer has to strengthen the distribution and pricing strategies. 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 two important challenges faced by the companies while entering rural markets. They are
1. Pricing Strategies
2. Distribution channels
The two companies had followed Hub and Spoke distribution model which is proved effective in rural marketing.
Pricing should be sensitive to consumers and should be in accordance with the packing.
Educate by creating awareness in the rural population about various products and creating opportunities to them.
The process followed is a mutual benefit to the company and people involved. These methods help in cost reduction to the companies where as to people it is a great opportunity to run their own business in the case of HLL's Shakti project.
At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.
The study of Rural Market found that:
Rural purchasing power has grown faster than urban in the last six quarters
Faster growth in rural is not limited to penetration; today the rural consumer’s frequency of consumption is growing faster as well, demonstrating their entrenchment in these categories
Instant noodle sales are growing nearly twice as fast in rural India compared to urban in both penetration and frequency
Seemingly ‘urbane’ brands in categories like deodorant and fabric softener are growing much faster in rural India than urban
One way to increase the power of rural jurisdictions in the recycling marketplace is to join together to form marketing cooperatives.
In 1999, the Board, contracted with Del Norte County to develop and implement a model project with neighboring Humboldt County to develop markets and infrastructure for waste reduction and recycling by establishing long-term cooperative programs among the two counties, as well as their respective groups of recycling collectors, processors, end-users, purchasing agents, and others. The Board intended the plan to be a model for other rural jurisdictions. Rural products of India are unique, innovative and have good utility and values. Large number of these rural products sustains a significant segment of the population in the rural areas. Several attributes of rural products can be identified, for which, it has a demand in the market. Out of the lots, ‘ethnic origin’ and ‘indigenous design & appearance’ are two traits of rural products, attracting a premium in the market. But, contrary to this, the non-uniformity of rural products and lack of its quality control measures has been creating a negative demand. Besides, the small sized and dispersed production units of these rural products hinder realization of the economies of scale in marketing and result in high transaction costs per unit of output. Niche-based products have no local market. In late 2001, HLL launched another project called `Project Shakti' in the stateof Andhra Pradesh for a period of six months. Project Shakti sought to create a sustainable partnership between HLL and its low income rural consumers by providing them access to micro-credit; an opportunity to direct that credit into investment opportunities as company distributors; and reward for growth and enterprise through shared profits. During 2001, the `rural cell' within HLL worked closely with selfhelp groups, NGOs and governmental bodies in Andhra Pradesh to put in place a comprehensive experiment in training these selfhelp groups. At the end of six months of implementation (March 2002), HLL claimed to have achieved a 20% increase in consumption in the areas where it was carried out. This was a favorable development for the company, coming at a time of an overall economic slowdown. Having been successful in this initiative, HLL decided to expand this project to other states like Gujarat, Maharashtra and MP. The project at Gujarat was to be carried out in early-2002. HLL also planned to work with a group of NGOs to implement the project in the states of Maharashtra and MP in 2002-03.
The concept of Rural Marketing in India Economy has played an influential role in the lives of people. The rural market in India is not a separate entity in itself and it is highly influenced by the sociological and behavioral factors operating in the country. Rural marketing determines the carrying out of business activities bringing in the flow of goods from urban sectors to the rural regions of the country as well as the marketing of various products manufactured by the non-agricultural workers from rural to urban areas. The rural market in India is vast, scattered and offers a plenty of opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby, the maximum number of consumers. The marketer has to strengthen the distribution and pricing strategies. 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 two important challenges faced by the companies while entering rural markets. They are
1. Pricing Strategies
2. Distribution channels
The two companies had followed Hub and Spoke distribution model which is proved effective in rural marketing.
Pricing should be sensitive to consumers and should be in accordance with the packing.
Educate by creating awareness in the rural population about various products and creating opportunities to them.
The process followed is a mutual benefit to the company and people involved. These methods help in cost reduction to the companies where as to people it is a great opportunity to run their own business in the case of HLL's Shakti project.
At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.
The study of Rural Market found that:
Rural purchasing power has grown faster than urban in the last six quarters
Faster growth in rural is not limited to penetration; today the rural consumer’s frequency of consumption is growing faster as well, demonstrating their entrenchment in these categories
Instant noodle sales are growing nearly twice as fast in rural India compared to urban in both penetration and frequency
Seemingly ‘urbane’ brands in categories like deodorant and fabric softener are growing much faster in rural India than urban
One way to increase the power of rural jurisdictions in the recycling marketplace is to join together to form marketing cooperatives.
In 1999, the Board, contracted with Del Norte County to develop and implement a model project with neighboring Humboldt County to develop markets and infrastructure for waste reduction and recycling by establishing long-term cooperative programs among the two counties, as well as their respective groups of recycling collectors, processors, end-users, purchasing agents, and others. The Board intended the plan to be a model for other rural jurisdictions. Rural products of India are unique, innovative and have good utility and values. Large number of these rural products sustains a significant segment of the population in the rural areas. Several attributes of rural products can be identified, for which, it has a demand in the market. Out of the lots, ‘ethnic origin’ and ‘indigenous design & appearance’ are two traits of rural products, attracting a premium in the market. But, contrary to this, the non-uniformity of rural products and lack of its quality control measures has been creating a negative demand. Besides, the small sized and dispersed production units of these rural products hinder realization of the economies of scale in marketing and result in high transaction costs per unit of output. Niche-based products have no local market. In late 2001, HLL launched another project called `Project Shakti' in the stateof Andhra Pradesh for a period of six months. Project Shakti sought to create a sustainable partnership between HLL and its low income rural consumers by providing them access to micro-credit; an opportunity to direct that credit into investment opportunities as company distributors; and reward for growth and enterprise through shared profits. During 2001, the `rural cell' within HLL worked closely with selfhelp groups, NGOs and governmental bodies in Andhra Pradesh to put in place a comprehensive experiment in training these selfhelp groups. At the end of six months of implementation (March 2002), HLL claimed to have achieved a 20% increase in consumption in the areas where it was carried out. This was a favorable development for the company, coming at a time of an overall economic slowdown. Having been successful in this initiative, HLL decided to expand this project to other states like Gujarat, Maharashtra and MP. The project at Gujarat was to be carried out in early-2002. HLL also planned to work with a group of NGOs to implement the project in the states of Maharashtra and MP in 2002-03.